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THE 


ELEMENTS 


MERCANTILE    LAW. 


THEOPHILUS  PARSONS,  LL.  D., 

DANE   PROFESSOR   OF   LAW   IN   HARVARD   UNIVERSITY,   AT    CAMBRIDGE. 


BOSTON: 
LITTLE,   BROWN  AND   COMPANY. 


M.DCCC.LVI. 


r 


Entered  according  to  Act  of  Congress,  in  the  year  1856,  by 

TiiEoniiLDS  Parsons, 

In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


RIVERSIDE,    CAMBRIDGE: 
PRINTED   BT   H.   O.   HOUGHTON   AND    COMPANY. 


TO   MY    COLLEAGUE, 

HON.  JOEL  PARKER,  LL.  D., 

KOTALL  PROFESSOR   OF   LAW    IX    HARVARD    UNIVERSITY, 

AND   FORMERLY 

CHIEF    JUSTICE    OF    THE    SUPERIOR    COURT    OF    NEW    HAMPSHIRE, 

I    DEDICATE    THIS    VOLUME, 

IN  ACKNOWLEDGMENT  OF  THE   URBANITY   AND   DEVOTION   TO   DUTY  WIIICII  HAVE   MADE 
OUK   COMMON   SERVICE   VERY  AGREEABLE   TO   ME;  AND  IN  TESTIMONY  THAT  THE 
LEARNING  AND   WISDOM   THAT   ILLUSTRATED   THE   HIGH   JUDICIAL  OFFICE 
FROM  WHICH  HE   CAME   HERE,  HAVE   MADE  HIM  MOST  USEFUL  AND 
MOST  ACCEPTABLE   TO   ALL  WHO   ARE  OR  HAVE   BEEN   IN  ANY 
WAY    CONNECTED    WITH    THE    SCHOOL,   AND    HAVE   IN- 
SPIRED  AN    EARNEST    HOPE   THAT    HIS    CONNEC- 
TION WITH   IT  MAY  LONG   CONTINUE. 

THEOPHILUS  PARSONS. 

Cambridge,  July,  1856. 


urs^^g 


PREFACE. 


The  title  of  this  work  indicates  its  purpose  and  character ; 
but  as  they  are  in  some  respects  peculiar,  a  few  remarks 
respecting  them  may  make  the  volume  more  useful. 

When  I  accepted,  seven  years  ago,  the  office  of  Dane  Pro- 
fessor in  the  Law  School  of  Harvard  University,  it  was  my  ex- 
pectation that  my  official  duties  would  leave  me  some  leisure 
which  I  could  usefully  employ  in  making  a  series  of  text- 
books on  Commercial  Law.  I  had  for  many  years  been  much 
employed  in  examining  questions  belonging  to  that  depart- 
ment of  the  law,  and  had  formed  the  opinion  that  text-books 
might  be  made  better  suited  to  the  wants  of  the  profession 
than  those  we  had.  Their  general  merit,  and  the  high  ex- 
cellence of  some  of  them  I  knew ;  but  it  seemed  to  me  that 
they  had  faults  which  might  be  avoided,  and  deficiencies 
which  might  be  supplied.  The  necessary  basis  for  such  a 
series  was  a  work  on  the  Law  of  Contracts  generally.  This 
I  have  made  ;  and  I  may  perhaps  be  permitted  to  say,  that 
the  reception  it  has  met  with,  while  it  does  not  blind  me  to 
its  deficiencies,  encourages  me  to  believe  that  further  labors 
of  the  same  character  would  not  be  useless  or  unacceptable 
to  my  professional  brethren.  And  it  is  my  purpose  and 
hope  to  execute  fully  my  original  plan.  But  the  remarks 
that  have  reached  me  in  relation  to  that  work  from  various 
quarters,  and  some  other  circumstances,  have  suggested  to 
me,  or  rather  confirmed  me  in,  an  opinion  that  has  led  me  to 
turn  aside  somewhat  from  my  first  design,  and  prepare  this 


VI  PREFACE. 

volume.  I  can  hardly  say  indeed  whether  my  own  expe- 
rience suggested  the  idea  of  the  present  work,  or  only  con- 
firmed and  illustrated  that  which  was  presented  by  others. 
I  am  certain,  however,  unless  my  experience  differs  altogether 
from  that  of  others,  that  it  would  be  a  great  convenience  for 
any  lawyer  to  have  at  his  elbow,  or  to  carry  with  him  on  a 
circuit,  a  single  volume  which  would  at  once  refresh,  or  con- 
firm, or  correct  his  recollection,  or  otherwise  supply  the  want 
of  the  moment  in  telling  him  simply  and  concisely  whatever 
the  law  has  settled  upon  the  exact  question  before  him,  or 
the  question  that  comes  nearest  to  it.  Such  a  book  would 
deserve  the  old  name  of  "  The  Lawyer's  Manual,"  or  "  The 
Attorney's  Yade  Mecum."  The  books  which  formerly  bore 
these  names  were  useful  in  their  day.  But  that  was  a  day 
in  which  it  was  not  thought  well  that  learning  and  labor 
should  embody  themselves  in  any  other  works  than  those 
of  appropriate  magnitude  and  dignity.  This  volume,  how- 
ever, contains  the  results  of  whatever  learning  I  have  been 
able  to  acquire  from  books  or  practice;  and  of  my  own 
earnest  and  continued  endeavors,  as  well  as  a  large  amount 
of  skilled  labor,  which  many  young  friends,  new  to  the  pro- 
fession, but  bringing  to  it  clear,  vigorous  and  well-trained 
minds  and  enthusiastic  industry,  have  permitted  me  to  buy 
of  them.  My  general  purpose  may  be  stated  thus :  I 
wished  to  make  a  full,  condensed,  and  accurate  epitome 
of  Commercial  Law. 

As  to  the  execution  of  the  work,  I  know  that  it  has  many 
faults ;  and  there  may  be  many  more  than  I  am  aware  of,  and 
some  of  these  may  be  important.  But  I  also  know  that  it  is 
just  as  good  as  I  am  able  to  make  it,  with  the  very  valuable 
assistance  I  have  been  able  to  procure.  I  venture  to  hope 
that  it  will  be  found  that  very  few  principles  which  can  be 
gathered  from  authority,  are  omitted  in  the  text ;  and  that 
the  leading  cases  are  so  carefully  selected,  and  grouped,  and 
accurately  cited  in  the  notes,  that  the  lawyer  who  consults 


PREFACE.  VU 

it  on  any  point,  will  find  prepared  for  him  a  brief  which  will 
enable  him  to  pursue  his  investigations  to  any  extent. 
•  To  the  wants  of  the  student,  also,  such  a  book  should  be 
exactly  adapted.  All  Avho  teach  the  law  as  a  profession 
soon  become  aware,  that  the  student  should  acquire  a  gen- 
eral and  comprehensive  view  of  the  whole  system  of  law, 
before  he  enters  upon  the  special  study  of  any  of  its  parts. 
For  that  purpose  we  now  use  the  Commentaries  of  Blackstone 
and  of  Kent ;  and  for  this  purpose  they  will  undoubtedly 
continue  to  be  used.  But  if  the  student  then  proposes  to 
enter  upon  the  study  of  mercantile  law,  I  am  very  certain 
that  he  would  be  greatly  aided  by  such  a  book  as  I  have 
above  described. 

I  have  dwelt  in  my  own  mind  on  this  ideal,  until  it.  seemed 
to  me  certain  that  such  a  book  could  be  made ;  and  that  it 
would  be  useful  if  made  tolerably  well ;  and  possible  that  I 
could  make  it,  or  at  least,  by  my  own  failure,  suggest  to 
another  how  to  succeed.  And  in  this  volume  I  have  done 
all  that  I  could  do  to  embody  this  ideal. 

It  may  be  well,  perhaps,  that  I  should  add  a  word  con- 
cerning the  order  in  which  the  topics  of  this  work  are 
arranged.  All  mercantile  business  begins  with  or  termi- 
nates in  contracts  of  some  kind,  either  express  or  implied, 
executed  or  to  be  executed.  And  as  the  first  and  most 
obvious  necessity  for  all  contracts  is  parties,  the  law  in  respect 
to  them  is  first  presented.  Then  it  is  necessary  that  the 
parties  should  meet  together  by  their  assent  to  the  same 
thing  in  the  same  sense ;  and  this  is  the  subject  of  the  second 
chapter.  Then  follows  the  further  necessity,  that  the  bargain 
should  be  founded  upon  a  proper,  a  sufficient,  and  a  legal 
cause,  or  consideration,  and  should  propose  a  legal  result ;  and 
the  rules  on  this  subject  are  presented  in  the  third  chapter. 
Every  contract  must  have  its  own  subject-matter ;  and  those 
of  the  various  contracts  usually  made  by  men  in  trade  are 
considered  in  the  subsequent  chapters  in  that  order,  so  far  as 


Viii  PREFACE. 

I  could  discover  it,  in  which  each  one  would  lead  most  natu- 
rally to  the  next,  and  facilitate  the  study  of  it. 

The  law  of  Shipping  and  the  law  of  Insurance  are  in  the 
last  chapters.  They  are  especially  distinct  from  the  other 
topics,  and  are,  as  it  seems  to  me,  more  closely  connected 
with  each  other  than  is  usually  supposed ;  for  I  believe  the 
law  of  Marine  Insurance  can  only  be  understood  as  it  is  seen 
in  its  relation  to  the  law  of  Shipping.  It  might  seem  pre- 
sumptuous to  attempt  to  give,  in  the  third  part  of  a  single 
volume,  any  useful  views  of  topics  so  extensive  as  are  Ship- 
ping and  Insurance.  But  the  large  works  which  relate  to 
them  are,  very  properly,  filled  with  cases,  and  with  elaborate 
discussions  of  unsettled  questions.  And  I  believe  the  reader 
will  find  that  I  am  justified  in  assuring  him  that  these  chap- 
ters contain  —  with  due  allowance  for  the  inevitable  failure 
in  the  execution  of  one's  own  plan  —  all  the  general  princi- 
ples contained  in  the  larger  works  on  those  subjects. 

Chapters  on  Fire  Insurance  and  on  Life  Insurance  foUow 
that  on  Marine  Insurance.  That  they  should  have  this  place 
if  any,  is  obvious,  because  all  the  principles  of  the  former 
grow  out  of  those  of  Marine  Insurance,  modified  as  the  exi- 
gencies of  the  subject-matter  require.  If  a  reason  is  asked 
for  treating  of  them  at  all  in  a  work  on  the  Elements  of 
Mercantile  Law,  perhaps  it  may  be  found  in  the  fact  that  a 
very  large  proportion  of  our  men  of  business  now  enter  into 
these  most  beneficial  contracts  for  the  preservation  of  their 
means,  the  payment  of  their  debts,  and  the  comfort  of  those 
for  whom  they  should  provide.  And  it  may  be  permitted  to 
add,  that  if,  by  placing  these  topics  in  this  work  and  in  this 
connection,  I  do  anything  towards  making  these  wise  pre- 
cautions more  universal,  this  of  itself  would  authorize  my 
believing  that  the  book  was  not  wholly  useless. 

It  will  be  noticed  that  many  of  the  topics  in  this  volume 
are  treated  of  in  my  work  on  Contracts ;  and  that  many 
similar  statements  are  made  in  relation  to  those  topics.     Of 


PREFACE.  IX 

course,  if  there  were  a  hundred  works  by  different  authors 
on  the  same  subject,  as  on  the  hiw  of  Sales,  for  example, 
there  must  be  much  matter  common  to  them  all,  because 
any  book  which  did  not  contain  it  would  be  fatally  defective. 
But  the  character  and  object  of  this  book  are  very  different 
from  that  of  the  other,  and  every  word  has  been  written  with 
an  effort  to  adapt  it  to  its  especial  object. 

I  now  offer  it  to  the  Profession,  with  every  reason  to  be- 
lieve that  they  will  receive  it  with  kindness ;  and  will  do  full 
justice  to  any  merit  it  may  possess. 

T.  p. 

Cambridge,  July,  1S56. 


CONTENTS. 


"CHAPTER     I. 

OP   THE   PARTIES    TO    MERCANTILE    CONTRACTS. 

SECTION    I.  Page 

Who  may  be  parties  to  mercantile  contracts  ....         3 

SECTION  11. 
Of  infants 4 

SECTION  III. 
Of  married  women        .         .         .         .  ■ 9 

CHAPTER    II. 

OF   AGREEMENT   AND    ASSENT. 

SECTION  I. 
Of  the  legal  meaning  of  agreement  14 

SECTION  n. 
What  is  an  assent 17 

SECTION  ni. 
Of  offers  giving  time         . 18 

SECTION  IV. 
Of  a  bargain  by  correspondence 19 

SECTION  V. 
What'  evidence  may  be  received  in  reference  to  a  written  contract  21 


Xii  CONTENTS. 

CHAPTER     III. 

OF    CONSIDERATION. 

SECTION    I.  Page 

Of  the  need  of  a  consideration 25 

SECTION  II. 
What  is  a  sufficient  consideration 27 

SECTION  III. 
Of  illegal  considerations 34 

SECTION  IV. 
Of  impossible  considerations 35 

SECTION  V. 
Of  failure  of  consideration  .......         36 

SECTION  VI. 
Of  the  rights  of  one  who  is  a  stranger  to  the  consideration  .  37 

SECTION  VII. 

Of  the  consideration  arising  from  discharging  the  debt  of  another  38 

CHAPTER    IV. 

OF  SALES  OF  PERSONAL  PROPERTY. 

SECTION  I. 
What  constitutes  a  sale 41 

SECTION  II. 
Of  the  rights  of  property  and  of  possession         ....  43 

SECTION  III.  « 

Of  delivery  and  its  incidents 50 

SECTION  IV. 
Of  contracts  void  for  illegality  or  fraud  ....  54 

SECTION  V. 
Of  sales  with  warranty 57 


CONTENTS.  xiii 


CHAPTER     V. 

Page 
OF   STOPPAGE   IN    TRANSITU         ...  60 


CHAPTER     VI. 

OF    GUARANTY      ....  Q5 

CHAPTER     VII. 

OF    THE    STATUTE    OF    FRAUDS. 

SECTION  I. 
Of  its  purpose  and  general  provisions  .....         71 

SECTION  II. 

Of  a  promise  to  pay  the  debt  of  another  ...         .         .  72 

SECTION  III. 
Of  an  agreement  not  to  be  performed  within  a  year       ...         74 

SECTION  IV. 
Of  the  acceptance  of  a  thing  sold      ......  75 

SECTION  V. 
Of  the  form  and  subject-matter  of  the  agreement  .         .         .         77 

CHAPTER     VIII. 

OF    PAYMENT. 

SECTION  I. 
How  payment  may  be  made  ......  80 

SECTION  II. 
Of  appropriation  of  payment         .......         82 

b 


xiv  CONTENTS. 

CHAPTER     IX. 

OF    NEGOTIABLE    PAPER. 


SECTION    I.  Page 


Of  the  purpose  of  and  parties  to  bills  and  notes 

SECTION  II. 


84 


"What  is  essential  to  a  bill  or  note. 

1.  That  the  promise  be  absolute  and  definite           ...  86 

2.  The  payee  must  be  designated       .         .         .         ,         .  88 

3.  Of  ambiguous  and  irregular  instruments             ...          .  89 

4.  Of  bank-notes                 90 

5.  Of  checks  on  banks           .......  90 

G.  Of  accommodation  paper       ......  93 

7.  Of  foreign  and  inland  bills         ......  93 

8.  Of  the  law  of  place 94 

SECTION  III. 
Of  the  consideration. 

1.  Of  the  exception  to  the  common-law  rule,  in  the  case  of  nego- 

tiable paper          ........  96 

2.  Of  "  value  received  "             98 

3.  What  the  consideration  may  be          .....  98 

SECTION   IV. 

Of  the  rights  and  duties  of  the  maker         .....  99 

SECTION   V. 

Of  the  rights  and  duties  of  the  holder  of  negotiable  paper. 

1.  What  a  holder  may  do  with  a  bill  or  note           .         .         .  100 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper      .         .  101 

3.  Of  presentment  for  acceptance            .....  103 

4.  Of  presentment  for  demand  of  payment          .         .         .  105 

5.  Of  protest  and  notice        .......  110 

SECTION   YI. 

Of  the  rights  and  duties  of  an  indorser       .....  120 

SECTION  VII. 

Of  the  rights  and  duties  of  an  acceptor 128 


CONTENTS.  XV 

SECTION    VIII.  Page 

Of  acceptance  for  honor  .......  131 

CHAPTER     X. 

OP    AGENCY. 

SECTION   I. 
Of  agency  in  general  ........       134 

SECTION  II. 
How  authority  may  be  given  to  an  agent 136 

SECTION  III. 
Of  the  extent  and  duration  of  authority 140 

SECTION  IV. 
Of  the  execution  of  authority        .  ......       145 

SECTION  V. 
Of  the  liability  of  an  agent 147 

SECTION  VI. 
Of  the  rights  of  action  growing  out  of  agency        ....       148 

SECTION  VII. 
How  a  principal  is  affected  by  the  acts  of  his  agent    .         .         .  152 

SECTION  vni. 

Of  the  mutual  rights  and  duties  of  principal  and  agent  .         .       154 

SECTION  IX. 
Of  factors  and  brokers     ........  158 

CHAPTER    XI. 

OF    PARTNERSHIP. 

SECTION  I. 

"What  a  partnership  is  .         .    '     .         .         .         .         .         .164 


XVI  CONTENTS. 

SECTION    II.  _  Page 

How  a  partnership  may  be  formed  .         .         .         .         .  165 

SECTION  III. 
How  a  partnersliip  may  be  dissolved  .         .         .         .         .169 

SECTION  IV. 

Of  the  property  of  the  partnersliip    .         .         .         .         .         .  172 

SECTION   V. 

Of  the  authority  of  each  partner  and  the  joint  liability  of  the  partner- 
ship      174 

SECTION  VI. 
Of  the  remedies  of  partners  against  each  other      ....       181 

SECTION  VII. 
Of  the  rights  of  the  firm  against  third  parties     ....  184 

SECTION  vm. 

Of  the  rights  of  creditors  in  respect  to  funds  ....       185 

SECTION  IX. 
Of  the  effects  of  dissolution 190 

SECTION  X. 
Of  limited  partnerships 194 

CHAPTER    XII. 

OF   THE    CARRIAGE    OF    GOODS. 

SECTION  L 
Of  a  private  carrier 196 

SECTION   II. 
Of  the  common  carrier 198 

SECTION  III. 

Of  the  obligation  of  the  common  carrier  to  receive  and  carry  goods 

or  passengers   .         .        .     ' 204 


CONTENTS.  XVll 

SECTION   IV.  .  Page 

Of  the  Hen  of  the  common  carrier         .         .         .         .         .         .212 

SECTION  V. 
Of  the  liability  of  the  common  can-ier 213 

SECTION   YI. 
Of  the  carrier  of  passengers 218 

SECTION  vn. 

Of  a  notice  by  the  carrier  respecting  his  liability        .         .         .  220 

SECTION  VIII. 

Of  the  carrier's  liability  for  goods  carried  by  passengers         .         .       225 

CHAPTER     XIII. 

OF   LIMITATIONS. 
SECTION    I. 

Of  the  statute  of  limitations  .......     230 

SECTION  n. 
Of  the  construction  of  the  statute        ......         231 

SECTION  III. 
Of  the  new  promise       .........     235 

SECTION  IV. 
Of  part-payment 238- 

SECTION  V. 
Of  the  promise  of  one  of  several  joint  debtors  ....     240 

SECTION  VI. 
To  whom  the  new  promise  should  be  made  ....         242 

SECTION  vn. 

Of  accounts  between  merchants 243 

^  SECTION  VIII. 

Of  the  other  statutory  exceptions        .        .        .        .        .        .        245 

b* 


xviii  CONTENTS. 

SECTION    IX.  Page 

When  the  period  of  limitation  begins 247 

SECTION  X. 
That  the  statute  does  not  affect  collateral  security        .        '.         .         250 

CHAP  TEE,     XIV. 

OP   INTEREST   AND    USURY. 

SECTION  I. 
What  interest  is,  and  when  it  is  due 251 

SECTION  n. 
Of  usury 253 

SECTION  m. 
Of  a  charge  for  risk  or  service 262 

SECTION  IV. 
Of  the  sale  of  notes  265 

SECTION  V. 
Of  compound  interest '.     268 

CHAPTER    XV. 

OF   BANKRUPTCT   AND    INSOLVENCY. 

SECTION  I. 

Of  the  history  of  the  law  of  bankruptcy       .        .         .         .         .         270 

SECTION  II. 
Of  the  difference  between  bankruptcy  and  insolvency      .         .         .     273 

SECTION  ni. 
Of  the  tribunal  and  jurisdiction 278 

SECTION  IV. 
"Who  may  be  insolvents 283 


CONTENTS.  XIX 

.     SECTION  V.                           ■  Pago 

Of  the  proof  of  debts 287 

SECTION  VI. 
Of  creditors  with  security 294 

SECTION  VII. 
Of  the  assignee 296 

SECTION  VIIL 
What  property  the  assignee  takes 302 

SECTION  IX. 
Of  the  discharge  of  the  insolvent 307 

SECTION  X. 
Of  foreign  bankruptcy  or  insolvency 309 


CHAPTER     XVI. 

OF   THE   LAW   OF   PLACE. 

SECTION  I. 
What  is  embraced  within  the  law  of  place  ....         317 

SECTION  II. 
Of  the  general  principles  of  the  law  of  place  .         .         .'        .     317 

SECTION  III. 
Of  its  effect  upon  the  capacity  of  persons  to  contract    .         .         .         319 

SECTION  IV. 
Of  the  place  of  the  contract 320 

SECTION  V. 
Of  domicile 323 


XX  CONTENTS. 

CHAPTER     XVII. 

OF    THE    LAW    OF    SHIPriNG. 

SECTION    I.  Page 

Of  the  ownership  and  transfer  of  ships  .....     325 

SECTION  n. 

Of  tlie  transfer  of  property  in  a  ship  .....         328 

SECTION  m. 
Of  j)art-owners      ..........     334 

SECTION  IV. 
Of  the  liabilities  of  mortgagees  ....         .         .         338 

SECTION  V. 
Of  the  contract  of  bottomry  .......     339 

SECTION  VI. 
Of  the  employment  of  a  shi])  by  the  owner  ....         343 

SECTION  vn. 

Of  charter-parties 357 

SECTION  vin. 

Of  general  average    .         .         .         .         .         .         .         .         .         367 

SECTION  IX. 
Of  the  navigation  of  the  ship 375 

SECTION  X. 

Of  the  seamen  .         .         .         .         .         ...         .         .         385 

SECTION  XI. 
Ofpilots 398 

SECTION  XII. 
Of  material  men        .........         400 


CONTENTS.  XXI 


CHAPTER     XVIII. 

OF    MARINE    INSURANCE. 

SECTION  I.  rage 

How  the  contract  of  insurance  is  made   ......     403 

SECTION  II. 
Of  the  interest  of  the  insured      .         .         .         .         .         .         .  .      408 

SECTION  III. 
Of  the  interest  which  may  be  insured      .         .         .         .         .         .412 

SECTION  IV. 
Of  prior  insurance     .........         419 

SECTION  V. 
Of  double  insurance  and  reinsurance       ......     420 

SECTION  VI. 

Of  the  memorandum  .         .         .         .         .         .         .         .         421 

SECTION  VII. 
Of  warranties 422 

SECTION  VIII. 
Of  implied  warranties •         .'       .         424 

SECTION  IX. 
Of  representation  and  concealment  ......     429 

SECTION  X. 

What  things  should  be  communicated  .....         432 

SECTION  XI. 
Of  the  premium    ..........     435 

SECTION   XII. 
Of  the  description  of  the  property  insured  ....         437 

^  SECTION  XIII. 

Of  the  perils  covered  by  the  policy        ......     440 


xxii  CONTEXTS. 


SECTION    XIV.  Page 

Of  perils  of  the  sea 443 

SECTION  XV. 

Of  collision  .         .         .         .    ^ 445 

SECTION  XVI. 
Offu-e 446 

SECTION  XVII. 
■  Of  piracy,  robbery,  or  theft   ......••     447 

SECTION  XVIII. 
Of  barratry 448 

SECTION  XIX. 
Of  capture,  arrest,  and  detention    .......     450 

SECTION  XX. 
Of  the  general  clause  ........         4ol 

SECTION  XXI. 
Of  prohibited  trade 452 

SECTION  XXIL 
Of  deviation 454 

SECTION  XXIII. 

Of  the  termini  of  the  voyage,  and  of  the  risk  ....     458 

SECTION  XXIV. 

Of  total  loss  and  abandonment  ......  4G2 

1.  Of  the  necessity  of  abandonment         .....  4G4 

2.  Of  the  right  of  abandonment  .....  4G5 

3.  Of  the  exercise  of  the  right  of  abandonment         .         .         .  4G8 

SECTION  XXV. 
Of  revocation  of  abandonment  ......         476 

SECTION  XXVI. 
Of  general  average        .........     477 

SECTION  XXVII.                               9 
Of  partial  loss 484 


CONTENTS.  XX 11 1 

SECTION    XXVIII.  Page 

Of  adjustment       . 486 

CHAPTER     XIX. 

THE    LAW    OF    FIRE    INSUltANCE, 

SECTION  I. 

Of  the  usual  subject  and  form  of  this  insurance  .         .         .         488 

SECTION  11. 

Of  the  construction  of  policies  against  fire       .....     494: 

« 

SECTION  III. 
Of  the  interest  of  the  insured 507 

SECTION  IV. 
Of  reinsurance       ..........     514 

SECTION   V. 
Of  double  insurance  .         .         .         .         .         .         .         .         516 

SECTION  YI. 
Of  warranty  and  representation     .  .         .  .         .         .       • .     519 

SECTION  VII. 
Of  the  risk  incurred  by  the  insurers    .         .  .         .     -    .         .  526 

SECTION   VIII. 
Of  valuation 529 

SECTION  IX. 
Of  alienation 530 

SECTION  X.  * 

Of  notice  and  proof .         .         .     535 

SECTION   XL 
Of  adjustment  and  loss        ........         537 


XXIV  CONTENTS. 

CHAPTER     XX. 

LIFE    INSUUANCE. 

SECTION    I.  Page 

Of  the  purpose  and  method  of  life  insurance 540 

SECTION  II. 
Of  the  premium  .........         541 

SECTION  III. 
Of  the  restrictions  and  exceptions  in  life  policies      ....     542 

SECTION  IV. 
Of  the  interest  of  the  insured 548 

SECTION  V. 

Of  the  assignment  of  a  life  policy    .......     553 

SECTION   VI. 
Of  warranty,  representation,  and  concealment       ....         555 

SECTION   VII. 

Insurance  against  disease  and  against  dishonesty  of  servants     .         .     561 


INDEX  TO  CASES  CITED. 


Abbey  v.  Chase 
Abbot  V.  Smith 

Page 

145,  148 

166 

Abbott  V.  Broome 

470 

V.  Burbagc 

281 

V.  Draper 
V.  Hendricks 

72 

98 

V.  Hermon 

29 

V.  Hicks 

291,  292 

V.  Ins.  Co. 

533 

V.  Keith 

238 

V.  Sebor 

476 

Abel  V.  Sutton 

191 

Abcll  V.  "Warren 

7 

Abington  v.  North  Bridgewater 
Aborn  v.  Bosworth 

324 

106 

Abrahams  v.  Bunn 

256 

Acebal  v.  Levy 

50,  76 

Accy  V.  Fernic 

546 

Acheson  v.  Fountain 

120 

Ackerman  r.  Emott 

158 

Ackland  v.  Pearce 

257 

Ackley  v.  Kellogg 
A'Court  V.  Cross 

203,217 
234 

Adam,  ex  parte 
V.  Ken- 

285 
322 

Adams  V.  Bankhart 

176 

V.  Claxton 

298 

V.  Hill 

30 

V.  Jones 

67,  85 

V.  Lindsell 

19 

V.  Malkin 

284 

V.  New  Orleans  Steam-Tow- 
Boat  Co.  203 
?7.  Penn.  Ins.  Co.                418,419 
V.  Eockingham  Mat.  Fire  Ins. 

Co.  533 

1-.  The  Sophia  389,  390 

V.  Warren  Ins.  Co.  439 

Adamson  v.  .Jarvis  155 

Addis  V.  Baker  332 

Addison  v.  Sandassequi    149, 162,  163, 436 

V.  Ky.  and  Louis.  Ins.  Co.      512 

iEtna  Ins.  Co.  v.  Tyler  510,  518,  533 

Aflalo  V.  Fourdrinier  292 


Agnew  V.  Bank  of  Gettysburg 

V.  Piatt 
Agrew  V.  Pratt 
Agricultural  Bank  v.  BisscU 
Aiken  v.  Benton 


Page 
115 
315 
316 
255 
232 

Albany  Dutch  Church  v.  Bradford  30 
Albany  Exchange  Bank  v.  Johnson  287 
Alcock  V.  Taylor  169 

Alder  v.  Fouracre  184 

Alderson  v.  Pope  178 

Aldrich  v.  Grimes  6 

V.  Reynolds  258 

V.  The  Equitable  Safety  Ins. 

Co.  405 

V.  Wallace  189 

Aldridge  v.  Bell  470 

V.  Great  Western  Railway 

Co.  228 

Alexander  v.  Alexander  145 

V.  Bank  of  Rutland  146 

V.  Barker  184 

V.  Burnet  246,  247 

ex  parte  299 

V.  Gardner  48' 

V.  Gibson  141,  142 

V.  Greene  202 

V.  Heriot  6 

V.  Hutcheson  5 

V.  Southey  150 

Alfridson  v.  Ladd  395 

Alger  V.  Scoville  74 

Allaire  v.  Ouland  155 

Allan  V.  Gripper  62 

Allegre  v.  Maryland  Ins.  Co.  439 

Allen  V.  Center  Valley  Co.     185,  186, 187 

u.  Comm.  Ins.  Co.  465,466,467,468 

In  re  296 

V.  Merchants'  Bank  144 

V.  Mut.  F.  Ins.  Co.  502,  504,  506,  508 

V.  Sewall  216 

V.  Suydam  144 

V.  The  Sea,  &c.  Ins.  Co.  86 

V.  Wells  ■    171,  188 

Alliance  Mar.  Ins.  Co.  v.  La.  St.  Ins. 

Co.  ,  493,514 


XXVI 


INDEX  TO   CASES   CITED. 


I'apo 

Alsagcr  v.  St.  Katharine's  Dock  Co.   497 

Alsop  V.  Coit  434 

V.  Coram.  Ins.  Co.     409,  410,  4.33, 

434 

V.  Matlier  192 

Alston  V.  Mcclianics'  Mut.  Ins.  Co.      .'JlS 

V.  State  Bank  239 

Alvcs  V.  Hodgson  318 

Amery  v.  Kodgers  435 

Amies  v.  Stevens  215 

Am.  Ins.  Co.  v.  Bryan  447 

V.  Center  380,466,474,475 

V.  Coster  380,  474 

V.  Francia  464,  466 

V.  Griswold  420,  486 

r.  Ogden  377,423,425, 

426,  428,  466,  467 

Amory  v.  Jones  467 

V.  Gilman  409 

V.  Hamilton  138 

'v.  M'Gregor  356 

Amos  V.  Temperley  353 

Ancher  r.  The  Bank  of  England   101,  122 

Ancrum  v.  Slone  252 

Anderson  i;.  Coonley  135,136,141 

V.  Drake  104 

V.  Edie  549 

V.  Fitzgerald  558,  566 

V.  Hayman  73 

V.  Levan  167 

V.  Thornton  435 

V.  Tompkins  175,  177 

V.  Weston  88 

Andover  r.  Grafton  146,155 

Andre  v.  Fletclier  437 

Andrews  v.  Essex  Fire  and  Mar.  Ins. 

Co.  406,  452,  492 

V.  Essex  Mar.  Ins.  Co.  442 

i\  Franklin  86 

V.  Heriot  322 

V.  His  Creditors  318 

•  V.  Knceland  58,  142,  145 

V.  Mellish  457 

V.  Pond  95,  203,  255,  259. 

260,  318,  321 

V.  Schott  166 

Angerstein  v.  Bell  462 

Anonymous  345 

Antram  v.  Chace  33 

Appleby  V.  Dods  388 

Ajipleton  V.  Binks  70,  147 

Arbonin  v.  Anderson  151 

Archer  i\  Hale  67 

V.  Putnam  259 

Archibald  v.  Mercantile  Ins.  Co.  409,  452 

Arden  v.  Sharpe  180 

Arey  v.  Stephenson  236 

Argall  V.  Bryant  248 

Armani  v.  Castriqne  93,  315 

Armroyd  v.  The  Union  Ins.  Co.   334,  351 

Armstrong  v.  Robinson  176 

V.  Smith  157 

r.  Toler  .  34 


Paffe 

Arnold  v.  Brown  174,  295 

V.  Downing  239 

V.  Ilaincr  187 

V.  Maynard  281,  283 

Arnott  V.  Hughes  57 

V.  Rcdfern  252 

Arrott  z'.  Brown  144 

Arthur  v.  Barton  379 

V.  Schooner  Cassius  360 

Ash  V.  Putnam  64 

Ashburner  v.  Balchen  357 

Ashby  V.  James  240 

Ashley  v.  Ashley  5.53 

Ashly  V.  Pratt  456,  457 

Associated  Firemen's  Ins.Co.i'.Assum  517 

Astley  V.  Reynolds  81 

Aston  V.  Heaven  218 

Astor  V.  Price  260 

V.  Union  Ins.  Co.  431 

V.  Wells  149 

Atk,  ex  parte,  284 

Atkin  V.  Barwick  42,  64 

Atkins  V.  Burrows  395 

V.  The  Boylston  Fire  and  Mar. 

Ins.  Co.  437 

V.  Tredgold  241 

Atkinson  v.  Bayntun  27 

V.  Bell  48,  3.33 

V.  Brindall  281 

V.  Jordan                  •  277 

V.  Maling  331 

V.  Monks  87 

Atkyns  v.  Amber  139,  161 

Atlantic  Ins.  Co.  v.  Storrow  414,  443 

Atlee  V.  Backhouse  28 

Attorney-General  V.  Ansted  152 

V.  Korstedt  333 

V.  Riddle  136 

V.  Liddon  154 

Attwood  t;.  Banks  193 

V.  Griffin  89 

V.  Mannings  143,  146,  155 

Atty  V.  Parish  362 

Atwater  v.  Townsend  323 

Atwood  V.  Cobb  23,  197 

V.  Crowdie  102 

V.  Partridge  291 

Aubert  v.  Walsh  437 

Augustus  V.  Zarega  314 

Auriol  V.  Thomas  263 

Austin  V.  Bostwick  241 

V.  Burns  87 

V.  Drewe  526 

V.  The  M.  S.  &  L.  Railway       225 

V.  Vandermark  .    176 

Averill  v.  Hedge  19 

V.  Loucks  174 

Avery  v.  Halsey  155 

V.  Stewart  107 

Aveson  v.  Kiuniard  556 

Awde  V.  Dixon  126 

Ayer  v.  Brastow  305 

V.  Hawkins  239 


INDEX   TO    CASES   CITED. 


XXVll 


Page 

Page 

A3'er  v.  Iliitchins 

102 

Bank  of  Ireland  v.  Beresford 

291 

Avers  V.  liewctt 

16 

Kentucky  v.  Garly 

111 

Aymar  v.  Astor 

444 

V.  Pursley 

111 

V.  Beers 

103 

_  V.  Schuyll 

ill  Bank  140 

Ayrcy  v.  Fearnsides 

87 

Metropolis  v.  Jones 

140 

Ayton  V.  Bolt 

234 

236 

,  237 

Mobile  V.  King 
Monroe  v.  Strong 

142 

.      258 

B. 

Pittsburgh  v.  Whitehead 

150 

R.  V.  Monteath 

177 

Babb  V.  Clemson 

52 

# 

St.  Albans  v.  Scott 

255 

Babcock  v.  Bryant 

70 

St.  Marvs  v.  IMumford 

150 

V.  JMay 

347 

U.  S.  y.  Davis    144, 

146 

,150,152 

V.  Montgomery  Co. 

Mut.  Ins. 

V.  Donally  95 

318 

,322,323 

Co. 

491 

526 

,527 

V.  Dunn 

140 

V.  Weston 

316 

V.  Owens 

555,  259 

Backhouse  v.  Snecd 

214 

V.  Wagener 

259 

Backhurst  r.  Clinkard 

189 

Utica  V.  Phillips 

264 

Backus  V.  Shipherd 

118 

V.  Smedes 

107 

Bacon  v.  Dyer 

109  < 

i 

V.  Wagar 

255,  264 

e.r  parte 

302 

Vergenncs  v.  Cameron 

105 

V.  Searles 

127 

Banoi'gee  v.  Hovey 

138 

Badger  v.  Bank  of  Cumberland 

329 

Barber 

V.  Barber 

244 

V.  Phinney 

8 

V.  Brace 

480 

Badlam  v.  Tucker 

331 

332 

V.  Butcher 

553 

Bage,  ex  parte 

299 

V.  Fletcher 

432 

Baglehole  v.  "Walters 

56 

V.  Gingell 

137 

Bailey  v.  Adams 

69 

V.  Morris 

551 

i\  Bamberger 

8 

V.  Taylor         • 

51 

V.  Bid  well 

97 

Barclay  v.  Bailey 

107,  108 

.    V.  Clark 

166 

168 

v.  Cousins 

410 

V.  rrecman 

26 

ex  parte 

116 

V.  Porter 

109 

V.  Lucas 

60,  185 

V.  Quint 

2 

V.  Stirling 

439 

V.  Steamboat  Concordia 

402 

Bardwell  v.  Lydall 

65 

Bainbridge  v.  Neilson  469,471 

,476,477.550 

V.  Perry 

188 

V.  Wade 

66 

Baring 

V.  Corrie 

139 

148,  161 

Baker  v.  Barney 

285 

Bark  Delaware  v.  Steamer  Osprey       384 

V.  Ludlow 

498 

Barker 

V.  Blake 

194 

V.  Walker 

98 

V.  Blakes 

470 

V.  Wheaton 

316 

V.  Burgess 

180 

V.  Whiting 

157 

V.  Cheriot 

361 

Balcora  v.  Richards 

241 

V.  Greenwood 

153 

Baldey  v.  Parker 

53,  76 

V.  Havens 

352 

Balfe  V.  West 

156 

158 

V.  Hodgson 

364, 366 

Ball  V.  Dunsterville 

177 

V.  Phoinix  Ins.  Co. 

372,  422, 

Ballantinc  v.  Golding 

315 

423, 

478,  482 

Ballard  v.  Merch.  Ins.  Co. 

437 

V.  Vansommer 

259 

V.  Oddey 

256 

Barklie 

V.  Scott 

178 

Bailey  v.  De  Arroyave 

362 

Barksdale  v.  Brown 

141 

Ballinger  v.  Edwards 

267 

Barlow 

V.  Bishop 

12,  128 

Ballou  V.  Talbot 

148 

V.  Ocean  Ins.  Co. 

27 

V.  Spenser 

164 

V.  Reno 

177 

Balmain  v.  Shore 

170 

Barnaby  v.  Rigalt 

3 

Baltimore,  &c.,R.R.Co.  v.  Woodruff 

228 

Barnar 

d  V.  Adams           368, 

373, 

478,481 

Bamford  v.  lies 

68 

V.  Bartholomew 

232, 236 

V.  Shuttlewortli 

150 

V.  Yates 

57 

Bancroft  v.  Hall 

114 

V.  Young 

261 

Bangor  v.  Warren 

82 

Barnes 

V.  Cole 

228,  383 

Bank  of  Augusta  v.  Earle 

318 

V.  Hedley 

257 

Australasia  v.  Bank  of  Aus- 

V. Perine 

33 

tralasia 

35 

V.  Worlich 

265 

Columbia  v.  Lawrence 

114 

Barney 

V.  Carrier 

178 

England  v.  Newman 

125 

V.  Smith 

190 

xxvia                            INDI 

]x  : 

CO    C. 
Page 

\SE«    UiTKJJ. 

Page 

Barns  i\  Ecynolds 

116 

Bean  v.  Stupart 

406,  422 

Barous'li  v.  White 

102 

V.  Sturtcvant 

201,  216 

Barret  v.  Duttoa 

364 

Beard  v.  Kimball 

278 

BaiTctt  V.  Allen 

107 

V.  Kirk 

134, 

140,  143 

V.  Jcrmy 
r.  Kof^crs 

502 

Beardsley  v.  Baldwin 

86 

347 

Beaston  v.  Farmers'  Bank 

of  Delaware  296 

.  V.  Union  Mut.  F.  Ins.  Co 

511 

517 

Beatson  v.  Ilaworth 

457 

Barringcr  v.  Snccd 

23 

Bcatty  V.  Marine  Ins.  Co 

491 

Barry  v.  Ncsham 

168 

Beaumont  v.  Boultbee 

158 

Bartliolemew  v.  Leech 

Ml 

V.  Bromley 

16 

Bartholomew  v.  Finncmorc 

w 

ex  parte 

299 

V.  Jackson 

^ 

V.  Meredith 

164 

Bartlet  v.  Walter 

439 

Bebee  v.  Eobert 

14 

Bartlett  v.  Pentland                14G, 

153 

161 

Beck  V.  Evans 

197 

V.  Vinor 

415 

Bcckford  ?a  Wade 

96 

V.  Williams 

263 

Beckham  v.  Drake 

145, 

149, 179 

V.  AVyman 

388 

V.  Knight 

179 

Barton  v.  Baker 

119 

Beckman  w.  Shouse  197, 

201 

223 

224  226 

V.  Tower 

286 1 

Bcckwith  V.  Baxter 

'l38 

V.  Williams 

164 

V.  Cheever 

17 

V.  Wookey 

184 

V.  Sydebotham 

430 

Bartntm  v.  Caddy 

127 

Bedell  v.  Janney 

252 

BarwcU  v.  Cawood 

170 

V.  Loomis 

27 

Bass  V.  Bass 

245 

Bedford  v.  Brutton 

300 

V.  Clive 

129 

Bedford  Com.  Ins.  Co.  v 

Parker 

369, 

V.  Smith 

231 

373, 

481,  483 

Basten  v.  Butter 

53 

Beebe  i\  Dudley 

10 

Bate  V.  Burr            • 

252 

Beech  v.  Jones 

93 

Batcman  r.  Joseph 

104 

119 

Beckman  ?•.  Wilson 

281 

Bates  v.  Coe 

273 

Bceler  v.  Young 

7 

V.  Dandy 

10 

Beeman  ?'.  Duck 

129,  130 

ex  parte 

285 

Beers  v.  Haughton 

316 

V.  Stanton 

212 

V.  Key n olds 

195 

V.  Todd 

347 

Beete  v.  Bridgood 

259 

Bath,  ex  parte 

284 

Beirne  v.  Dord 

58 

Batson  v.  Donovan 

223 

224 

Belcher  v.  Capper 

360 

Battersby  v.  Gale 

333 

V.  Lloyd 

292 

Battley  v.  Faulkner 

248 

V.  Brittle 

281 

V.  Lewis 

165 

Belchier,  ex  parte 

298,  299 

Batty  V.  Carswell 

142 

,145 

V.  Parsons 

297,  298 

V.  ]\rCundie 

166 

Belden  v.  Davie s 

26 

Baxter  v.  Daren 

149 

•Beldon  v.  Campbell 

378 

V.  Earl  of  Portsmouth 

286 

Bell  V.  Bell 

23, 

431,439 

V.  Pritchard 

281 

,  283 

V.  Beveridge 

470 

V.  Hodman 

386 

V.  Broomfield 

423 

Bay  V.  Coildington 

151 

V.  Bruen 

321 

V.  Gunn 

4 

V.  Carstairs 

432 

V.  Freazer 

89 

V.  Cunningham 

137,  156 

Bayard  v.  Mass.  F.  &  M.  Ins.  Co 

423 

V.  Frankis 

119 

Bayley  v.  Gouldsmith 

54 

?i.  Hobson 

459 

Baylies  v.  Fettyplace 

365 

,  366 

V.  Humphries 

337 

Baylis  v.  Dineley 

4,  5 

V.  Locke 

191 

Beach  v.  Hayward 

191 

V.  Mar.  Ins.  Co. 

433 

V.  Hotchkiss 

181 

V.  Morrison       180, 

230 

235 

238,  241 

V.  State  Bank 

176 

,  180 

V.  Moss 

60 

Beal  V.  Morels 

178 

V.  Newman 

185 

186.  188 

v.  M'Kiernan 

161 

V.  Nixon 

463 

Beale  v.  Nind 

232 

V.  Puller 

358 

V.  Thompson 

397 

,  590 

V.  Smith 

373 

Beals  V.  Guernsey 

232 

V.  Thompson 

276 

Bealy  v.  Grecnslade 

239 

V.  AVelch 

66 

Beau  i\  Burbank 

.25 

V.  Western  M.  &  F 

Int 

.Co 

408, 

V.  Green 

223 

,224 

414 

439 

443,  454 

INDEX   TO    CASES    CITED. 


XXIX 


Page 

Bcllairs  v.  Ebsworth  60.  185 

Bellcmirc  v.  Bank  of  U.  S.  144 

Bellows  I'.  Lovell  G9 

V.  Peck  29G 

Bclotc  r.  Wynne  180,241 

Belton,  ex  parte  288,  289 

V.  Hodges  285 

Bement  i'.  Smith  48 

Bend  v.  Hoyt  151 

Benedict  i;.  Smith  138 

Benham  v.  Bishop  5 

V.  United  G.  &  F.  Ins.  Co.      561 

Benjamin  v.  Benjamin  137 

I'.  ]\IcConnell  15 

V.  Sinclair  347 

Bennet  v.  Paine  28 

Bennett  v.  Dutton  205 

ex  parte  289,  294 

V.  Fai-nell  89 

V.  Hull  78 

V.  M'Gaughy  124 

V.  Pratt  77 

Benson  v.  Blunt  3G4 

V.  Chapman  474 

i\  Thompson  335 

Bent  V.  Manning  7 

Bcntall  V.  Burn  45,  76 

Benthall  17.  Judkins  121 

Bentinck  r.  Dorrien  131 

Benyon  v.  Nettleford  34 

Bergstrora  v.  Mills  390 

Berkley  r.  Watling  144,  347 

Berkshire  Bank  v.  Jones  109,  118 

Berthoiid  v.  Atlantic  Ins.  Co.  493 

Bescli  V.  Frolich  I7l 

Bessey  v.  Evans  364 

V.  Windliara  16 

Betterbee  v.  Davis  81 

Betts  y.  Bagley  315 

V.  Gibbins  155 

Bevan  z;.  Lewis  179 

V.  The  Bank  of  the  U.  S.  482 

Bcvaus  V.  Rees  81 

V.  Sullivan  183 

Bcveridgc  v.  Burgis  119 

Beverly  v.  The  Lincoln,  &c.,  Capo  Co.    54 

Bholen  v.  Cleveland  312 

Bickerdike  v.  Bollman  118 

Biekford  v.  Gibbs  66,  70 

Biddcl  V.  Dowse  32,  33 

Bigelow  V.  Davis  38 

V.  Denison  137 

V.  Grannis  4,  5 

V.  Heaton  2 

Biggs  V.  Lawrence  99,  184,  318 

V.  Wisking  44,  76 

Bignold  V.  Waterhouse  178 

Bilbie  v.  Lumley  539 

Bill  V.  Bament  76 

V.  Mason  462 

V.  Porter  82 

Billings  V.  Tolland  Co.  Mat.  Fire  Ins. 

•      Co.  501,  502,  506 


,  Page 

Bingham  i'.  Piogers  222,  227 

Birch,  ex  parte  284 

V.  Jervis  308 

r.  The  Earl  of  Liverpool  75 

Bird  V.  Adams  242 

V.  AjjplctOQ  416 

V.  Caritat  311 

V.  Brown  138 

V.  Gammon  236 

V.  Hamilton  166 

V.  Pierpont  311 

Blrge  V.  Gardiner  228 

Birkett  v.  Willan  223 

Birkley  v.  Presgrave  478 

Birkmyr  v.  Darnell  73 

BiselJ.  Hobbs  179 

Bishop  V.  Breckles  170,  171 

V.  Hay  ward           "  100 

V.  Shepherd  385, 386 

Bishop  of  Chester  v.  Freeland  34 

Bitzer  v.  Shunk  177 

Bixby  V.  Franklin  Ins.  Co.  329,  417 

Bize  V.  Fletcher  496 

Black  V.  Smith  81 

V.  The  Lodisiana  395 

V.  Webb  51 

Blackett  v.  Roy.  Exch.  Ass.  Co.   438,  491 

Blackhurst  v.  Cockell  422 

Blackmore,  ex  parte  285 

Blagden,  ex  parte  292 

Blaine  v.  The  Charles  Carter       339,  342, 

343 

Blair  v.  Bromley  175,  186 

V.  Drew  238,  244 

Blake  v.  Dorgan  171 

V.Williams  34,311 

Blakely  u.  Grant  113 

Blakes,  ex  parte  3 

Blanchard  v.  Bucknam  361,  389 

V.  Dyer  405 

i'.  Russel  316,318 

V.  Waite  403,  490,  492 

Blanckenhagen  v.  Blundell  89 

Bland,  ex  parte  401 

Blane  v.  Drummond  31 1 

Blaney  v.  Hendrick  232 

V.  Jackson  200 

V.  Harrison  143 

V.  Westmore  454 

Bleeker  v.  Ilvdc  66 

Blight  V.  Page  36,  364,  366,  367 

Blood  V.  Goodrich  136,  138 

Bloodgood  V.  Bruen  237,  242 

Blore  V.  Sutton  155 

Blot  V.  Boiccau  161,  162 

Bloxom  V.  Sanders  42,  63 

Bloxham,  ex  parte  291,  292 

V.  Hubbard  301 

V.  Pell  168 

Blow  V.  Russell  81 

Bluett  V.  Osborne  59 

Blunt  V.  Bestland  10 

V.  Boyd  38 


XXX 


INDEX   TO    CASES   CITED. 


•        PaEc 

BlydcnburfT  v.  Welsh  56 

Boardman  v.  Gore  166,  180 

V.  Men-imac  Mut.  Fire  Ins. 

Co.  529 

Bodcnham  v.  Bennett  223,  224 

V.  Purclias  68 

Boddington  v.  Schlenchcr    ■  91,  108 

Bodlc  V.  Chenango  Co.  Mut.  Ins.  Co.  5.34 

Boehm  v.  Gavcias  109,  131 

V.  Sterling  101 

Bogart  u.  De  Bussy  145 

Bogcrt  V.  Vermilya  241 

Boggs  V.  Tcackle  315 

Boind  V.  Dale  197 

Bold  V.  Eothcram  461 

Bolland  V.  Nash  292,  545 

Boltou  V.  Hillcrsden  137 

V.  Puller'  151 

V.  Sowerby  284,  285 

Bolton  et  al  v.  American  Ins.  Co.        399 

Bomar  v.  Maxwell  225,  226 

Bonar  v.  INIaeDonald  67 

r.  Mitchell  110 

Bond  V.  Aitkin  176 

V.  Brig  Cora           '  456 

V.  Gibson  1  SO 

V.  Nutt  424 

V.  Pittard  168 

V.  Storrs  101 

Bondrett  v.  Hentigg  448 

Bonsey  v.  Amee  333 

.Bonnaffe  v.  Fenner  182 

Boody  V.  Lunt  235 

Bool  V.  Mix  4 

Boon  V.  The  Hornet  401 

Boone  v.  Eyre  31 

Boorman  v.  Jenkins          •  58 

y.  Nash  291 

Booth  I.'.  Jackobs  119 

Borden  v.  Hingham  ^Mutual  Fire  Ins. 

Co.                                         *  530 

Bordes  v.  Hallett  469,  477 

Bordman  v.  The  Elizabeth  389 

Bork  V.  Norton  350,  365 

Boi'radaile  v.  Hunter  544 

Borthwick  v.  Carruthers  4 

Bosanquet  v.  Wray  83,  183 

Bosford  V.  Saunders  5 

Bosley  v.  Ches.  Ins.  Co.  471 

Boss  r.  Litton  227 

Boston,  &c.  K.  Co.  i'.  Bartlett  18 

Botsford  V.  Sanford  258 

Bouchellc  r.  Clary  7 

Boucher  v.  Lawson  318,  382 

Bourcier  v.  The  Schooner  Ann  401 

Boultbee  v.  Stubbs  119 

Boulton  V.  Welsh  112 

Bound  V.  Lathrop  241 

Bourdillon  v.  Dalton  2 

Bourne  v.  Mason  37 

Bousfield  v.  Barnes  410,  421 

Boutflower  v.  Wilmer  449 

Bovill  V.  Hammond  181 


Bowdon  V.  Home 

338 

V.  Vaughan 

431 

Bowdrc  V.  Hampton 

241 

Bowen  v.  Argall 

195 

V.  Burk 

4: 

J,  46 

V.  IMorris 

147 

V.  Newell 

91 

V.  The  Hope  Ins.  Co. 

424, 

461 

Bowerbank  v.  Morris 

143 

Bowers,  ex  parte 

284 

285 

Bowes  V.  Howe 

105 

Bowkcr  V.  Hoyt 

53 

Bowman  v.  Teall 

351 

V.  Hilton 

21 

Boycc  V.  Anderson 

36 

219 

V.  Edwards 

128 

322 

Boyd  V.  Brotherson 

88 

V.  Dubois 

434 

442 

V.  Emmerson 

103 

V.  Mangles 

292 

V.  Mynatt 

166 

V.  Vanderkemp 

150 

Boydell  v.  Drummond 

75 

Boyden  v.  Boyden 

6 

Boyle  V.  M'Laughlia 

208 

V.  Zacharie 

316 

Boynton  v.  Clinton  &  Essex  Mut.  Ins. 

Co.  532,  533,  534,  536 

V.  Veazie  44,  50 

Boys  V.  Prink  227 

Boyson  v.  Coles  159 

Bracegirdle  v.  Heald  75 

Bracken  v.  Miller  149,  150 

Brackett  v.  Norton          *  29 

V.  The  Hercules  390 

Bradbury  v.  Smith  189,  195 

Braden  v.  Gardner  338 

Bradfield  v.  Tupper  239 

Bradford  v.  Bush  141 

V.  Farrand  3 1 6 

V.  Ivimbcrly  183 

V.  Manly    "  58 

V.  Russell  274 

Bradhurst  v.  Col.  Ins.  Co.     350,  369,  474, 

479,  481 

Bradley  v.  Pratt  7 

V.  Richardson  159 

V.  Watcrhousc  223 

Bradlie  v.  Maryland  Ins.  Co.         466,  467 

Bradstreet  v.  Clark  246 

V.  Baldwin  347 

Brady  u.  Calhoun  164 

Bragg  V.  Anderson  .                 457 

V.  N.  E.  Mut.  Fire  Ins.  Co.        533 

Brainard  v.  Buck  .235 

V.  Burton  49 

Braithwaite  v.  Britain  192 

V.  Gardiner  129 

Bramhall  v.  Beckett  151 

Brandon  v.  Brandon  289 

V.  Wharton  241 

Brasicr  v.  Hudson  193 

Braxton  v.  Wood  237 


INDEX   TO   CASES   CITED. 


XXXI 


Bray  v.  Bates 

V.  Hiitlwen 

V.  Shi])  Atalanta 
Braynard  v.  INIarsliall 
Brcaley  v.  Andrew 


340,  341 

115 

397 

315,316,  321 

27 


Breasted  v.  The  Farmers'  Loan  &  Trust 

Co.  408,  545 

Breckenbridge's  Heirs  v.  Ormsby  4 

Brediii  v.  Duharry  138 

Breed  v.  Judd  8 

Brcnchley,  ea:/)arte  289 

Brenerman,  exparte  287 

Brenzer  v.  Wightman  85 

Brereton  v.  Chapman  362 

V.  Hall  281 

Brett  r.  Levctt  119 

Brettel  v.  Williams  77,  175 

Brewer  r.  Dyer  38 

V.  Salisbury  44 

V.  Sparrow  138 

Brewster  v.  Hammett  186,  190 

V.  Hobart  155 

V.  Kitchell  423 

Breyfogle  v.  Beckley  253 

Brichta  v.  N.  Y.  La  Fayette 

Ins.  Co.  408,  513,  531 

Bridge  v.  Grand  Junction  Railway  Co.  229 

V.  Hubbard  257,  258 

V.  Niagara  Ins.  Co.  391 

Bridges  v.  Berry  1 1 7 

V.  Hunter  430,  432 

Brig  Elizabeth  395 

Langdon  388 

Briggs  V.  Strange  332 

V.  "Wilkinson  339 

Brigham  v.  Peters  138 

Bright  V.  Cowper  344,  348 

Brind  v.  Dale  200,  226 

V.  Hampshire  85 

Brine  v.  Feathcrstone  431 

Brink  v.  Dolsen  157 

Brinlcy  v.  Mann  145 

i:  National  Ins.  Co.  539 

V.  Spring  50,  332 

Brisban  v.  Boyd  19,  160 

Bristol  V.  "Wilsmore  44 

British  Linen  Co.  v.  Dmmmond  95, 

322, 323 

Britton  v.  Turner  30 

Britten  v.  Webb  100 

Broad  v.  Thomas  162 

Brock  V.  Thompson  257,  267 

Brocklebank  v.  Sngrue  137 

Brockway  v.  Clark  257 

Bromage  v.  Lloyd  128 

Bronde  v.  Haven  389 

Bronson  v.  Kinzic  315 

V.  Newberry  316 

Brooke  v.  Gaily  5 

V.  Pickwick  223,  225 

V.  Washington  173 

Brooks  i:  Bondsey  339 

V.  Dorr  387,  390,  396 


Page 

Brooks,  exparte  288 

V.  Marbury  276 

V.  Minturn  362 

V.  Mitchell  102 

V.  Oriental  Ins.  Co.  371,  372,  410, 

466,  482,485 

Brookshire  v.  Brookshire  143 

Broom  r.  Broom  173. 

Brough  V.  Wliitmore  438 

Brouuikcr  v.  Scott  362 

Brown  v.  Arrott  141 

V.  Bellows  49 

V.  Bridge  237 

V.  Clark  172 

V.  Davies  101 

V.  Denison  203 

V.  Dowey  256 

V.  De  Winton  125 

V.  Eastern  R.  R.  Co.  223 

V.  Edgington  59 

exparte  171,284,289,292 

V.  Harrison  263 

V.  Heathcote  300 

V.  Howard  248,  360 

r.  Hunt  361 

in  re  309 

V.  Jackson  151 

V.  Johnson  '    362 

V.  Jones  386,  387 

V.  Langford  34 

V.  Leonard  167 

w.  Litton  157,191 

V.  Louard  171 

V.  Lull  387,  388,  389,  391 

V.  Maxwell  228 

V.  McClure  8 

u.McGran  159,  161,  162 

V.  M'Dermot  105 

V.  Mott  291 

V.  Neilson  445, 464 

V.  Quilter  539 

V.  Ralston  363 

V.  Smith  447 

I'.  Southouse  157 

V.  Stackpole  316 

V.  Tapscott  181 

V.  Toells's  Admr.  256 

V.  Vigne  460 

V.  Waters  255,  258 

V.  "Williams  412,  512 

r.  Wood  304 

Browne  v.  Delano  366 

Brownell  v.  Bonney  119 

V.  Flagler  228 

Brown's  Appeal  187 

Bruce  v.  Bruce  318,  324 

V.  Hunter  269 

V.  Pearson  14,  17 

V.  Schuyler  316 

Brucn  v.  Marquand  176 

Bruni,  in  re                                '  397 

Brundrett,  e.r  ;)«?<e  284 

Bruttou  V.  Burton  138,  177 


xxxu 


INDEX   TO   CASES   CITED. 


Co. 


Page 

Bryan  v.  Horseman  232,  233,  23G 

V.  Lewis  55 

Brj'ant  v.  Commonwealth  Ins.  Co.       349, 

380,  472,  473,  474 

135,  137, 142 

431 

139 

110,  111 

175 

432 

173 

176 

118 

413 

223 

252 

174 

139, 161 


V.  Moore 
V.  Ocean  In 
Brycc  v.  Brooks 
Bryilcn  v.  Taylor 
Brydges  v.  Branfill 
Bryncs  v.  Alexander 
Buclian  v.  Sumner 
BucUantin  v.  Curry 

V.  Marshall 
V.  Ocean  Ins.  Co 
Buck  I'.  Evans 
V.  Fisher 
V.  Winn 
Buckbec  V.  Brown 
Buckcc  V.  The  U.  S.  Ins.  Ann.  &  T 

Co.  541 

Bucker  v.  Haniiay  232 

Buckingham  v.  Burgess  167 

V.  McLean  263,  295 

Buckley  v.  Barber  191 

v.  Buckley  173 

V.  Guildbank  255 

V.  Hann  85 

Buckman  v.  Barnum            .  164 

V.  Levi  51,  226 

Buckner  v.  Finley  93 

V.  Smith  11 

Buddington  v.  Stewart  334,  335,  401 

Buic  V.  Turner  430,  523,  524 

Buffum  V.  Green  276 

Bulger  V.  Roche  95,  323 

Bulkey  v.  The  Derby  Fishing  Co.        134 

Bull  V.  Parker  81 

BuUard  v.  Eodger  Williams  Ins.  Co.  425, 

427,  441,  462,  468 

Buller  V.  Harrison  150 

Bullock  V.  Babcock  9 

V.  Boyd  263,  268 

V.  Campbell  249 

Bumgarduer  v.  Circuit  Court  316 

Bumpcss  V.  Webb  182 

Bunn  V.  Guy  26 

Bunney  v.  Poyntz  82 

Burbank  v.  Rockingham  M.  F.  Ins. 

■   Co.  408,  518,533 

Burcklc  ?;.  Eckhart  168 

Burden  v.  M'Elheuny  232 

Burdett  v.  Willett  302 

Burdick  v.  Green  82 

Burgess  v.  Atkins  189 

ex  parte  '285 

Burgh  ?;.  Legge  112,118 

Burk  y.  M'Clain  311 

Burke  r.  McKay  110 

Burleigh  v.  Stott  241 

Burlcy  v.  Harris  183 

V.  Riissell  8 
Burlington  County  Bank  v.  Miller          92 

Burmcstcr  r.  Hodgson  363 


Burnet  v.  Biscoo 

Burnett  i'. ^Kensington 

Burnham  v.  Allen 

V.  Bennett 
V.  Gcntrys 
V.  Webster 
V.  Wood 

Burnside  v.  Merrick 

Burr  V.  Sim 

Burrell  v.  Jones 
I'.  North 

Burridge  v.  Manners 
V.  Row 

Burrill  v.  Cleeman 


Page 

25 

421 

88 

10 

259 

102 

102 

173 

548 

70 

216 

127 

535 

361 


Burritt  v.  Saratoga  Co.  Mut.  F.  Ins. 

Co.  422,430,431,496,520,521, 

522,  523,  524 

Burrough  v.  Moss  101 

Burroughs  v.  Bloomer  246 

V.  Turner  461 

Burrows  y.  Jemino  318' 

Burton's  Case  254,  256 

Burtus  V.  Tisdalc  186 

Bush  V.  Livingston  256 

Busk  V.  ])avis  48 

V.  Fearon  342 

V.  Roy.  Exch.  Ass.  Co.                 442 

Bussard  v.  Levering  107 

Bussy  V.  Donaldson  381,  400 

Butcher  v.  Formau  293 

Butler  i'.  AUnirtt  416 

V.  Basing  216 

V.  Breck  11 

r.  Hcano  224 

V.  Hildreth  283 

i:  Howe  245 

V.  Wildman  360,  440 

i\  Winters  235 

Butman  v.  Monmouth  Fire  Ins.  Co.      527 

Batt,  ex  parte  309 

Butterfield  v.  Forrester  228 

V.  Jacobs  237 

v.  Kidder  •    261 

Butts  V.  Dean  82 

Buxton  r.  Jones  110 

Byers  r.  Fowler  295 

Byrne  v.  Crowinshield  95,  246,  323 

V.  Doughty  137 

v.  Louisiana  State  Ins.  Co.         454 

V.  Pattinson  361 

r\  Schwing  160 

Byrnes  v.  Nat.  Ins.  Co.  485 


Cabarga  i\  Seeyer  23 

Cabot  I'.  Ilaskins  38,  77 

Cadawalader  r.  Howell  323 

Cadogan  v.  Kcnnct  276 

Cady  V.  Shepherd  176 

CaftVey  v.  Darby  263 

Cahill  V.  Bigelow  78 
Calbrcath  v.  Gracy          42.3,  468,  469,  470 

Caldwell  v.  Cassidy  109 


INDEX   TO    CASES   CITED. 


XXX  111 


Tasc 
CaUhvell  V.  Lcibcr  18.3 

V.  IMurpIiy  219 

V.  Stilemaii  192 

V.  St.  Louis  Perpet.  Ins.  Co.  440 
Califf  r.  Danvers  197,203 

Caliot  V.  Walker  20.5 

Calkins  r.  Lockwood  50 

Call  V.  Scott  2.'57 

Callaghan  v.  Atlantic  Ins.  Co.       424,  431 
Callahan  v.  Boarman  83 

Callctt  V.  Morrison  495,  561 

Callow  I'.  Lawrence  127 

Calvert  v.  Gordon  68 

Camberling  v.  M'Call  464 

Cambridge  v.  Anderton  462,  464 

Camden  v.  Anderson  416 

Camden  and  Amboy  R.  K.  Co.  v.  Bal- 

dauf.       "  222,  223, 224 

and  Amboy  K.  R.  Co.  v. 

Burke  219,  226 

&c.,  Ti-ansportation  Co.  v. 

Belknap  203 

Camidge  v.  AUenby  126 

Cammack  v.  Johnson  189,  190 

Camp  V.  Grant  188,  192 

V.  Tompkins  97 

V.  Scott  102 

Campbell  v.  Carter  16 

V.  Christie  406 

ex  parte  289 

V.Hall  318 

V.  Hassell  161 

V.  Tunes  433 

V.  Knapp  66 

V.  Morse  215 

V.  Shields  257 

V.  Stein  338 

w.  Webster  111,119 

Canal  Bank  i^ank  of  Albany  129 

Candy,  e.r  ;)rtr/e  297 

Cannan  v.  Denew  284 

V.  Meaburn  380 

Cannon  v.  Alsbury  9 

Capel !;.  Thornton  152 

Capen  v.  Washington  Ins.  Co.  429 

Cappock  V.  Bower  29 

Card  V.  Hope  335 

Cargill  V.  Corby  166 

Carleton  v.  Sumner  45 

Carley  v.  Vance  81.  109 

V.  Wilkins  '    57 

Carlis  v.  M'Laughlin  255 

Carlisle  v.  The  Eudora  336 

Carlos  V.  Fancourt  87 

Carmichael  I'.  The  Bank  of  Penn'a      111 

Carnegie  v.  Morrison  38,  94 

Carpe  v.  Overton  8 

Carpenter  v.  Am.  Ins.  Co.  152,  522 

V.  Marnell  302 

V.  Mutual  Safety  Ins.  Co.    492 

ih  Providence  Wash.  Ins.  Co. 

413,  439,  509,510,  517,525, 

532,  534 


Tage 
Carpue  v.  The  L.  &  R .  Railway 

Co.  206,  220 

Carr  ZJ.  Burdiss  281,283 

V.  Clough  48 

V.  Hilton  434 

V.  Ilinchliff  148,  149 

V.  L.  &  Y.  Railway  225 

Carrere  v.  Union  Ins.  Co.  423 

Carrington,  ex  parte  285 

V.  Manning  237 

Carroll  v.  Boston  Mar.  Ins.  Co.    407,  531  ^ 

534 

Carrutlicrs  v.  Gray  451 

V.  Sheddon  406 

V.  West  291 

Carsley  v.  White  384 

Carson  v.  Mar.  Ins.  Co.  411,  412 

Carstairs  v.  Stein  260 

Carter  v.  Boehm  430,  433,  560 

V.  Champion  295 

V.  Dean  284 

V.  Flower  1 1 8 

V.  Hamilton  21 

r.  Rockett  511 

V.  Toussaint  76 

z;.  Union  Bank  110,  111 

V.  Willard  45,  52 

Carteret  v.  Paschal  10 

Cartland  v.  Morrison  47 

Cartwright  v.  Cooke  32 

V.  Hateley  157 

V.  Williams  103 

Carvick  v.  Vickcry  124 

Cary  v.  Curtis  151 

V.  Gruman  58 

Case  V.  Boughton  26 

V.  Davidson  476 

V.  Hartford  Ins.  Co.  447,  526 

Casey  v.  Brush  181 

Cash  V.  Giles  53 

Casscdy  v.  Louisiana  State  Ins.  Co.      468 

CassQns,  ex  parte  279 

Cassiday  ?\  M'Kcnzie  143 

Caster  v.  Murray  244 

V.  Tompkins  County  Bank         1 50 

Castling  v.  Aubert  139 

Cathcart  v.  Potterfield  295 

Catlett  V.  Pacific  Ins.  Co.  514 

Catlin  V.  Bell  155 

V.  Springfield  Fire  Ins  Co.  503,  521, 

527,  535 

Catling  V.  Skoulding  232,  238,  244 

Caton  V.  Rumney  202 

Catron  v.  Tenn.  Ins.  Co.  525 

Caunt  V.  Thompson  112 

Caustcn  v.  Burke  183 

Cauturier  v.  Hastie  159 

Cave  V.  Colman  57 

Cayuga  Bank  v.  Bennett  116 

Co.  Bank  v.  Hunt  104, 107,  263 

Caze  V.  Baltimore  Ins.  Co.  351 

V.  Rcilly  368,  481 

V.  Richards  479 


XXXIV 


INDEX   TO    CASES    CITED. 


Center  v.  Am.  Ins.  Co.  467 
Certain  Logs  of  Mahogany  345,  347,  348, 

359,300 

Chadbourn  i'.  Watts  257,  258 

Chamberlain  v.  Chandler  200 

V.  Farr  44 

V.  Hopps  85 

r.  llccd  374 

Chamberlin  v.  Cnylcr  238 

Ciiambers  r.  Griffiths  54 

Champion  v.  Short  53 

Champlin  v.  Butler  339 

7\  Lay  ton  1 50 

Chandler  v.  Bcldcn  346,  348 

V.  Spraguc  346 

V.  Worcester  Fire  Ins.  Co.     527 

Channell  v.  Ditchburn  241 

Clianoine  u.  Fowler  116 

Chanter  v.  Hopkins     _  59 

Chapel  V.  Hickes         '  37 

Chaplin  v.  Hawes  229 

V.  JNIoore  11 

V.  Eowlcy  30 

Chapman  v.  Black  258 

V.  Derljy  292 

V.  Durant  335,  337 

V.  Forsyth  309 

V.  Keane  116 

I?.  Koops  189,190 

V.  Lamphire        -  284 

V.  Morton  144,  154 

V.  Robertson  95,  322 

V.  Walton  156 

V.  White  .         91 

Chappel  V.  Hieks  53 

V.  Marvin  45,  62,  76 

Chappie  V.  Cooper  7 

Charles  v.  Marsden  97,  291 

Charlton  v.  Lay  36 

Charnley  v.  Winstanley  143 

Charter  I'.  Trevelyan  157 

Chase  v.  Eagle  Ins.  Co.  427, 456 

V.  Goble  283 

tj.  Maberry  198 

f.  Taylor  111 

V.  Wash.  Mut.  Ins.  Co.  513 

V.  Wcstmore  348 

Chase's  Executors  v.  Burkholder  35 

Chaters  v.  Bell  111,  125 

Chattock  V.  Shawe  560 

Chazourncs  y.  Edwards  180 

Cheap  V.  Cramond  168 

Chedworth  v.  Edwards  157 

Cheek  v.  Roper  104 

Cheever  v.  Smith  338 

Chenot  v.  Lefevre  240 

Chenowitli  v.  Chamberlain  111 

V.  Dickinson  203 

Ches.  Ins.  Co.  v.  Stark  469,  470 

Cheshire  v.  Barrett  6 

Chesmcr  v.  Noyes  1 1 1 

Chesterfield  v.  "Janser  202 

V.  Manuf.  Co.  v.  Dehon     303 


Chevallier  v.  Straham 
Chick  V.  Trevett 
Cliickering  v.  Fowlor 
Chicopee  Bank  v.  Chapin 
Child  V.  Sun  Mut.  lus.  Co. 
Childcrs  V.  Deane 
Chiles  V.  Nelson 
Chion,  ex  parte 


Page 

200,  213,  214 

26 

209,  210 

151 

491 

255,  268,  269 

20 

302,  303 


Chippendale  v.  L.  &  Y.  Railway  Co.    225 

V.  Thurston  261 

Chissum  v.  Dewes  191 

Cliomqua  v.  Mason  247 

Chouteau  v.  Steamboat  St.  Anthony    216 

Christie  v.  Griggs  219,  220 

V.  Lewis  359,  360,  361,  449 

V.  Sccretan  418,  431 

Christophers  v.  Sparke         ■  '  234 

Christy  v.  Flemington  237,  242 

V.  Row  3.53 

Church  V.  Barlow  144 

V.  Bedient  470 

V.  Hubbart  406 

ij.  Knox  189 

V.  Landers  137 

V.  Sparrow  179 

V.  Sterling  137,  157 

Churchill  v.  Suter  266 

Cincinnati  Ins.  Co.  v.  Bakewell     469,  477 

Citizens  Bank  v.  Nantucket  Steamboat 

Co.  199,205,216 

City  Fire  Ins.  Co.  v.  Corlies  526 

Glamorgan  v.  Lane  5 

Claphara  v.  Cologan  437 

Clark  r.  Alice  185,187 

V.  Badgley  261 

V.  Barlow  252 

V.  Barnwell   215,  341,  344,  346,  355 

V.  Dibble  ^  181 

V.  Dutcher  ^  236 

V.  Faxton  201,  222 

y.  Ilougham  231,232,233,242 

V.  Plutchins  51 

V.  King  87 

V.  Leslie  7 

V.  Man's  Ins.  Co.  495,  521,  522,  523, 

524,  538 

V.  Mass.  F.  &  M.  Ins.  Co.  475 

V.  Man  son  60 

V.  McDonald  219 

V.  Moody  157,  248 

V.  N.  Eng.  Mut.  F.  Ins.  Co,       408, 

414,  .533 

V.  Ocean  Ins.  Co.        344,  409,  410, 

418,  440 

V.  Protection  Ins.  Co.  415,  416 

V.  Sigourney  26,  241 

V.  Spence  197J  227 

V.  The  Hundred  of  Blything      414 

V.  The  Mass.  Ins.  Co.  350 

V.  Unit.  Mar.  &  F.  Ins.  Co.  478 

V.  U.  S.  F.  &  M.  Ins.  Co.  482 

Clarke  v.  Bradshaw  232 

V.  Courtney  145 


INDEX   TO   CASES   CITED. 


XXXV 


Page 

Clarke  v.  Dutclier 

236 

V.  riremen's  Ins.  Co. 

495 

V.  Cock 

129 

V.  Percival 

86 

V.  Pcrricr 

155 

V.  Spence 

33.3 

Clark's  Ex's  v.  Van  Kicmsdyk 

137 

Clarkson  v.  Edes 

960 

V.  Garland 

255 

V.  riiccnix  Ins.  Co. 

465 

482 

Clary  v.  Protection  Ins.  Co. 

495 

Clason  V.  Bailey 

77 

V.  Smith 

434 

Clay  V.  Cottrell 

180 

V.  Wood 

227 

229 

ClaJ'ton  V.  Gosling 

8 

7,  98 

V.  Hunt     • 

223 

V.  Lord  Nugent 

22 

«      V.  The  Harmony 

390 

Clealand  v.  Walker 

149 

Clegg  V.  Levy 

318 

Cleghorn  v.  Ins.  Bank  of  Columbus  186, 188 

Clement  I'.  Foster  186 

Cleodaniel  v.  Tuckerman  362,  363, 364 

Cleveland  ?'.  Union  Ins.  Co.  •                442 

Cleave  v.  Jones  240 

Clififord  V.  Burton  12 

V.  Hunter  427 

Clift  V.  .Schwabe  545 

Clinan  v.  Cooke  136 

Clode  r.  Bagley  115 

Cloutman  v.  Tunison  397,  398 

Clugas  r.  Penaluna  318 

Coaiter  v.  Coalter  245 

Coate  V.  Williams  164 

Coates  V.  Lewis  161 

Cobb  V.  Becke  156 

V.  Page  66 

V.  Symonds  285 

Cobden  v.  Bolton  224 

Coblct  V.  Bachey  22 

Coburn  v.  W^are  37 

Cochran  v.  Perry  170 

V.  AVheeler    ^  127 

Cock  V.  Goodfellow  11 

V.  Taylor  353 

Cocke  V.  Bank  of  Tennessee  1 1 7 

Cockell  V.  Taylor  27 

Cockerill  v.  Cincinnati  Mut.  Ins.  Co.    404 

Cocking  V.  Frazer  421 

V.  Ward  79 

Cockram  v.  Fisher  424 

Cocks  V.  Borradaile  124 

Cocran  v.  Irlam  155 

Codman  v.  Rogers  244 

V.  Lubbock  81 

Codwise  v.  Gelston  295 

Cofer  V.  Flanegan  548 

Coffee  ?;.  Brian  181 

Coffin  V.  Coflin  248 

V.  Jenkins  ■            397,  398 

V.  Newburyport  Mar.  Ins.  Co.    412, 

442,  455 


Page 

Coffin  V.  Storer  352,  361 

Coffman  v.  Hampton  54 

Coggeshall  v.  Am.  Ins.  Co.  460 

Coggs  V.  Barnard    196,  198,  199,  213,  214 

Cogswell  V.  Dollivcr  238 

Cohea  r.  Hunt  108 

Cohen  i'.  Hinckley  445 

V.  Hume  202 

Coit  V.  Smith  ^  433 

V.  Tracy  '  241 

Colby  r.  Hunter  424 

V.  Ledden  296 

Cole  V.  Blake  81 

%     V.  Cole  6 

V.  Goodwin  220,  222,  223,  227 

V.  Jessup  246 

V.  Lockhart  265 

V.  Pennoyer  4 

V.  Sackett  82,  193 

V.  Taylor  23 

Coleman  v.  Brig  Harriet  391 

V.  Collins  212 

V.  Lambert  353 

Coles  V.  Bell  138 

V.  Mar.  Ins.  Co.  441 

V.  Trecothick  27,  136 

Colgin  V.  Cummins  190 

Collier  v.  Nevill  256 

Coliot  V.  Walker  263 

Colis  V.  Davis  12 

CoUingc  V.  lieywood  249 

Collins  V.  Blantern  34 

V.  Butler  104 

ex  parte  93 

V.  Martin  97,  151 

V.  Secreh  259 

V.  Union  Transp.  Co.  353 

Collis  V.  Emett  126 

Collycr  D.  Dudley  157 

Cologan  V.  London  Ass.  Co.  421,  469,  476 

Colombier  v.  Slim  •127 

Colt  V.  M'Mechen  215 

V.  Nettervill  285 

V.  Noble  144 

Columbian  Ins.  Co.  v.  Ashby        367,  368, 

369,  414,  466,  472,  479,  481 

Columbian  Ins.  Co.  e;.Catlett  411,  455,  471 

V.  Lawrence  412, 

443,  508,  511,  522,  523,  525,  527,  535 

Columbian  Ins.  Co.  v.  Lynch        419,  420 

Colville  V.  Besley  36 

Colvin  V.  Holbrook  150,  151 

V.  Newberry  ^  360 

V.  Williams  77,  161 

Combe's  case  155 

Combs  V.  Boswell  193 

Comfort  V.  Eisenbeis  293 

Commercial  Bank  v.  Cunningham        1 50 

V.  French  148 

V.  Nolan  263 

V.  Wilkins         185,  186 

Com.  Bank  of  Albany  11.  Hughes  106 

Buffalo  V.  Kortright       135 


XXXVl 


INDEX  TO   CASES   CITED. 


Pape 
Com.  Bank  of  Lake  Eric  r.  Norton  135, 155 
Com.  and  K.  Bank  v.  Ilaracr  108 

Commonwealth  v.  Nichols  154 

V.  Power  206 

V.  Kickctson  399 

Compton  V.  Bearcroft  318 

V.  Bedford  281 

Comstock  V.  Grout  291,  309 

Conant  v.  The  Seneca  County  Bank    150 
Conard  v.  AtLantic  "  295 

Concord  Bank  v.  Gregg  152 

Conn  V.  Coburn  7,  65 

Connecticut  v.  Jackson  268,  269 

Conncrw.  Martin  1^ 

Connor  v.  Smytho  364 

Conoveri'.  Mut.  Ins.  Co.  of  Albany  533,408 
Conrad  v.  Atlantic  Ins.  Co.  332 

Conro  V.  Port  Uenry  Iron  Co.        137, 149, 

150,  172 

Conroe  v.  Birdsall  8 

Const  V.  Harris  166,  177 

Constable  v.  Noble  460 

Conway  v.  Porbes  365 

V.  Gray  365 

Cook  V.  Black  553 

V.  Bradley  25 

V.  Caldecott  280,  283 

V.  Champlain  Transp.  Co,    227,  228 

V.  Collingridge  171 

V.  Field  549 

in  re  .    295 

449 
316 
138 
86 
179 
157 
53 


V.  Ins.  Co. 
V.  Moftat 
Cooke  V.  Callaway  . 
V.  Colehan 
V.  Seeley 
Cooley  V.  Betts 
Coolidgc  V.  Brigham 

V.  Gloucester  Mar.  Ins.  Co.  409, 

414,  472,  474,  476 

•       V.  Gray  466 

V.  N.  Y.  Firem.  Ins.  Co.  423 

V.  Payson  128 

Coope  V.  Eyre  164 

Cooper  V.  Elston  78 

V.  Mever  130 

V.  Rankin  136 

V.  Turner  234 

Cope  V.  Smith  69 

Copelaud  v.  Mercantile  Ins.  Co.    146,  157 

V.  N.  Eng.  Mar.  Ins.  Co.  423, 

425,  426,  442,  443,  527 

V.  Stephens  298 

Copeman  v.  Callant  302 

Copin  V.  Walker  148 

Copis  I'.  Middletoa  65,  66 

Coppin  V.  Braithwaite  206 

V.  Coppin  319 

r.-Craig  161 

Cordray  v.  Mordecai  339 

Corlies  v.  Gumming  141,  160 

Cormack  v.  Gladstone"  456 

Cornell  v.  Green  81 


Page 

Cornell  v.  Le  Roy  535 

Cornfoot  v.  Fowke  143 

Corning  v.  Southland  138 

Cornish  v.  Murphy  342 

Cornwal  v.  Wilson  155, 160 

Cort  r.  Del.  Ins.  Co,  425 

Cory  r.  Scott  118 

Cotter  V.  Murray  244 

V.  Phrenix  Ins.  Co.  497 

Costigan  v.  Newland  150,  151 

Cotel  «.  llilliard  311 

Cothay  v.  Fermell  148,  184 

V.  Tute  51 

Cottam  V.  Partridge  238,  243 

Cotterel  v.  Harrington           ■  263 

Cotterill  y.  Starkey  227,228 

Cottin  V.  Blanc              •  65 

Coulon  V.  Bowne  434 

Coulter  V.  Robertson  34 

Countess  of  Harcourt      ,  386 

Courcier  v.  Ritter  154 

Court  I'.  Martineau  432,  434 
Courtnay  v.  Miss.  F.  &  M.  Ins.  Co.       437 

Cousins  V.  PaddoQ  53 

Coutts  V.  Walker  295 

Coventry  v.  Atherton  245 

V.  Barton  155 

Covil  V.  Hill  46 

Covington. w.  Roberts  370 

Cowden  z'.  Elliot  191 

Cowell  V.  Simpson  139 

Cowen  V.  Simpson  149 

Cowie  V.  Harris  281 

V.  Remfry  77 

Cowperthwaite  v.  Sheffield  87 

Cox  V.  Prentice  150 

V.  Reid  336 

V.  Troy  85 

V.  United  States  321 

Coye  V.  Leach  547 

V.  Fowler  26 

Crabtree  v.  May              .  7 

Crafts  V.  ]\Iott  293 


Craig  V.  Childress  ^ 
V.  Hewitt 

199 

250 

V.  Kittredge 

16 

V.  Murgatroyd 

420,  552 

Craighead  v.  The  Bank 

238 

Cram  v.  Aiken 

370,371,480 

V.  Hendricks 

266,  267 

Cramlington  v.  Evans 

122 

Crane  v.  Dygert 

252 

V.  French 

177 

V.  Gough 

78 

V.  Hubbcl 

256 

Cranmer  v.  Gernon 

389 

Cranston  v.  Philadelphia 

Ins.  Co.          139 

Crawford  v.  Barkley 

138 

V.  Cully 

87 

V.  Smith 

■    42,48 

V.  The  Branch  Bank  at  Mobile 

113 

r.  Wilson 

324 

INDEX   TO    CASES    CITED. 


XXXVll 


Page 

Crawfords  v.  Taylor  276 

Crawshay  v.  Collins  171,  191,  306 

'  I'.  Homfray  348 

f.  Maiilc  169,170,190 

Craythorne  v.  Swinburne  65 

Creed  V.  Stevens  257 

Cramer  v.  Higginson  82 

Cripps  V.  Davis  102,  237,  242 

Cri tchlow  v:  Parry  1 24 

Crocker  v.  Higgins  38 

Crockett  ?;.  Dodge  369 

Crockfbrd  v.  Winter  154 

Crofts  I'.  AVaterhouse  219 

Cromwell,  ex  parte  285 

Crooks  V.  Moore  46 
Croker  v.  People's  IMut.  Fire  Ins.  Co.   520 

Cross  V.  Cheshire  182 

V.  Peters  55 

Crosse  v.  Smith  116 

Crossby  v.  Ham  126 

Crouch  V.  The  London,  &c.  Railway 

Co.  205 

Crow  V.  Rogers  37 

Crowley  v.  Cohen  412,  413,  513 

Crozier  v.  Smith  361 

Cruchley  v.  Clarence  89 

Cruder  v.  Phil.  Ins.  Co.  427,  461 

Cruikshank  v.  Janson  460 

Cratchley  v.  Mann  89 

Cullen  V.  Butler  440,  451 

Culver  V.  Ashley  137 

Cummins  v.  Wire  .         257. 258 

Cunliffe  v.  Harrison  76 

Churchill  v.  Rosebcck  229 

Curcier  v.  Phil.  Ins.  Co.  472 
Curry  v.  Commonwealth  Ins.  Co.        430, 
504,  511,  523,  535 

Curtin  v.  Patton  5 

Curtis  V.  Hutton  •  313 

V.  Pugh  76 

Cushing  ;;.  Thompson  510 

Cushman  v.  Bailey  168 

V.  Holyokc  48 

N.  W.  Ins.  Co.  497,  530 


Cuthbart  v.  Haley 

Cutler  V.  Close 
V.  How 
V.  Hand 
V.  Timrlo 
V.  Windsor 

Cutter  i;.  Devanport 
V.  Powell 

Cuyler  v.  Sanford 
V.  Stevens 


258 

37 

257 

552 

339,  360 

360 

319 

356,  388 

263 

107, 112,  115 


D. 


Dabney  I'.  Stidgcr  117 

Da  Costa  v.  Jones  99 

Dadmun  Manf.  Co.  V.Worcester  Mut. 

Fire  Ins.  Co.  508,  533 

Dafter  v.  Cresswell  388 


Page 

Dahlgreen  v.  Duncan  193 
Dalby  V.  The  Ind.  &  Hon.  Life  Ass. 

Co".  551 

Dale  V.  Hall  444 

V.  Hamilton  165 

V.  Roosevelt  26 

V.  Stimpson  76 

V.  Young  70 

Dalgleish  v.  Hodgson  424 

Dalglish  V.  Davidson  486 

V.  Jar  vie  560 

Dally  V.  Smith  284 

Dalton  V.  Irvin  162 

Damon  v.  Granby  146 

Dana  v.  Fiedler  '  ■    252 

I'.  Lull  175 

V.  Stearns  6 

Danforth  v.  Allen  166 

Daniel  v.  Cartony  256 

V.  Mitchel  55,  57 

Daniell,  ex  parte  284 

D'Anjou  V.  Deagle  216 

Darbishire  f.  Parker  114 

Darby  v.  Baines  335 

V.  Mayer  319 

D'Arcy  v.  Lyle  155 

Darling  v.  March  180 

Darsey  v.  Packwood  32,  33 

Dartnall  i-.  Howard  156 

Davenport  v.  Mason  79 

V.  Runlett  180 

V.  Tilton  296 

Davcy  v.  Mason  216 

David  V.  EUice  193 

David  Howes,  in  re  282 

Davidson  v.  Case  476 

V.  Gwynne  356 

V.  Stanley  137,138 

Davies  v.  Edwards  239 

V.  Humphreys  39,  249 

V.  Mann       '  228 

Davis  V.  A  New  Brig  402 

V.  Boardraan  405 

V.  Child  401,  402 

V.  Clarke  131 

V.  Desauque  191,  194 

y.  Francisco  106 

V.  Garett  163 

V.  Garr  262 

V.  Garrett  156 

V.  Hardacre  260 

V.  Higford  2G8 

V.  Huggins  69 

V,  Jacquin  4 

V.  Johnston  335 

V.  Lane  134,  171 

V.  Maxwell  29 

V.  Moore  44,  76 

V.  Morgan  27 

V.  Shields  77 

V.  Simpson  299 

V.  Smith  5 

V.  Steiner  236 


XXXVlll                                  I 

NDEX   TO    C^ 

Page 

Davis  V.  The  Sonera 

335 

V.  Waterman 

154 

Davoue  v.  Fanning 

299 

Davy  V.  Hallett 

410 

Dawes  v.  Boylston 

311 

V.  Cope 

52 

Dawson  v.  Atty 

152 

V.  Collis 

58 

V.  Lawes 

69 

Day  V.  Cummings 

258 

V.  Crawford 

154 

Dean  v.  Animus 

381 

V.  Hall 

120 

V.  Hewitt 

236,  242 

V.  Hong 

360 

V.  James 

81 

V.  Mason 

36 

Dearborn  v.  Turner 

54 

Dease  v.  Jones 

246 

Deason  v.  Boyd 

6 

De  Begnis  v.  Armistead 

415 

l)e  Berdt  v.  Atkinson 

91 

Deblois  v.  Ocean  Ins.  Co.     427,  457,  460, 

465,  466 
De  Bolle  v.  Penn.  Ins.  Co.  493,  514 

De  Caters  v.  Le  Hay  De  Charniant      157, 

299 

Dechapearouge,  ex  parte  297 

Declvard  y.  Case  175 

De  Costa  v.  Scandret  430 

Decouclie  v-  Savetier  323 

Decreet  v.  Burt  183 

Dederir  v.  Del.  Ins.  Co.  472 

Deering  v.  Chapman  34 

ex  parte  284 

De  Forest  v.  Fulton  F.  Ins.  Co.    405,413, 

439,493,  512,  513 

V.  The  Fire  Ins.  Co.  160 

V.  Hunt  232 

V.  Strong  263 

V.  Frarv  86 

De  Gaillon  I'.  Aigle  162 

De  Hahn  v.  Hartley  406 

Deidericks  v.  Com.  Ins.  Co.  468 

De  Bidder  v.  M'Night  41 

Delahay  v.  Memphis  Ins.  Co.  525 

Delafield  v.  Illinois  141,  146,  155 

Delaraanier  v.  Winteringham  390 

Dclamatre  r.  Miller  107 

Delano  v.  Bedford  Ins.  Co.  443 

V.  Blake  6 

V.  Rood  255,  259 

Dclanney  v.  Strickland  164 

Delmonico  v.  Guillaume  173 

De  La  Vega  v.  Vianna  96,  322 

Deloach  v.  Turner  235 

Delonguemare  v.  Tradesmens'  Ins.  Co. 

496,  521 
De  Longuemere  v.  New  York  Fire  Ins. 

Co.  433 

V.  Phcenix  Ins.  Co.     419 

Delmada  v.  Motteux  452 

Demarest  v.  Wynkoop  246 


Dcmlng  V.  Colt 
Demoss  v.  Brewster 
Donew  r.  Daverell 
]>einiett  r.  Wyman 
Dennis  v.  Ludlow 
Dennison  v.  Lee 


Paee 
174, 175 

178 
156,  162 

102 
406,  424 

252 


V.  Thomaston  Mut.  Ins.  Co. 

430,  431 

Denniston  v.  Irnbrie  269 

Denston  v.  Henderson  94 

V.  Perkins  303 

Denton  v.  Embury  248 

Depau  V.  Humphreys  95,  321 

V.  Ocean  Ins.  Co.  374,  467,  468, 

486 

Depeyster  v.  Col.  Ins.  Co.  466 

Derwort  V.  Loomer  219 

Descadillas  v.  Harris  337 

Desha  v.  Holland  167 

V.  Smith  183 

Deshon  v.  Merchants'  Ins.  Co.        24.  416 

De  Silvale  r.  Kendall  419 

De  Sobry  v.  De  Laistre  318 

De  Tasstett  v.  Crousillat  156 

De  Tasted,  ex  parte  294,  297 

De  Tastet  v.  Baring  94 

De  Vaux  v.  I' Anson  418,  440 

V.  Salvador  443,  446 

Devaux  v.  Steele  412 

Devaynes  v.  Noble  192 

Devereaux  v.  Barclay  207 

Devall  V.  Craig  147 

Dewar  v.  Span  322 

Dewces  v.  Morgan  57 

De  Wolf  V.  Harris  332 

V.  Johnson  258,  262 

Dey  V.  Dunham  268 

Dicken,  ex  parte  289 

Dickenson  v.  Com.  Ins.  Co.  434 

V.  Haslet  356 

Dickerson  v.  Seelye  347 

Dickey  v.  Am.  Ins.  Co.  465 

V.  Baltimore  Ins.  Co.  460 

V.  Linscott  36,162 

V.  New  York  Ins.  Co.     465,  466, 

469 

V.  Unit.  Ins.  Co.  462 

Dickins  v.  Beal  106 

Dickinson  i'.  Granger  181 

V.  Hatfield  236 

V.  Legare  175 

V.  Lilwall  146 

V.  Valpy  167,  175 

Dickson  I'.  Alexander  179 

V.  Dickson  318 

ex  parte  294 

V.  Jordan  50,  59 

V.  Thomson  231 

Didier  v.  Davison  243,  244,  246 

Dilk  V.  Keighloy  7 

Dilworth  v.  Sinderling  252 

Dinsmore  v.  Dinsmore  236.  241 

Diplock  V.  Blackburn  157 


INDEX   TO    CASES   CITED. 


XXXIX 


Dispatch  Line,  &c.  v.  Bellamy  Manuf. 

Co.  134,  137,  146,  155 

Ditchburn  v.  Goldsmith  99 

Dixon  V.  Clark  81 

V.  Dunham  210 

V.  Myers  48 

V.  Nuttall  103 

V.  Sadler  425,  426,  442 

V.  Stansfcld  139 

V.  The  Cyrus  392 

V.  Yates  42 

Doane  v.  Keating  370 

D'Obree,  ex  parte  282,  31 1 

Dobree  w.  Eastwood  113 

I'.  Mullctt  116 

Dobson  V.  Droop  364 

i\  Land  510 

V.  Sotheby  494,  502,  503,  506 

Dodge  V.  Adams  98 

V.  Bartol  370,  371,  480 

V.  Burdell  25 

V.  Perkins  157,  251 

V.  Tileston  162 

V.  Union  Ins.  Co.  373,  380,  483 

Dodgson  r.  Bell  11 

Dodington  v.  Ilallet  338 

Doe  d.  Caldwell  v.  Thorp  246 

d.  Davidson  v.  Barnard  259 

V.  Goldwin  138 

V.  Gooch  263 

V.  Greening  22 

V.  Jesson  548 

V.  Lyford  22 

d.  Mann  v.  "Walters  •       138 

V.  Martin  152 

d.  Metcalf  u.  Browne  255,  260 
V.  Oxenden  22 

e.  d.  Pitt  V.  Laming  490 
d.  Rhodes  v.  Eobinson  156 
V.  Smyth  304 
V.  Warren  268 

Doggett  V.  Emerson  55,  57,  138 

V.  Vowell  29 

Doig  V.  Barkley  268 

Dolman  v.  Orchard  171 

Domett  V.  Beckford  353 

Dommett  v.  Bedford  306 

Don  V.  Lippman  95,  322,  323 

Donallen  v.  Lenox  34 

Donath  v.  Broomhead  60 

Donclson  v.  Posey  165 

Doner  v.  Stauffer  188,  190 

Doorman  v.  Jenkins  156,  198 
Dorchester  and  Milton  Bank  v.  N. 

England  Bank  144,  155 
Dorr  V.  New  Jersey  Steam  Navigation 

Co.  221,  222 

V.  Pacific  Ins.  Co.  334 

V.  Swartwout  246 

V.  Union  Ins.  Co.  482 

Doty  V.  Bates  175 

Dougherty  v.  The  Western  Bank  of 

Georgia  235 


Page 

Dougherty  v.  Van  Nostrand  191 

Dougal  V.  Kemble  353 

Douglas  V.  Browne  298 

V.  Moody      364,   369^  373,  482, 

483 

V.  Oldham  322 

V.  Patrick  81 

V.  Winslow  190 

Douglass  V.  Eyre  386,  387 

V.  Rowland  67,  70 

V.  McChesney  253,  259 

V.  Winslow  186,  189 

Dow  V.  Drew  269 

V.  Hope  Ins.  Co.  438 

tJ.  Say  ward  166,189,190 

V.  Wiiittcn  406,  407,  438,  495 

Dowdall  V.  Lenox  255 

Dowdle  V.  Camp  78 

Dowkes  V.  Lord  Dehorane  87 

Down  V.  Hailing  103 

Downer  v.  Brackett  296 

Downs  V.  Collins  170 

V.  Ross  78 

Dows  V.  Cobb  50,  208,  346 

V.  Greene  137 

Dowthwaite  v.  Tibbut  232 

Dox  V.  Dey  252 

Drayton  u.  Dale  129 

Dreher  v.  JEtna  Ins.  Co.  408,  532 

Dresser  v.  Ainsworth  '  58 

Dresser  Man.  Co.  v.  Waterson  46 

Drew  V.  Long  11 

V.  Power  255 

Driggs  V.  Albany  Ins.  Co.  495 

Drinkwater  v.  Corp  of  London  Ass. 

Co.  528 

V.  Goodwin  139,  152,  161 

V.  Tebbetts  118 

V.  The  Brig  Spartan  345 

Drummond  r.  Wood  144 

Drury  v.  Vannevar  235 

Dry  V.  Boswell  168,  386 

V.  Davy  185 

Dryden  f.  Frost  1.50 

Dry  Dock  Bank  v.  Life  Ins.  and  Trust 

Co.  259,  268 

Dublin  V.  Wicklow  R.  R.  Co.  6 

Dubois  I'.  Delaware  and  Hudson  Canal 

Co.  30,  32 

ex  parte  287 

Dubose  V.  Whedon  *  7 

Duckett  V.  Williams  559 

Dudley  v.  Smith  206 

Duerhagen  v.  U.  S.  Ins.  Co.  '  456 

Dufaur  ?;.  Oxenden  128 

Duff  V.  Bayard  339 

V.  Budd  208,  223,  224 

Duffie  V.  Hayes  357 

Duffield  V.  Creed  234 

Dugan  V.  Gittings  245 

V.  United  States  100 

Duke  of  Norfolk  v.  Worthy  53 

Duly  V.  Perkins  252 


xl 

INDEX   TO    C 

/ 

rage 

Dumas  v.  Jones 

409,  4;}9 

Dniuont  v.  Pope 

104,  111 

Dunbar  v.  Buck 

3.59 

Duncan  v.  Koch 

468, 

470,  471 

V.  Lowndes 

176 

V.  Maryland  Savir 

gs  Institu- 

tion 

25.5,  264 

V.  Sun  Fire  Ins. 

Co. 

422,  497, 
.502 

V.  Tindal 

329 

V.  Topham 

20,  404 

Duncuft  V.  Albreclit 

7.7 

Dundas  v.  Dundas 

319 

Dunham  v.  Com.  Ins.  Co. 

372 

482,  484 

V.  Dodge 

241 

V.  Gould 

268 

V.  Murdock 

186 

V.  Rogers 

168 

Dunklee  v.  Fales 

295 

Dunlop  V.  Higgins 

19,  20,  404 

Dunn  i\  Sparks 

293 

Dunnel  v.  Mason 

159 

Dunnett  v.  Tomhagen 

391 

Dunning  v.  Chambcrlin 

247 

Dupeyrc  v.  The  Western 

IMar. 

and 

Fire  Ins.  Co. 

441 

Dupin  V.  Mut.  Ins.  Co. 

528 

Dupleix  V.  De  Roven 

323 

Dupre  ^..Thompson 

16 

Durand  v.  Tliouron 

514 

Durham  ?'.  Wadlington 

27 

Dusar  v.  Margatroyd 

381 

V.  Perit 

154 

Dusenbury  v.  Ellis 

147,  148 

Dutton  V.  Hutchinson 

244 

V.  Soloraonson 

48 

V.  Tildcn 

23 

Duvall  V.  Farmers'  Bank 

255 

Dwight  If.  Brewster 

199 

201,  226 

Dwyer  v.  Edie 

549 

Dyer  v.  Burnham 

146 

V.  Clark 

172,  173 

V.  Hunt 

318 

Dyson  v.  Rowcroft 

421 

CASES   CITED. 


East  V.  Smith 

East  India  Co.  v.  Ilcnslcy 
V.  Prince 
V.  Sands 

Eastman  v.  Wrigbt 

Eastwood  I'.  Keiiyon 

Eaton  V.  Bell 

V.  McKown 

Eckford  v.  Wood 

Edelcn  v.  Gough 

EdgcU  V.  Stanford 

Edgerly  v.  Shaw 

Edick  V.  Crim 

Edie  V.  The  East  India  Co. 

Edis  r.  Bury 

Edmond  v.  Caldwell 

Edmonson  v.  Davis 

Eilson  V.  Fuller 


E. 


Eager  v.  Atlas  Ins.  Co. 

485 

V.  The  Commonwealth 

246 

Eagle  V.  White 

207,  208 

Eagle  Bank  v.  Chapin 

115 

Eaglechilde's  case 

3 

Eaglcson  v.  Shot  well 

2.59 

Eames,  ex  parte 

275 

Earbee  v.  Wolfe 

101 

Earl  V.  Shaw 

454 

Earl  of  Salisbury  v.  Newton 

10 

Earle,  ex  parte 

292 

V.  Harris 

424 

V.  Reed 

7,  234 

i\  Rowcroft 

448 

East  Haddam  Bank  v.  Scovil 

144 

101 


P.ige 
112 
147 
232 
415 
183 

25 

265 

101,  127 

374 

77 

256 

5 

58 
,  120,  122 

89 
162 
180 
129 


Edwards  v.  Baltimore  Fire  Ins.  Co 

535,  536 
V.  Barron  560 

V.  Brewer  60 

V.  Burt  ■  27 

V.  Childs  389 

ex  parte  284,  297 

V.  Golding  148 

V.  Goldsmith  24 

I'.  Hodding  151 

V.  Perpetual  Ins.  Co.  of  St. 

Louis 
V.  Ronald 
V.  Sherratt 
V.  Skirving 
•     V.  The  Ship  Susan 
V.  Todd 
Eeles,  in  re 
Egan  V.  Mut.  Ins.  Co.  497,  512,  521 

Egberts  v.  Wood  175 

Egg  V.  Barnett 
Egleston  v.  Knickerbocker 
Ehle  V.  Judson 
Ehringliaus  v.  Ford 
Eicke  V.  Nokes 
Elder,  ex  parte 

V.  Warfield 
Eldridge  v.  Rowe 
Elford  V.  Zeed 
Elgie  V.  Webster 
Eliason  v.  Henshaw 
Elkin  i\  Moore 
Elkinton  v.  Fennimore 
Elkins  V.  Boston  and  Me.  R.  R.  Co 
EUery  v.  N.  Eng.  Ins.  Co. 
Elliot  t'.  Collier 
Elliott  V.  Cooper 

V.  Giese  66,  77 

V.  Minot  252 

V.  Pybus  48 

V.  Swartwout  151 

V.  Thomas  44,  53,  76 

Ellis  V.  Com.  Bank  of  Xatchcs   106,  110 

ex  parte  289 

V.  Hunt  62 


438 
315 
205 
258 
389 
356 
285 


92 

23 

98 

2.59 

237 

289 

73 

29 

108 

182 

14 

2.52 

85 

149 

440 

11 


INDEX   TO    CASES    CITED. 


Xli 


Pago 


Ellis  V.  James 

2 

V.  Turner 

222 

473 

V.  Warncs 

258 

Ellison  V.  Chapman 

182 

I'.  CoUino-ridge 

86 

Ellmaker  y.  Franklin  Fire  Ins.  Co 

.  49.J 

,537 

Elsec  V.  GatwarcT 

158 

Elting  V.  BrinkerhofF 

104 

V.  Vanderlyn 

27 

Elton  V.  Larkins 

433 

e.r  parte 

187 

Elwell  V.  Shaw 

145 

Ely  V.  Hallctt 

433 

V.  Feck 

387 

Emanuel  v.  Bird 

187 

Emerson  v.  Harmon 

175 

V.  Jlovvland               389 

394 

396 

V.  Knovver 

176 

V.  Frovidence  Manuf.  Co. 

155 

Emery  v.  Day 

247 

i\  Horsey 

360 

Emly  V.  Lye 

126 

179 

Emma  Briggs,  ex  parte 

168 

Emmcrson  v.  Heelis 

54 

Emory  v.  Greenough 

315 

England  v.  Curling 

166 

Ensign  v.  Wands 

166 

Ereskine  i\  Murray 

88 

Erie  Bank  v.  Gibson 

69 

Erskine  v.  Thames 

208 

Escopiniche  v.  Stewart 

351 

Esdaile  v.  La  Mauze 

142 

V.  Sowerby 

119 

Esterly  v.  Cole 

251, 

252 

Estisy.  Ilawlins 

247 

Estwick  V.  Cailland 

276 

Ethcridge  v.  Binney 

175 

iEtna  Fire  Ins.  Co.  i'.  Tyler 

414 

Eubank  v.  Peak 

6 

Evans  v.  Drummond 

194 

V.  Evans 

147 

171 

V.  Forster 

362, 

363 

V.  Hutton 

366 

V.  Kymer 

101 

V.  Mann 

301 

V.  Meglcy 

255 

V.  Montgomery 

316 

V.  Root 

1.54 

163 

V.  Soule 

222 

V.  Tweedey 

237 

V.  Underwood 

86 

V.  Whyle 

67 

Everard  v.  Watson 

112 

Everett  i-.  Desborough 

559, 

560 

V.  Saltus 

46 

Everit  v.  Strong 

177 

Evcritt  V.  Chapman 

164 

Everson  v.  Carpenter 

5 

Everth  v.  Smith 

444 

Evertson  v.  Tappen 

269 

Ewart  V.  Street 

214 

Ewer  V.  Washington  Ins.  Co. 

495 

Ewing  V.  Tees 

136 

d* 

Page 

E.xall  V.  Patridge  38 

Exeter  Bank  v.  Rogers  68 

V.  Sullivan  180,  241 

Ex'r  of  Skipvvith  y.  Cunningham  276 

Eyre  v.  Bartrop  67 

ex  parte  29 

V.  Glover  410 

V.  Marine  Ins.  Co.  461 


F. 


Fabens  v.  Mercantile  Bank  144. 

Fairchild  v.  Slocum  217 

Fairlee,  ex  parte  291 

Fairlie  v.  Christie  406 

V.  Hastings  152 

Fah-thorne  v.  Weston  182 

Faith  V.  East  India  Co.  360,  361 

Falkland  v-.  Cheney  177 

Fallowes  v.  Taylor  26 

Falls  V.  Gaither  14,  20 

Fanning  v.  Consequa  95,  321,  322 

V.  Dunham  268 

Farira  v.  Home  45,  76 

Faris  v.  King  257 

Farmer  i\  Davies  100 

V.  Francis  32 

r.  Lcgg  415 

V.  Sewall  266 

Farmers'  Ins.  Co.  v.  Snyder  434,  470,  497 
Farmers'  &  Mechanics'  Bank  v.  Cham- 
plain  Transportation  Co.  209,  211,  216, 
218,  222,  223 
Farmers'  &  Mechanics'  Bank  v.  Plant- 
ers' Bank  244 
Farmers'  &  Mechanics'  Bank  v.  Kerch- 

eval  67 

Farmers'  &  Mechanics'  Bank  v.  The 

Troy  City  Bank  140 

&  Mechanics'  Bank  v.  AVilson 

242 
&  Merchants'  Bank  v.  Batte    1 14 
Farmin  v.  Anderson  247 

Farnsworth  v.  Garrard  53 

Farnum  v.  Perry  42 

Farquhar,  ex  parte  282 

Farr  v.  Pcarce  191 

V.  Sumner  8 

Farrah  v.  Beswick  165 

Farral  v.  McClca  385 

Farrar  v.  Adams  215 

Farrow  v.  Turner  38 

Fash  V.  Ross  147 

Faulkner  v.  Wright  215 

Favenc  v.  Bennett  161 

Favor  v.  Philbrick  207 

Fawcett  v.  Whitehouse  184 

Fay  V.  Noble  178 

Peaks,  in  re  280 

Feathers  tonhaugh  v,  Fenwick       169,  171, 

184,  191 
Feeter  u.  Heath  147 


xlii 


INDEX   TO    CASES    CITED. 


Page 

Fciglcy  r.  Sponcbevgcr  177 

Feisc  V.  Agiiiliu-  409 

V.  Parkinson  432 

V.  Wray  60 

Felichy  v.  Hamilton  164 

Felker  i'.  Emerson  12,  137 

Fenly  v.  Stewart  149 

Fenn  v.  Harrison             125,  142,  146,  147 

Fenno  v.  Sayre  257 

Fenton  v.  Clark  36,  162 

V.  Emblers  75,  248 

V.  Folger  1 1 0 

V.  White  7 

Fentum  v.  Pocock  97,  291 

Fcnwick  v.  Robinson  484 

Fereday  v.  Hordern  264 

Ferguson  v.  Carrington  56 

Ferrara  v.  The  Talent  391 

Ferrall  v.  Shaen  256 

Ferris  v.  Paris  157 

Ferry  v.  Ferry  268 

Ferson  v.  Monroe  186 

Fettvplace  v.  Dutch  295 

Fidgeon  v.  Sharpe  281,  283 

Field  V.  Holland  83 

Fielder  v.  Hanger  1 1 

Filbery  v.  Lawford  291 

Filley  17.  Phelps  188 

Filleganv.  Laverty  1 92 

Filson  V.  Himes  34 

Finch  V.  Stacy  164 

Findon,  ex  parte  292 

Finney  v.  Bedford  Com.  Ins.  Co.  491 

V.  Fairhaven  Ins.  Co.  436 

Firemens'  Ins.  Co.  v.  Fitzhugh  481 

V.  Lawrence  434,  458 

First  Parish  in  Sutton  v.  Cole  146 

Firth  V.  Thrush  115,  119 

Fish  V.  Chapman            200,  213,  214,  220, 

222 

Fisher  v.  Clisbee  202 

V.  Currier  309 

V.  Lacky  316 

V.  May  27 

V.  Taylor  179 

V.  Willing  339,  381 

Fisk  V.  Com.  Ins.  Co.  484 

V.  Masterman  420,  436 

V.  Newton  207 

Fiske  v.  Foster  315 

V.  N.  Eng.  Mar.  Ins.  Co.  433 

Fitch  V.  Hamlin  201 

V.  Jones  97 

V.  Newberry      .  2 

V.  Stamps  178 

V.  Sutton  336 

Fitchburne  v.  White  224 

Fitchton  v.  Boyer  177 

Fitts  V.  Hall  8 

Fitzhcrbert  v.  Mather      149,  152,  430,  431 

Fitzsimmons  i'.  Joslin  138,  143,  152 

Flanders  v.  Crohn  73 

Flanigeu  v.  Washington  Ins.  Co.  399 


Page 
Fleckncr  v.  United  States  Bank    137,  139, 

257,  265 

Flcetor  v.  Heath  147 

Fleming  v.  Brook  90 

V.  M'Clure  115 

?•.  Smith  0  403,  470 

Flemming  v.  Marine  Ins.  Co.  441 

Flemvng  v.  Hector  137,  164 

Fletcher  v.  Braddick  360 

V.  Commonwealth  Ins.  Co.     507, 

511,  512,  522,  525 

V.  Grover  39 

V.  Howard  52 

?;.  Manning  92 

V.  Morey  300 

Flight  V.  P>ooth  53 

V.  Maclean  125 

Flint  U.Day  121 

V.  Flemyng  344,  419,  439 

V.  Ohio  Ins.  Co.  493 

V.  Rogers  108 

Flook  V.  Jones  281 

Floyer  v.  Edwards  256,  260 

V.  Sherard  27,  263 

Foard  v.  Womack  91,  106 

Fobes  V.  Cantfield  269 

Foden  v.  Sharp  322 

Fogg  V.  Sawyer  90 

Fonda  v.  Van  Home  4 

Foley  I?.  Robards  171,179 

Folger  V.  Chase  139 

Fontaine  v.  Beers  329,  330 

V.  Col.  Ins.  Co.        378,  380,  412 

V.  Phcenix  Ins.  Co.  377,  466, 470 

Footi'.  Sabin  176 

V.  Storrs  197 

Foote  V.  Storrs  203 

Forbes  v.  Aspinwall         410,  418,  419,  438 

V.  Manufacturers  Ins.  Co.  467,  473 

244 

16 

246 

15 

5,7 

261 

137, 141,  144 

406 

26,  147 

77 

292 

434 

555 

2 

213, 214 

137 

198 

295 

179 

244 

416 

291 

75 

•       287 


V.  Skelton 
Ford  I'.  Aikin 

V.  Babco(ik 
V.  Beck 
V.  Phillips 
Forrest  v.  Elwes 
Forrestier  v.  Bordman 
Forshaw  v.  Chabert 
Forster  v.  Fuller 

V.  Hale 

V.  Wilson 
Fort  V.  Lee 
Fortescue  v.  Barnett 
Forth  V.  Simpson 
Forward  v.  Pittard 
Foster  v.  Bates    >. 

V.  Essex  Bank 

ex  parte 

V.  Hall 

V.  Hodgson 

V.  Hoyt 

in  re 

V.  McO'Blenis 

V.  llemick 


INDEX   TO   CASES   CITED. 


Ixiii 


Foster  v.  Swasey 

V.  United  States  Ins 

Co. 

337 

Page 
152 
405, 

435 

,  514 

Fountain  v.  Grymes 

263 

Fox  V.  Adams 

311 

V.  Clifton 

167 

,  170 

,  178 

V.  Fisk 

244 

V.  Frith 

98 

V.  Hanbury 
V.  McGregor 

188 
21 

Fowle  V.  Harrington 

192 

Fowler  v.  JEtna,  Fire  Ins. 

Co. 

406, 

490, 
529 

V.  Down 

298 

V.  Hendon 

114 

V.  Hunt 

246 

V.  Ludwig 

82 

Fowles  V.  The  Great  Wcste 

rnR 

ailway 

Co. 

218 

Foy  1-.  Bell 

Francis  v.  Ocean  Ins.  Co. 

435 

Frankfort  Bank  i'.  Johnson 

139 

,  140 

Franklin  v.  Hosier 

401 

V.  Miller 

31 

Franklin  Fire  Ins.  Co.  v.  D 

rake 

495 

,  511 

V.  Findlay 

415 

r.  Hamill 

491 

,  538 

V.  Hewitt 

407 

Franklyn  v.  Lamond 

147 

Franks,  ex  parte 

285 

Frazcr  v.  Hilliard 

42 

V.  Marsh 

360 

Frazier  v.  Thompson 

34 

Fragano  v.  Long 
Freake  v.  Cranefeldt 

48 
237 

Frear  v.  Hardenburgh 

29 

Free  v.  Hakins 

124 

Freeland  v.  Glover 

432 

Freeman  v.  Birch 

197 

V.  Boynton 

105 

V.  Brittice 

267 

V.  East  India  Co. 

380 

French  v.  Andrade 

191 

V.  Backhouse 

337 

405 

V.  Chase 

187 

V.  Grindle 

266, 

267 

V.  Hope  Ins.  Co. 

413 

V.  Price 

149, 

334 

337 

Frentress  v.  Markle 

193 

Fridge  v.  The  State 

4 

Friedlander  v.  Lon.  Ass.  Co 

494 

Friend  v.  Woods 

213, 

215 

Friere  v.  Woodhouse 

433 

Frink  v.  Branch 

174 

Frisbie  v.  Larned 

82 

Frith  V.  Barker 

355 

Fromont  v.  Coupland 

181, 

217 

Frontier  Bank  v.  Morse 

90 

Frost  V.  Bengough 

232, 

236 

V.  Brisbin 

323 

V.  Lowry 

V.  Saratoga  Mut.  Ins. 

Co. 

55 
520 

Frothingham  v.  Everton 

161 

Pa  are 

Frothingham  r.  Prince  391,  472 

Fry  I'.  Hill  103 

V.  Kousseau  87 

Frye  v.  Barker  241 

Fryer  v.  IJoe  248 

Fuller  );.  Bcnett  150 

0.  Boston  Mut.  Fire  Ins.  Co.      530 

V.  Brown.  36,  162 

V.  Crittenden  23 

ex  parte  304 

V.  Kennebec  M.  Ins.  Co.  464 

V.  The  Naugatuck  R.  R.  Co.       219 

V.  Wilson  152 

FviUer's  case  263 

Fulton  Bank  r.  New  York  &  Sharon 

Canal  Co.  150 

Furber  v.  Carter  167 

Furman  r.  Haskins  102,  107 

Furze  v.  Sharwood  112 

Fussil  V.  Brookes  257 


G. 

Gahn  v.  Broome  412 

Gaillard  v.  Le  Seigneur  257 

Gainsford  v.  Grammar  232 

Gairdner  v.  Scnhouse  457 

Gaither  v.  F.  &  M.  Bank  230 

Gale  V.  Burnell  42 

V.  Capern  242 

V.  Eastman  262 

V.  Halfknight  285 

V.  Laurie  332 

f.  Leckie  182 

I'.  Tappan  143 

V.  Walsh  110 

Gall  V.  Comber  159 

Gallagher  v.  Waring  58 

Gallini  v.  Laborie  415 

Galloway  v.  Morris  389,  416 

Gallway  w.  Mathew  177 

Gait  ?'.  "Galloway  143 

Galway  v.  Mathew  166 

V.  Matthews  167 

Gamble  v.  Grimes  34 

Gambril  v.  Rose  257 

Gammell  v.  Skinner 

Gammon  i'.  Schmoll  109,  131 

Gannett  v.  Cunningham  192 

Gansevoort  v.  Williams  180 

Garbett  v.  Veale  189 

Garbutt  V.  Watson  78 

Gardiner  v.  Childs  179 

V.  Davis  16J^ 

V.  Hopkins  73 

V.  Smith  418,  465,  472,  473 

Gardner  v.  Allen  148 

V.  Baillie  142 

ex  parte  289 

V.  Flagg  256 

V.  Gardner  136 

v.  Howland  50,331 


Ixiv 


INDEX   TO   CASES   CITED. 


Page 
Gardner  v.  Joy  78 

V.  M'Cutcheon  162 

V.  M'A[alioii  236 

V.  Kowc  302 

V.  Salvador  472 

V.  The  Sliip  New  Jersey         391 
Garfortli  v.  Bradley  10,  11 

Garland,  fa; /wrte  170 

Garfortli  v.  Bradley  10 

Garnctt  v.  Willan  223,  224 

V.  Woodcock  108 

Garrard  v.  Cottrell  93 

Garret  v.  Foot  256 

Garrett  v.  Handley  148,  185 

Gani-^ucs  v.  Coxe  425,  444 

Garside  v.  The  Trent  &  Mersey  Navi- 
gation Co.  203, 217 
Gates  V.  Madison  Co.  Mut.  Ins.  Co.    497, 
503,  520,  522,  523,  524,  527 


Gaunt  V.  Hill 

66 

Gatlitt"  ('.  Bourne 

210 

Gausseu  v.  Morton 

143 

Gay  V.  Lander 

120 

125 

Geach  v.  Ingall 

557 

Geary  v.  Physic 

87 

Gecr  V.  Archer 

.  98 

,235 

Geill  V.  Jeremy 

1 

115 

Cellar,  ex  parte 

174 

Gem,  ex  parte 

284 

Gen.  Mut.  Ins.  Co. 

V.  Ku 

ggles 

376, 

431, 
442 

Gen.  M.  Ins.  Co.  v. 

Sherwood 

445 

George  v.  Clagett 

148, 

185 

V.  Harris 

33 

V.  Skeates 

402 

V.  Surrey 

88 

Geortncr  v.  The  Tr 

astees 

of  Canajo- 

harie 

190 

191 

Gerbier  v.  Emery 

141 

Getehell  v.  Heald 

241 

Gibbens  v.  Buisson 

362 

V.  Phillips 

281 

Gibbon  v.  Coggon 

111 

V.  Mcndez 

361 

V.  Boynton 

224 

Gibbons  v.  (Jgden 

398 

Gibbs  V.  Bryant 

252 

V.  Cannon 

70, 

119 

V.  Chisolm 

268 

Gibson  v.  Colt 

142 

V.  Cooke 

554 

V.  Bell 

292 

V.  Culver 

207, 

209 

V.  Hurst 

199 

V.  King 

284 

V.  Luptoa 

164, 

178 

V.  Minet 

15, 

88,  89 

130 

V.  Moore 

181 

V.  Overbury 

555 

V.  Phil.  Ins. 

Co. 

412 

V.  Stearns 

255 

V.  Stephens 

50 

V.  Stevens 

189 

Page 

Gilbert  v,  Dennis  105,  1 12 

V.  North  Am.  Fire  Ins.  Co.        535 

Giles  V.  Cynthia  389,  390 

V.  Eagle  Ins.  Co.  482 

Gilfert  v.  llallet  473 

Gilkyson  v.  Larne  236 

Gill  V.  Cubitt  123 

f.  Kuhn  166 

Gillan  r.  Simpkin  354 

Gillespie  v.  Cresswell  249 

V.  Hamilton  170 

V.  Hannahan  104 

Gillett,  ex  parte  302 

V.  Hill  48 

Gillighan  v.  Boardman  77 

Gillingham  v.  Gillingham  242 

Gillis  y.  Bailey  155 

Gillispy  V.  Coutts  332 

Gilman  v.  Cutts  246 

Gilmore  V.  Black  164 

V.  Carman  214 

Gilpin  w.  Enderby  168,264 

V.  Temple                      ,  167 

Gilpins  V.  Consequa  36 

Girard  v.  Taggart  148 

V.  The  Wave  390 

Girarday  v.  Richardson  99 

Gladstone  i;.  King  431,434 

Glasgow  v.  Pratt  112 

Glasscott  u.  Day  81 

Glassford  v.  Laing  255 

Glassington  v.  Thwaites  184 

Gleason  v.  Dodd  143 

Glen  V.  Lewis  502 
Glcndale  Manuf.  Co.  v.  Protection 

Ins.  Co.  422,  520 

Glenn  v.  McCulIough  232 

Glover  v.  Austin  333,  334 

V.  Dufour  356 

Goddard  v.  Cox  83 

V.  Hodges  183 

V.Pratt  166 

Godfrey  v.  Furzo  302 

V.  Saunders  146 

Godia  V.  London  Ass.  Co.  421 

Godon  V.  Buchanan  202 

Godsall  V.  Boldero  550 

V.  Webb  .         553 

Goff  y.  Clinkard  197 

V.  Rehoboth  81,  252 

Goggerley  ?;.  Cuthbert  101 

Goix  V.  Knox  451 

Golden  v.  Manning  207 

Golder  v.  Ogdcn  48 

Goldschmidt !;.  Whitmorc  449 

Goldthwaite  v.  M'Whorter  160 

Gompertz  v.  Bartlett  126 

I'.  Denton  58 

Gonzales  v.  Sladcn  162 

Goodale  v.  Wheeler  136 
Goodall  V.  New  Eng.  Mut.  Fire  Ins. 

Co.  512,517 
Goodburn  v.  Stevens               170, 173,  191 


INDEX   TO    CASES    CITED. 


Ixv 


Page 

rage 

Goode  V.  Harrison 

y  7 

Grant  v.  Ellicott 

291 

V.  L!Ulp;lcy 

48 

V.  Howard  Ins.  Co. 

504 

506 

522 

Goodenow  i\  Tyler 

141 

160 

In  re 

303 

304 

Goodhue  v.  Butman 

53 

z;.King 

454 

Goodman,  ex  parte 

294 

V.  M'Lachlin 

333 

V.  Harvey 

123 

151 

V.  Norway             345 

346 

347 

376 

V.  Whitcomb 

171 

V.  Vaughan 

47,89 

122 

Goodridfie  i?.  lloss 

5 

V.  "Wood 

353 

(Toodsell  V.  Myers 

5 

Gratz  V.  Bayard 

170 

Goodspccd  V.  East  Haddam 

Bank 

140 

G 

•aves  V.  Ashlin 

46 

Goodtitle  v.  North 

290 

309 

V.  Dash 

94 

Goodwin  v.  Jones 

311 

V.  Harwood 

23 

Goodyear  ;;.  Watson 

66 

V.  Sawcer 

335 

Gooki  V.  Shaw 

441 

V.  The  Marine  Ins. 

Co. 

458 

460 

V.  United  Ins.  Co. 

423 

V.  Weeks 

247 

Goostrey  v.  Mead 

111 

et  al.  V.  Boston  Mar 

Ins. 

Co. 

406, 

Gordon  V  Am.  Ins.  Co.  of  N 

.  Y. 

418 

495 

V.  Bowne 

464 

Gi 

•ay  V.  Belden 

255 

V.  Buchanan 

145 

V.  Chiswell 

192 

V.  Bulkeley 

136 

V.  Clark 

15 

i\  Freeman 

193 

V.  Cox 

59 

V.  Hutchinson     196, 

197, 

199 

200 

V.  Donahoc 

87 

t'.  Mass.  F.  &  M.  Ins 

.Co 

377, 

V.  Fowler 

256 

408 

464 

468 

V.  Handkinson 

26 

r.  Eimmington 

446 

526 

V.  Mendez 

245 

Gore  V.  Buzzard 

134 

V.  Munroe 

316 

•        V.  Gibson 

286 

V.  Wain          368,  373 

477 

481 

483 

Gorgier  v.  Mieville 

122 

G 

•ay's  Ex'rs  v.  Brown 

261 

Goshen  Turnpike  Co.  i\  Hurtin 

97 

Gre.at  Northcim  R.  R.  Co.  v. 

Shepherd 

226 

Goss  V.  Lord  Nug'ent 

406 

G 

•eeley  v.  Bartlett 

140 

160 

i\  Nelson 

86 

V.  Waterhouse 

340 

Gould  V.  Armstrong 

28 

V.  Wyeth 

184 

V.  Gould 

165 

G 

^egory  v.  Walcup 

132 

V.  Hill 

220 

221 

G 

•eignier,  ex  parte 

297 

V.  Oliver 

371, 

480 

Green  v.  Barrett 

171 

V.  Rich 

144 

V.  Bicknell 

291 

V.  Thacher 

401, 

402 

V.  Biddlc 

315 

V.  Stanton 

335 

V.  Brown 

445 

464 

Goudy  V.  Gebhart 

16 

V.  Davics 

88 

V.  Gilman 

241 

V.  Deakin 

180 

Goupy  r.  Harden 

104, 

124 

161 

V.  Elmslie 

453 

Gourdine  v.  Graham 

247 

V.  Goings 

109 

Governor  v.  Gordon 

248 

V.  Jackson 

101 

&c.  of  Cop.  Min.  V 

Fox 

32 

V.  Kemp 

259 

Gowan  v.  Jeffries 

171 

V.  Merchants  Ins.  Co 

433 

V.  Capper 

32 

V.  Miller 

146 

V.  Emery 

155 

V.  N.  R.  Co. 

156 

V.  Moore 

105 

V.  Rivett 

233 

Grace  v.  Smith 

168 

V.  Sperry 

137 

Gracie  v.  Nev/  York  Ins.  Co. 

414 

443 

463 

V.  Tanner 

149 

Graeff  I'.  Hitehraan 

179 

V.  Thomas 

26 

Graham  v.  Chapman 

283 

IK  Young 

450 

V.  Com.  Ins.  Co. 

454 

G 

Tene  v.  Bateman 

14 

V.  Musson 

136 

11.  Mowry 

311 

V.  O'Neil 

66,  73 

Greenhow  v.  Harris 

259 

Gram  v.  Seton 

176 

Greenleafi'.  Quincy 

241 

Granby  ?i.  Amherst 

323 

G 

■eening,  ex  parte 

100 

Grand  Bank  v.  Blanchard 

114 

G 

-eenslade  v.  Dower 

175 

Granger,  ex  parte 

289 

G 

•eenway  v.  Hindley 

111 

I'.  George 

248 

Greenwood  v.  Brodhcad 

186 

V.  How.  Ins.  Co. 

531 

G 

•ey,  ex  parte 

277 

Grant  v.  Baily 

385 

G 

•idley  v.  Dole 

182 

V.  Da  Costa 

98 

Griffith  V.  BuH'um 

166 

179 

Ixvi 


INDEX   TO    CASES    CITED. 


Griffith  V.  Grimth 

V.  Ins.  Co.  of  N.  A. 

V.  Young 
Grigsby  v.  Nance 
Griggs  I'.  Austin 
Grim  1'.  riucnix  Ins.  Co. 
Grinisiiaw  v.  Bender 
Grind  ley  v.  Earlier 
Grissell  ?;.  llol)inson 
Griswold  V.  N.  y.  Ins.  Co. 
V.  Pratt 
r.  Waddington 
Gromc,  ex  parle 
Groning  v.  Mcndham 
Groom  v.  West 
Grosvcnor  v.  Gold 
Lloyd 


Puc:o 
150 
423 

72 

182 

351,  354,  .356 

.527 

94 
14G 

38 

350,  354,  474 

275 

171 

289 

53 
292 
295 
172 


V.  The  Flax  &  Hemp  Manuf. 


Co. 

Groton  r.  Dallhelm 
Grove  v.  Dubois 
Grover  i'.  Wakeman 
Groves  v.  Graves 
Grozier  v.  Alwood 
Grugeon  v.  Smith 
Grysill  v.  Whiehcott 
Gucrlain  v.  Col.  Ins.  Co. 
Guidon  v.  Ilobson 
GuUett  V.  Lamhcrton 
Gulliver  v.  Drinkwater 
Gurney  v.  Wormesley 
Guthrie  v.  Armstong 
Gwinn  v.  Whitaker 
Gwyne,  ex  parle 


H. 


254,  2G0 
105 
139,  159,  IGl 
277 
256 
386 
112 
265 

406,467 
167 
9 
309 
126 
146 
252 
63,  263,  415 


Haas  V.  Flint 

264 

Hackley  v.  Spraguc 

257 

Hadley  v.  Clarke                     208 

,  365 

366 

Hagedom  v.  Oliverson 

436 

Hahn  v.  Corbett 

453 

Haigh  V.  Brooks 

27 

Haine  v.  Tcrrant 

7 

Haines  v.  Busk 

162 

Hainess  v.  Corliss 

11 

Hakes  v.  Hotchkiss 

21 

Haldeman  ii.  Michael 

281 

Halford  v.  Kymer 

549 

Hale  V.  Gerrish 

5 

r.  Mercantile  Ins.  Co. 

457 

V.  N.  J.  Steam  Navigation 

Co. 

214 

V.  Smurll 

284 

V.  Woods 

145 

Hal  id  ay,  ex  parte 

297 

Hall  V.  Ashurst 

70 

V.  Boardman 

312 

V.  Conn.  River  Steamboat  Co. 

219 

V.  Cushing 

301 

V.  Daggett 

263 

V.  Dysoa 

34 

Hall,  ex  parte 

V.  Franklin  Ins.  Co. 

V.  Fuller 

V.  Leigh 

V.  ]\Iollineaux 

V.  Ocean  Ins.  Co.     332, 

V.  Newcorab 

r.  Pccke 

V.  Reed 

V.  Robinson 
Hallet  V.  Co\.  Ins.  Co. 
Halliday  v.  Ward 
Halifax  v.  Lyle 
Hallowell  i-.'Saco 
Hahvcrson  v.  Cole 
Halsey  v.  Whitman 
V.  Whitney 
Hamilton  v.  Cunningham 

V.  Lycoming  Mut. 

V.  Mendes       463, 
V.  Seaman 
V.  Summers 
V.  Terry 
V.  Warfiekl 
Hammat  v.  Emerson 
Hammatt  v.  Emerson 
Hammett  v.  Yea 
Hammond  v.  Allen 

V.  Anderson* 
V.  Douglas 
ex  parte 
V.  Hopping 
V.  Reid 
V.  Smith 
V.  Toulman 
Ilamond  v.  Holiday 
Hamper,  ex  parle 
Hampton  v.  Brig  Thaddeus 
Hamson  v.  Harrison 
Hancock  v.  Entwisle 

V.  Fishing  Ins.  Co. 
V.  Hodgson 
Hand  v.  Baynes 
Hands  v.  Slancy 
Hanford  r.  McNair 
Hankey  v.  Garratt 

V.  Jones 
Hannay  v.  Stewart 
Hanson  v.  Armitage 

ex  parte 
Hansbrough  v.  Baylor 
Hapgood  V.  Batcheller 
Harbach  v.  Elder 
Harbald  ?».  Kuntz 
Hard  v.  Prendergast 
Hardacre  v.  Stewart 
Harden  ;;.  Gordon 
Harding  v.  Foxcraft 
Ilardison,  In  re 
Ilardman  v.  Willcork 
Hardy  v.  Sproule 
Hare  v.  Travis 


Pa^e 

284, 309 

377,467 

92 

164 

437 

438,  466,  480 

120,  121,  122 

157 

16 

47 

360 

242 

129 

323 

348 

277 

177 

160 

Ins.  Co.    20, 

404,  492 

469,  476,  550 

191 

179 

14 

3G1 

37 

254,  263 

414 

44,  76 

191 

284 

257,  261 
461 
257 
289 
162 
168 

370,  480 
284 
289 
416 
255 
208 
7 

136,  138 
192 

284,  285 

1.52 

76 

300 

266 

141, 160 

39 

237 

235 

151 

387,  392,  393 

164,  334 
309 
150 
335 
458 


INDEX   TO    CASES    CITED. 


Ixvii 


Page 

Hargons  v.  Stone 

58 

Hargreaves  v.  Hutchinson 

2G0 

V.  Kothwell 

150 

Harker  v.  Anderson 

91 

Harley  v.  Mihvard 

480 

Harman  v.  Anderson 

45,  76 

V.  Clarke 

362 

V.  Gandolph 

364 

V.  Kingston 

438 

V.  Vanliatton 

413 

Ilarmer  v.  l^ell 

345 

V.  Killing 

5 

Harmony  v.  Bingham 

36 

Harn  v.  Fuller 

97 

Harney  v.  Owen 

8 

Harper  v.  Little 

143 

148 

V.  The  New  Brig 

400 

V.  The  Phoenix  Ins.  Co. 

546 

Harrell  v.  Owens 

208 

Harrington  v.  Snyder 

197 

V.  Stratton 

37 

Harris  v.  Boston 

263 

V.  Costar 

219 

V.  Eagle  Fire  Co. 

530 

V.  FarwcU 

193, 

194 

t'.  Hunthach 

73 

V.  Lindsay 

193 

194 

V.  Ohio  Ins.  Co. 

517 

V.  Packwood                 205 

223 

224 

V.  Eand 

351 

V.  Ranson 

16 

V.  Wall 

5 

Harrison  v.  Armitage 

182 

V.  Clifton 

4 

ex  parte                      238 

284 

291 

V.  Fane 

7 

V.  Luke 

42 

V.  McConkey 

553 

V.  McHenry 

157 

V.  Ruscoe 

113 

116 

V.  Sterry 

175 

311 

Harshman  v.  Lowe 

277 

Hart  i\  Alexander 

193 

V.  Delaware  Ins.  Co. 

419 

439 

v.  Nash 

80 

238 

V.  Prendergast 

234 

V.  Stephen 

10 

V.  Ten  Eyck 

157 

V.  The  Little  John 

390 

V.  The  Western  R.  R.  Co. 

228, 

414, 
535 

V.  Tomlinson 

178 

Hartfield  v.  Roper 

228 

Hartford  v.  Jones 

472 

Hartley  v.  Case 

112 

V.  Wharton 

4,  5 

Hartman  v.  Keystone  Ins.  Co. 

539 

545 

Hartshorn  r.  Slodden 

281 

Harvard  College  v.  Gore 

323 

Harvey  v.  Archbold 

262 

ex  parte 

284 

V.  Richards 

318 

V.  Towers 

97 

Harvey  v.  Turner" 
Hasbrook  v.  Palmer 
Haskell  v.  Adams 
Ilasleham  v.  Young 
Hassell  v.  Long 
Hassels  v.  Simpson 
Hastings  v.  Pepper 

r.  The  Happy  Return 
V.  Wiswall 
Hatch  V.  Taylor 
V.  Trayes 
V.  Searles 
V.  Smith 
Hatchett  v.  Gibson 
Haughton  v.  Ewbank 
V.  Mathews 
Haven  v.  Foster 
V.  Gray 
Havens  v.  Hussy 
Hawcroft  v.  The  Great  Northern 

way  Co. 
Hawkes  v.  Salter 
Hawkins  v.  Appleby 
V.  Cardy 
V.  Cooper 
ex  parte 
V.  Hoffman 
Hawley  v.  Cramer 
Hawtayne  v.  Bourne 
Hawks  V.  Deal 
Haxtun  v.  Bishop 
Hay  V.  Fairlniirn 
V.  Le  Neve 
Haydock  v.  Lynch 
Haydon  v.  Williams 
Hayes  v.  Warren 
Hayman  v.  Molton 
Haynes  v.  Birks 

V.  Stewart 
Hays  V.  Lynn 
V.  Mouille 

V.  Stone  153,  156, 

Hayward  v.  Leonard 

?'.  Middlcton 
Haywood  v.  Rodgers 
Hazard  v.  Hazard 

V.  N.  E.  Mar.  Ins.  Co. 

V.  Smith 
Hazlebaker  v.  Reeves 
Head  v.  Providence  Ins.  Co. 
Heane  v.  Rogers 
Heannj'^  v.  Birch 
Heard  v.  Staratbrd 
Hcarsey  r.  Pruyn 
Heath,  ex  parte 

V.  Franklin  Ins.  Co. 

In  re 

V.  Percival 

V.  Sansom 
Heathcote  v.  Hulme 
Heckschcr  w.  McCrea 
Hedger  v.  Steavenson 


Page 

144 

87 

181,  183 

176 

68 

283 

205,  347 

392,  393 

268 

135 

98 

126 

136 

203 

'l37 

159 

16 

410,  438 
175 

Rail- 

204 

115. 

180 

127 

227 

297 

225,  226 
157 
144 
1 
109 
330 
383 
86,  87 

235, 237 

29 

377 

107,  114 

171 

153 

60 

157, 163 

30 

3.53 

430,  560 
166 

14,  426, 

444,  468 
258 
230 
491 
285 
284 
11 

150,  151 
118 
495 
280 
193 

169, 170 
191 
358 
112 


Ixviii 


INDEX   TO    CASES    CITED. 


Iledley  v.  Baiubridgc 
Hegcinan  v.  Western  R.  R.  Corp 
Helps  V.  Winterbottom 
llelsby  V.  Mcars 
Helyciir  v.  Ilawke 
Hempliill  I'.  Clicnie 
Henchman  r.  OfHey 
Henderson  c.  Barbee 

V.  Barnewall 
V.  Bhmchard 
V.  Hudson 
V.  Western  Mar 
Co. 
Hendricks  v.  Com.  Ins.  Co. 

V.  Judah 
Henn  v.  Walsh 
Hennequin  v.  Sands 
Henry  v.  Lee 

r.  IMeans 
Henshaw  v.  Mar.  Ins.  Co. 
Henson  v.  Blaekwell 
»  ex  parte 

Herbert  v.  Champion 
ex  parte 
V.  Hallett 
Herckenrath  v.  Am.  Mut.  Ins.  Co 
Hern  v.  Nichols 
Hernaman  v.  Bawden 
Herrick  v.  Borst 

V.  Carman 
V.  Kingsley 
Herrin  v.  Butters 
Herring  v.  Mornin 
Hesketh  v.  Blanchard 

V.  Stevens 
Hesse  v.  Stevenson 
Hewett  V.  Buck 
Hewison  v.  Guthrie 
Heydon  v.  Heydon 
Heyliger  v.  N.  Y.  Firemans'  Ins.  Co.  369, 

373,  482 
Heyman  v.  Parish  449 

Hibbert  v.  Carter  408 

V.  Martin  405 

Hibblewhitc  v.  McMorine  55 

Hickley  v.  Farmers'  and  Merchants' 
Bank  276,  277 


Pa^e 
175 
220 
248 
217 

141,  142 
208 
4.'38 
177 

155,  101 
253 
165 
&  Fire  Ins. 

527 
436 
102 
171 
46 
108 
247 
458 

551,  552 
263 
539 

284,  300 
474 
515 


152,  154 

389 

69 

121 


166, 


42 
168 
339 
306 
337,  381 
292 
189 


Hickok  V.  Hickok 

248 

Hickman  v.  Hall 

1 

Hicks  V.  Foster 

176 

V.  Hotchkiss 

316 

V.  The  Duke  of  Beaufort 

119 

Hielycr  v.  Bennett 

8 

Hiern  v.  Mill 

1.50 

Higden  v.  Williamson 

306 

Higgins  V.  Livcrmore 

423 

V.  Packard 

336 

V.  Scott 

250 

V.  Senior 

147, 

148 

149 

Higginson  v.  Dall 

406, 

410 

468 

Highmore  v.  Molloy 

284 

V.  Primrose 

98 

Higlit  V.  Ripley 

78 

P.age 

Higinbotham  v.  Holme  289 

Hill  V.  Bellows  246 

ex  parte  289 

V.  Halford  86 

V.  Humphries  208 

r.  Heap  104,118 

V.  Henry  248 

V.  Hooper  75 

V.  Kendall  237 

V.  Kitching  102 

w.  Lafayette  Ins.  Co.  523 

V.  ]\IcPherson  1 83 

V.  Packard  .         155 

V.  Ititten  438 
Hillier  v.  Alleghany  Co.  Mut.  Ins.  Co. 

447,  526 

Hilliker  w.  Loop  184,  185 

Hills  V.  M'Rae  192 

Hilton  v.  Fairchild  114 

Himely  r.  Stewart  432 

Hindman  v.  Shaw  389 

Hinde  v.  Whitehouse  42,  43,  76,  161 

Hine  r.  Allcly  110 

Hinely  v.  Margaritz  5 

Hinesburgh  v.  Sumner  34 

Hinkley  v.  Fowler  38 

r.  Morcau  96,316 

Hinman  v.  Moulton  27 

Hinsdale  v.  Miles  105 

Hinton  v.  Acraman  291 

Hitchcock  V.  Cokcr                   ►  27 

V.  Humphrey  117 

V.  St.  Johns  175 

Hoadly  v.  M'Lainc  50 

Hoafsmith  v.  Cope  52 

Hoag  r.  Plunt  312 

Hoard  v.  Garner  144 

Hoare  v.  Cazenove  132 

V.  Clement  400 

V.  Dawes  164 

Hobart  v.  Drogan  391 

V.  Norton  458 

Hobby  V.  Dana  504 

Hodgdon  v.  Hodgdon  252 

Hodge  V.  Manley  238,  239 

Hodges  V.  Holeman  295 

V.  Saunders  27 

Hodgson  V.  Blackiston  464 

V.  Davies  80 

ex  parte  289 

V.  Glover  410 

V.  Loy  60 

V.  Shaw  65,  66 

V.  Temple  99 

V.  The  Mar.  Ins.  Co.  of  Alex- 

dria             '  409 

Hodnett  v.  Tatum  138, 152 

Hoffman  v.  Noble  56 

V.  Western  Mar.  &  Fire  Ins. 

Co.  529,  530 

Hogan  V.  Delaware  Ins.  Co.  406,  407 

Hoge  V.  Hogc  27 

Hogg  V.  Horner  458 


INDEX   TO    CASES    CITED. 


xlix 


Page 

Hogg  V.  Snaith 

142 

Hoit  V.  Hodge 

409 

V.  Uiulerhill 

5 

Hoitt  V.  Holcoinb 

16 

Holbrook  v.  Am.  Ins. 

Co. 

408,  518 

532 

V.  Brown 

416 

438 

.  V.  Foss 

293 

V.  Wight 

139 

Holbrow  V.  Wilkins 

117 

Holden  v.  Dakin 

57 

Holderness  v.  Schackcls 

338 

Holdsworth  v.  Wise 

476 

Holfbrd  V.  Blatchford 

263 

266 

V.  Hatch 

298 

Holland  v.  Palmer 

309 

V.  Pelham 

549 

V.  Turner 

105 

Hollis  r.  Morris 

16 

HoUister  v.  Nowlen   205,  219,  222, 223,  224 

Holman  v.  Johnson  318 

Holme  V.  Barry  126 

Holmes  v.  Blogg  8 

V.  Broughton  96 

V.  Cliarlestown  Mut.  Fire  Ins. 

Co.  496,  522,  529 

V.  Higgins  183 

V.  Hutchinson  392 

V.  Kerrison  163,  248 

V.  Misroon  252 

V.  Pavenstedt  360 

V.  Rcmesen  311,312,  318 

V.  Williams  265. 

V.  United  Ins.  Co.  164,  435 

Hoist  V.  Pownal  61 

Holt  V.  Ely  151 

V.  Ward  Clarenieux  9,  33 

Home  V.  Redfearn  86 

Homer  v.  Ashford  26 

V.  Dorr  435 

Homes  v.  Smith              '  107 

Hone  V.  Mutual  Safety  Ins.  Co.     491,  515 

Hooban  v.  Bidwell  42 

Hood  V.  Fahnestock  150 

V.  IManhattan  Fire  Ins.  Co.  488,  495 

V.  New  York  &  New  Haven 

R.R.  Co.  140,218 

Hooe  V.  Groverman  360 

Hooper,  ex  pmte  291 

V.  Hudson  R.  Fire  Ins.  Co.     495 

V.  Lusby  337,  405 

V.  Perley  389,  390 

V.  Stephens  80,  238 

r.  Williams  125 

HoiDC  V.  Booth  291 

V.  Cust  180 

ex  parte  291 

Hopkins  v.  Appleby  53 

V.  Mehaffy  148 

V.  MoUinieux  134 

Hopewell  v.  De  Pinna  548 

Hore  V.  Whitmore  423 

Horford  v.  Wilson  119 

Horn  V.  Bensusan  362 


Page 

Hornby  v.  Lacy  162 

Horncastle  v.  Farran  348 

Horneyer  v.  Lushington  423,  460 

Horsf'all  w.  Fauntleroy  149 

V.  Handly  150 

Horton's  Appeal  170 

Hosea  ?;.  McCrory  216 

Hosford  V.  Nichols  319 

Hoskins  v.  Pickersgill  332 

Ilosmer  v.  Beebe  141,  160 

Hough  V.  Richardson  57,  152 

V.  Warr  68 

Houghton  V.  Eustis  296 

V.  Man.  Mut.  Fire  Ins.  Co.  520, 

522 

V.  Matthews  141 

z;.  Page  262,318 

Hoiilditch  V.  Cauty  112 

House  V.  The  Schooner  Lexington       210 

Housego  V,  Cowne  113,  116 

Houser  v.  Reynolds  5 

Housatonic  and  Lee  Banks  v.  Martin     150 

Houstman  v.  Thornton  445 

Houston  V.  Darling  360 

V.  New  Eng.  Ins.  Co.      434,  456, 

457,  458 

Hovey  v.  American  Mut.  Ins.  Co.     520, 

535 

V.  Blanchard  149 

Hovili;.  Pack       •  138 

Howard  v.  Albany  Ins.  Co  407,  532 

V.  Bailie  142 

V.  Chapman  153 

V.  Ives  115,  144 

V.  Jcmmet  303 

V.  K.  &  L.  M.  Ins.  Co.  316 

V.  Priest  173 

V.  Shepherd  407 

V.  Tucker  347 

Ins.  Co.  of  N.  Y.  V.  Scribner  419, 

420 

Howe  V.  Bowes  105 

V.  O'Mally  32 

V.  Nickels  67 

V.  Palmer  76 

V.  Thompson  242 

Howell  V.  Burnet  246 

V.  Cincinnati  Ins.  Co.  522 

V.  Fountain  162 

V.  Harvey  169,  171 

V.  Young  248 

Howes  V.  Bigelow  1 1 

Howland  v.  Lavinia  356 

Hoxie  ?;.  Carr  173,174 

V.  Lincoln  8 

Hoyle  V.  Stowe  5 

Hoyt  V.  Bridgewater  Co.  264 

V.  Bvrnes  81,  90 

V.  oilman  430, 432 

V.  Wildfire  389,  396 

Hubbard  v.  Coolidge  26 

V.  Cummings  8 

V.  Elmer  152 


INDEX   TO    CASES   CITED. 


Page 

Ilubbard  v.  Glover  431 

V.  Hamilton  Bank  296 

V.  Jackson  127 

V.  Tlic  Cliarlcstown  Branch 

11.  E.  Co.  2.')2 


Huber  v.  Steincr 

9.5,  323 

Hubbersty  r.  AVard 

346,347 

Hubl)le  V.  Perrin 

192 

Huckman  v.  Fernie           12,  130, 

152,  559 

Hucks  V.  Thornton 

414,  427 

Hudson  I'.  Granger 

139,   161 

V.  Harrison        469,  470 

473,476 

V.  Tenny 

252 

Huffman  r.  Hulbert 

69 

Hufjg  V.  Augusta  Ins.  and  Bank 

ng 

Co.                                         349, 

422. 475 

Huggett  V.  Montgomery 

'  400 

Hughes  V.  ElHson 

175 

V.  Union  Ins.  Co.      410 

439,  456 

V.  Wheeler 

82, 256 

Huguenin  v.  Raylcy 

560 

Huling  V.  Craig    . 

36 

Hull  V.  Caldwell 

252 

V.Jeffrey 

276 

V.  Pickersgill 

137 

Hulme  V.  Mugglestone 

292 

Humble  v.  Hunter 

148 

V.  Mitchell 

77 

Humphrey  v.  Arabin 

551,  552 

Humphreys  v.  Blight's  Assignees 

300 

V.  Jones 

237 

V.  Reed 

356 

V.  Union  Ins.  Co. 

373, 482 

Humphries  v.  Chastain 

191 

Humphry  v.  Douglass 

9 

Hunt  V.  Adams 

22 

V.  Bate 

29 

V.  Bridgham 

241 

V.  Chamberlin 

143 

V.  Douglass 

155 

V.  Fish 

114 

V.  Haskell 

351 

V.  Hecht 

76 

V.  Nevers 

253 

V.  Peake 

9,  33 

V.  Roy.  Exch.  Ass.  Co. 

470,  473 

Plunter  v.  Fry 

357,  358 

V.  Jameson 

142 

V.  Leathley 

437 

V.  Miller 

15,  145 

I'.  Parker                     137, 

138,  377 

V.  Potts 

315,  444 

V.  Prinscp 

333 

V.  Wilson 

97 

Huntingdon  v.  Hall 

58 

Huntington  v.  Knox 

148 

Huntley  v.  Sanderson 

249 

Hurd  V.  Brydges 

284 

Hurlbert  v.  The  Pacific  Ins.  Co. 

487 

Hurlburt  v.  Simpson 

42,  43 

Hurry  v.  Hurry 

378 

V.  Royal  Exch.  Ass.  Co. 

460 

V.  The  John  &  Alice 

342 

Page 

Ilnrst  V.  Holding  162 

Ilurtin  V.  The  Phoenix  Ins.  Co.     467,  470 

V.  Union  Ins.  Co.  348,  351 

Hussey  v.  Christie  380,  381 

V.  Jcwett  9 

V.  Thornton  44 

Huston  r.  Cantrill  •         143 

V.  Moorhead  264 

Hutchins  v.  Bank  of  Tcnn.  172 

V.  Gilman  157 

V.  Hudson  172 

V.  Turner  180 

Hutchinson  v.  Bowker  14,  17 

•     V.  Coombs  395,  396 

V.  Gascoigne  284 

V.  Hosmer  263 

V.  Smith  179 

Hutton  V.  Am.  Ins.  Co.  461 

V.  Bragg  360,  449 

Hyde  v.  Paige  149 

V.  Trent  &  Mersey  Navigation 

Co.  207 

V.  Wolf  149 

Hyder  v.  Stone  252 
Hynds  v.  Schenectady  Co.  Mut.  Ins. 

Co.                           "  502,  527 

Hysinger  v.  Baltzelle  246 


'Icard  V.  Gookl  41 6 

Ide  V.  Stanton  77  ■ 

Idle  V.  Royal  Exch.  Ass.  Co.         377,  470 
Illidge  V.  Goodwin  227 

Illinois  Mut.  Fire  Ins.  Co.  v.  O'Neile    491 
Ilsley  V.  Jewett  82 

Imlay  v.  EUefscn  96,  323 

In  Matter  of  Brown  91 

In  re  Creed  548 

7«  re  Ewin  318 

In  re  Smith  186,  188,  189 

In  re  Sty  an  553 

In  re  Warren  165 

In  re  Webb  203 

In  re  Westzinthus  63 

In  re  Wright  494 

In  re  Wright  &,  Sun  Fire  Ins.  Co.  537 

Indianapolis  Ins.  Co.  v.  Brown  256 

Ind.  Mut.  Fire  Ins.  Co.  v.  Coquillard  490, 

5.33 
Ingalls  V.  Lee  266 

IngersoU  r.  Bokkelin  381 

Ingham  v.  Agnew  415 

Inglis  V.  Haigh  243,  244 

V.  Vaux  461 

Ingrahara  i;.  Geyer  311 

V.  Wheeler  "  277,  331 

Ingram  v.  Foster  104 

Ingrate  v.  Christie  201 

[nman  v.  Western  Fire  Ins.  Go.  535 

Innis  V.  The  Steamer  Senator       3S3,  3S4 
Ins.  Co.  V.  Jarvis  452,  490 


INDEX   TO    CASES   CITED. 


Page 

Ins.  Co.  of  N.  A.  V.  Jones  372 

Insurance  Co.  v.  Southard  496,  521,  522 

Ins.  Co.  of  Penn.  v.  Smith  404,  435,  436 

Ins.  Co.  I'.  Updepraff  507,  510 

In  tlie  Matter  of  Sperry's  Estate  188 

Ireland  v.  Kip  105,  114 

V.  Thompson  •           377 

Irving  V.  Manning  462 

r.  IMotly  152 

V.  Richardson  408 

r.  Veitch  248 

.Isler  V.  Baker  171 


Jackson  v.  Baker 

V.  Bossonette 

V.  Bowen 

ilem  Caklvvell  v.  King 

V.  Charnock 

V.  Cornell 

V.  Covert 

ex  parte 

V.  Henry 

V.  Hudson 

V.  Johnson 

V.  Jones 

V.  King 

V.  Mayo 

V.  Mass.  Mut.F.Ins.Co. 

V.  Packard 
V.  Pigott 

V.  Robinson  164 

t'.  Rogers 
V.  Sedgwick 
V.  Stopherd 
V.  Union  Bank 
I'.  Warwick 
V.  Wheat 
Jacky  V.  Butler 
Jacobs  V.  Adams 
Jacomb  v.  Harwood 
James  r.  Bixby 

V.  Catherwood 
ex  parte 
V.  Patten 
V.  Shore 
r.  Stull 
Jamieson  r.  Laurie 
Janes  I'.  Whitbread 
Janney  r.  Cohimbian  Ins.  Co. 
Jan  sen  v.  Heinrich 
Jaques  v.  Marquand 
Jarvis  v.  Brooks 
V.  Rogers 
Jefferies  v.  Austin 
Jeft'urson  v.  Washington 
JetTcrson  Co.  Ins.  Co.  r.  Cotheal 

JcflTery  v.  Wolton 
Jcft'ervs  V.  Gurr 


141 
161 
258 
286 
371 
186,  187 

78 

178 

258 

130 

245 

258 

192 

9 

408,  509, 

517,  533 

258 

131 

168,  334 

204 

166 

181 

144 

97 
246 
189 
253 
192 
336, 378 
318 
299 

77 

54 
316 
364 
164 
334 
387 
179 
188 
151 

97 

324 

496,  504, 

521 

23 

39 


Page 

Jeffrey  v.  Bigelow  142,  152 

Jefts  V.  York  148 

Jencks  v.  Coleman  206 

Jenkins  i;.  Atkins  143 

V.  Blizard  172 

V.  Heycock  429 

V.  Hutchinson  148 

Jenkyns  v.  Usborne  60 

Jenney  v.  Hcrlc  87 

Jennings  v.  Chenango  Co.  Mut.  Ins.  Co. 

422,497,520 

V.  Camp  29 

V.  Estes  167 

V.  Griffiths  339 

V.  Ins.  Co.  of  Penn.  340 

V.  Whitaker  8 

Jenys  v.  Fawler  129 

Jeremy  v.  Goochman  29 

Jerome  v.  Whitney  87 

Jessey  v.  Roy  388 

Jessel  V.  Williamsburgh  Ins.  Co.  407 

Jeune  v.  Ward  4 

Jewett  V.  Warren  50 

Joel  V.  Morrison  227 

Johns  V.  Simons  379 

Johnson  v.  Barber  152 

V.  Blasdale  145,  147 

V.  Broderick  390 

V.  Dodgson  27,  77 

V.  Evans  189 

ex  parte  105 

u. -Foster  38 

V.  Greaves  340 

V.  Harth  106 

V.  Huckins  393 

r.  Hunt  311,333 

U.Johnson  10,39,256 

V.  Jones  135,  138 

V.  Lines  7 

V.  McLane  54 

V.  Miln  358,  359 

V.  O'llara  160 

V.  Ogilby  147 

V.  Phoenix  Ins.  Co.  433 

V.  Shippen  339,  341 

V.  Smith  76 

V.  Stone  225,  227 

V.  The  Midland  Railway  Co.204, 

205 

V.  The  WalterstoriT  387,  388,  389 

V.  Titus  27 

V.  Wingate  137 

Johnston  v.  Cope  57 

V.  Crane  480 

V.  Fcssler  17 

Johnstone  v.  Usborne  146,  155 

Jollett  V.  Depontbieu  310,  311 

Jolly  V.  Baltimore  Eq.  So.  506 

Jones  V.  Ashburnham  28 

V.  Barkley  309 

V.  Boston  Mill  Corp.  27 

V.  Bowden  57 

V.  Brig  Phcenix  398 


Hi 


INDEX    TO    CASES   CITED. 


Page 

Jones  V.  Brooke  93 

V.  Cooper  73 

V.  Downman  147,  148 

ex  parte  2G3 

V.  Farley  153 

v.  Foxall  269 

V.  Hibbert  97,  291 

V.  Hook  322 

V.  Ilowlancl  281 

V.  Ins.  Co.  428 

V.  Ins.  Co.  of  N.  A.              372,  482 

V.  Jones  183 

V.  Lane  127 

z;.  Littlcdall  147,148 

V.  Nicholson  449 

I'.  Noy  171,191 

V.  Robinson  37 

V.  Ryde  126 
V.  The  Wreck  of  the  Massasoit  391 

V.  Voorhees  201,  220,  225 

V.  Ward  269 

V.  Woodbury  31 

V.  Yates  16,  184 
Jones'  Man.  Co.  v.  Man.  Mut.  Fire  Ins. 

Co.  504,  520 

Jordan  v.  Fall  River  R.  R.  Co.               225 

V.  James  63,  139 

V.  Norton  17,  53 

V.  Warren  Ins.  Co.    350,  380,  442, 

474,475 

Joseph  V.  Pebrer  162 

Joslyn  V.  Smith  69,  241 

Jossclyn  v.  Ames  122 

Joy  V.  Campbell  302 

V.  Sears  331 

Judah  I'.  Dyott  157 

V.  Harris  87 

V.  Randal  467,  473 

Judd  V.  Ives  275 

Judge  V.  Wilkins  27 

Judson  V.  Sturges  144 

Juhel  V.  Church  409,  437 

Julian  V.  Schobrookc  129 

Jumel  V.  Mar.  Ins.  Co.  477,  482,  484,  487 

Justin  r.Ballam  400 


K. 


Kain  v.  Old  21 
V.  Comm.  Ins.  Co.  410,  421,  456,  457, 

530 

Karthaus  I'.  Ferrer  176 

Kasson,  in  re  303 

Kay  V.  Allen  67 

Kaye  v.  Brett  153 

Kase  V.  Jolin  58 

Keatc  ('.  Temple  73 

Keates  v.  Kadogan  59 

Keeler  v.  Fireman's  Ins.  Co.  399 

Keene  v.  Boycott  4 

V.  Lizardi  206 

V.  Thompson  90 


Page 

Keir  v.  Andrade 

416 

Keith  V.  Jones 

87 

Kell  V.  Anderson 

362 

Kelley  v.  Greenleaf 

174 

184 

V.  Hurlburt 

167 

V.  Merrill 

381 

V.  Munson 

148 

V.  Sanl)orn 

180 

241 

Kellogg  V.  Denslow 

53 

V.  Ilickok 

268 

Kelly  V.  Cunningham 

383 

384 

V.  Kelly 

181 

V.  Webster 

79 

Kemble  v.  Atkins 

161 

V.  Bowne 

411 

431 

Kemp  V.  Finden 

39 

V.  Pryor 

155 

160 

Kcnnard  v.  Burton 

229 

Kennebec  Ins.  Co.  v.  Augusta  Ins.  and 

Banking  Co.     '  406 

Kennedy  v.  Bait.  Ins.  Co.  476 
V.  St.  Lawrence  Co.  Mut.  Ins. 

Co.  497,  520,521,522,525 

V.  Whitwell  252 

Kennett  v.  Milbank  237 

Kenniston  v.  Mer.  Co.  Mut.  Ins.  Co.  527 

Kennon  v.  Dickens  268 

Kenny  v.  Clarkson  413 

Kenrig  v.  Eggleston  224 

Kensington  v.  Inglis  498 

Kent  V.  Manufacturers'  Ins.  Co.  420 

V.  Phelps  263 

Kentucky  Mut.  Ins.  Co.  v.  Jenks  493,  540 

Kenyon  v.  Berthan  406 

Kcr  V.  Orsborne  476 

Kerns  v-  Schoonmaker  248 

Kerper  v.  Hoch  295 

Kerr  v.  Moon  319 

V.  Willan  223 

Kerrison  v.  Cole  34 

Kershaw  v.  Cox  122 

V.  Matthews  170 

Kerswill  v.  Bishop  354 

Kctclicll  V.  Burns  65 

Ketchum  v.  Barber  268 

V.  Catlin  15 

V.  Durkee  179 

Kewley  v.  Ryan  438 

Keyser  v.  Scott  424 

Kidd  V.  King  160 

Kiggil  )'.  Player  301 

Kilborn  v.  Lyman  296 

Kilgore  v.  Bulkley  90 

Kilgour  V.  Finlyson  142 

Killam  i\  Preston  181 

Killcrease  ;'.  Killcrease  10 

Kilsby  V.  Williams  103 

Kimball  v.  Brown  238 

I'.  Cunningham  56 

V.  Morris  280 

V.  Proprietors  of  the  Boston 

Athenreum  257 

V.  Rut.  &  Bur.  R.  R.  Co.  200 


INDEX   TO    CASES    CITED. 


liii 


Page 
363 
316 
136 
69 
146 
112 


Kimball  y.  Tucker 
Kimberl}'^  v.  Ely 
Kime  v.  Brooks 
King  V.  Baldwin 
V.  Beeston 
V.  Bic'kley 
V.  Corporation  of  the  Bedford 

Level  143 

V.  Delaware  Jus.  Co.  469 

V.  Diehl  252 

V.  Dodd  166 

V.  Drurv  263 

ex  parte  289,291 

V.  Glover  416 

V.  Holmes  105 

I'.  Johnson  266 

V.  Lane  247 

V.  Lenox  216,  382 

V.  Manning  189 
V.  Middletown  Ins.  Co.  461,  462,  476 

V.  Paddock  285 

V.  Richards  211 

V.  Simmonds  284 

V.  Smith  193 
V.  State  Mut.  Fire  Ins.  Co.  413,  414, 
508,510 

V.  Twyning  548 

V.  Upton  27 

v.  Wilcomb  174 

Kingman  v.  Spurr  170 
Kingsley  r.  New  Eng.  Mut.  Fire  Ins. 

Co.  355 

Kingston  v.  Girard.  482 

r.  Kincaid  153,154,156 

V.  Phelps  33 

V.  Wilson  155,  405 

Kingstone  v.  Knibbs  433 

Kinloch  v.  Craig  60 

Kinsler  v.  Pope  194 

Kinsley  V.  Robinson  91 

Kinsman  v.  Dallam  169 

Kintzenger's  Estate  10 

Kivhy,  ex  parte  279 

V.  IngersoU  175 

V.  Schoonmaker  186,  188 

Kirk  V.  Hodgson  177 

Kirkley  r.  Hodgson  330,  331 

Kirkpatrick  v.  Smith  23 

V.  Staincr  146,  163 

Kirney  v.  Smith  284 

Kirwan  v.  Kirwan  27,  193,  194 

Kittredge  v.  Bellows  295 

I'.  Emerson  296 

V.  AVarren  295,  296 

Klein  v.  Currier  66 

Kline  v.  Bebee  4 

Klock  V.  Robinson  252 

Knapp  V.  Alvord  139 

V.  Curtis  203 

V.  Harden  24 

V.  Mc Bride  170 

Knight  V.  Hopper  34 

V.  Nepean  548 


Page 

Knight  V.  Plimouth  298 

Knox  V.  The  Ninetta  347 

Kohn  V.  Packard  209 
Kohne  v.  Ins.  Co.  of  North  America    403, 

492 

Konig  V.  Bayard  132 

Koons  V.  Miller  251 

Koster  v.  Reed  445 

Kramer  v.  Arthurs  174 

V.  M'Dowcll  "114 

Krider  v.  Lafterfy  24 

Krumbhaar  v.  Mar.  Ins.  Co.  470 
Kupfer  ?.'.  South  Parish  in  Augusta      146 

Kyle  V.  Wells  242 

Kymer  v.  Laurie  91,  130 

V.  Suwercropp  149,  415 

Kynter's  case  332 

L. 

Lacey,  ex  parte  299 

Lackington  v.  Atherton  45,  76 

Lacon  v.  Briggs  231 

Ladd  V.  Griswold  187,  188 

Lady  Ormond  v.  Hutchinson  157 
Lafayette  Baidc  v.  State  Bank  of  HI.      139 

Lafonde  v.  Ruddock  .    247 

Laforge  v.  Jaync  235,  237 

Laidler  v.  Burlinson  333 

Laing  v.  Colder  206,  222 

Lamalere  v.  Caze  181 

Lamb  v.  Crafts  78 

V.  Durant  331,  334 

Lambert,  ex  parte  133 

V.  Oakes  124 

V.  Pack  124 
Lambeth  v.  Western  Fire  &  Mar.  Ins. 

Co.  405 

L'Amoreux  v.  Gould  33 

Lamourieux  v.  Hewit  65 

Lamson  I'.  Westcott  392,393 

Lancaster  Coal  Co.,  ex  parte  291 

Lander  v.  Clark  360 

Landie  v.  Robertson  119 

Landry  v.  Stanbury  105 

Lane  v.  Burghart  2 

V.  Cotton  204,  205 

ex  parte  298 

V.  Maine   Mut.  Fire  Ins.  Co.     495, 

.531 

V.  Neale  332 

V.  Penniman  347 

V.  Steward  118,  267,  269 

y.  Williams  192 

Lanfear  v.  Sumner  52,  331 

Lang  V.  Anderdon  424 

V.  Holbrook  391 

Langan  v.  Hewett  176 

Langdale,  fr /OTJte  168 

Langford  r.  Raiford  296 

Langfort  v.  Tiler  43,  46 

Langhorn  v.  Cologan  406 

V.  Hardy     •  458,  460 


liv 


INDEX   TO   CASES   CITED. 


Pase 

Page 

Lanfjlcy  v.  Sturtcvant 

157 

Leavitt  v.  De  Launy 

263 

Lanj^'^toa  v.  llorton 

332 

V.  Peck 

177 

Laruioy  v.  Wcrry 

364 

V.  Palmer 

34 

Lanphicr  v.  Pliipos 

156 

V.  Savage 

69 

Lansdalc  v.  Brashcar 

238 

244, 245 

Le  Breton  v.  Miles 

95, 

321 

Lansing  i\  dainc 

172, 180 

Le  Cheminant  v.  Pearson 

438, 

487 

V.  Turner 

42,  51 

Lech  mere  v.  Fletcher' 

236 

Lantry  r.  Parks 

29 

Lc  Compte,  ex  parte 

289 

Lapliam  v.  Atlas  Ins.  Co. 

460 

Lee  V.  Boardman                     469, 

472, 

477 

Lapsley  v.  Pleasants 

467 

V.  Dick 

67 

Larochc  v.  Oswin 

456 

ex  parte 

291 

Larrahec  r.  Talbott 

315 

V.  Gray 

454 

Latourctte  v.  Williams 

10 

V.  Mass.  F.  &  M.  Ins.  Co. 

419 

Latt  V.  Booth 

4,  7 

Leech  v.  Baldwin 

215, 

356 

Laugher  v.  Pointer 

360 

Leed  v.  Baring 

336 

Laurent  v.  Chatham  Ins.  Co 

511,530 

V.  Cheetham 

539 

Laussatt  r.  Lijjpincott 

141 

Lceke,  e.r  parte 

288 

Lavabre  v.  Wilson 

456 

Leer  v.  Yates 

364 

Lavender,  ex  parte 

285 

Lees  V.  Nuttall 

157 

Laveroni  i\  Drury 

444 

V.  Whitcomb 

32 

La  Vie  zk  Philips 

285 

Leeson  v.  Holt 

222 

Law  V.  Jackson 

81 

Le  Fever  v.  Lloyd 

161 

V.  Hollingsworth 

399,  427 

Leftwitch  v.  St.  Louis  Perpetual 

Ins. 

V.  Sutherland 

266 

Co. 

441 

V.  Wilkin 

29 

Legg  V.  Legg 

10,  96 

Lawler  v.  Keaquick 

144, 156 

Lehman  v.  Jones 

105 

Lawley  v.  Hooper 

254 

Leidy  v.  Tammany 

85 

Lawrence  v.  Aberdein 

433 

Leigh  V.  Smith 

226 

V.  Clark 

183 

Leigh  ton  v.  Atkins 

293 

V.  Cowles 

257 

Leland  v.  The  Medora 

340 

401 

V.  Langley 

119 

Le  Louis 

318 

V.  New  Bedford  Com. 

Ins. 

Lemaster  v.  Buckhart 

26 

Co. 

473 

Le  Mesurier  v.  Vaughan 

437 

V.  Svdebotham 

456 

Lemon  v.  Walker 

390 

395 

V.  Taylor 

136 

, 137, 177 

Lenox  v.  Leverett 

113 

V.  The  Trustees  of  the 

Leake 

V.  United  Ins.  Co. 

370 

,480 

&  Watts  Orph 

an  House  192 

V.  Winisimmet  Co. 

383 

,  384 

V.  Van  Home 

439,  487 

Leonard  v.  Bates 

26 

V.  AVarrall 

232 

V.  Hendrickson 

202 

Lawson  v.  Higgins 

402 

V.  Huntington 

329 

V.  LoYCJoy 

4,  6 

V.  Mason 

90 

V.  Sherwood 

115 

V.  Wredenburgh       26, 

66,  7 

2,  74 

V.  The  Farmers'  Bank  of 

Leroux  v.  Brown 

78 

Salem 

144 

Le  Koy  v.  Beard 

146 

Layct  V.  Gano 

142 

V.  Crowningshield 

95 

,  323 

Layng  v.  Stewart 

353 

V.  Johnson 

179 

Layton,  e.r  parte 

286 

V.  United  Ins.  Co. 

411 

,412 

Lazarus  v.  Commonwealth  ] 

ns. 

Co.      408, 

Leslie  v.  Guthrie 

300 

508 

Lester  v.  Jewett 

32 

V.  Cowie 

127 

t'.  McDowell 

48 

Lea  V.  Guiee 

175 

Let  V.  Melville 

284 

Leach  v.  Leach 

171,  184 

Leverick  v.  Meigs 

154 

,  159 

V.  Mullett 

53 

Levi  V.  Watcrhousc 

223 

Leadbctter  v.  iEtna  Ins.  Co. 

535 

Levy  V.  Baillie 

539 

Leader  r.  Barry 

4 

V.  Cohen 

20 

Leaf  V.  Coles 

171 

Lewis  V.  Culbertson 

191 

Leapcr  r.  Tatton 

332,  233 

ex  parte 

284 

Lear  v.  Yarnel 

261 

V.  Gompertz 

112 

Leathers  v.  Farmers'  Mut.  Fire  Ins. 

V.  Hancock 

381 

Co. 

514 

V.  Ilillman 

157 

Leavenworth  v.  Delafield 

372 

373,  476, 

/«  re 

284 

482,  483 

V.  Littlcfield 

9 

Leavitt  v.  Blatchford 

35 

V.  Moffctt 

183 

INDEX   TO    CASES  CITED. 


Iv 


Page 
Lewis  V.  Parker  97,  102 

r.  Ileilley  191 

V.  Rucker  409,  485 

V.  Thatcher  422 

V.  The  Elizabeth  and  Jane  38S 

V.  The  Western  Railroad  Corp.  207 
1-.  Williams  369,  374,  480 

Lexington  Ins.  Co.  v.  Paver  434 

LickbarroNV  v.  JIason  50,  63,  346 

366 
194 

140 
135, 


Liddard  v.  Lopes 
Liddiard,  ex  parte 
Life  and  Fire  Ins.  Co.  v.  Mechanics' 

Fire  Ins.  Co. 
Lightbody  v.  North  Am.  Ins.  Co. 


140,  405,  458,  492 

V.  Ontario  Bank  90 

Lillie  V.  Ilovt  248 

Lime  Rock  "Bank  V.  Mallett  69 

V.  Plimpton        139,  148 

Lincoln  v.  Battclle  323 

V.  Hapgood  323 

Lindaucr  v.  Delaware  Mut.  Safety  Ins. 

Co.  493 

Lindenau  v.  Desborough     523,  556,  559, 

560 
Lindo  V.  Unsworth  115 

Linsell  v.  Bonsor  239 

LiotarS  v.  Graves  144,  154,  252 

Lippincott  v.  Barker  277 

Liscom  V.  Boston  Mut.  Fire  Ins.  Co.   517, 

538 

Litt  V.  Cowley  61 

Litterel  v.  St.  John  44 

Little  V.  Blunt  242,  246,  248 

V.  Phoenix  Bank  91 

v:  Slackford  86 

Littledale  v.  Dixon  433 

Littlejohn,  ex  ;)ar<e  291 

V.  Jones  202 

Little  Miami  R.  R.  Co.  v.  Stevens        229 

Livie  V.  Janson  453 

Livingston  v.  Bird  255 

V.  Delafield  433 

V.  Hastie  180 

V.  Maryland  Ins.  Co.   423,  429, 

452,  470,  471 

V.  Miller 

V.  Radcliff 

V.  Roosevelt 

Llewellyn,  ex  parte 

Lloyd  V.  Keach 

V.  Maund 

V.  Oliver 

V.  Scott 

V.  West  Branch  Bank 


252 

193, 194 

174, 175 

289 

266 

232,  233,  236 

89 

25,5,  257,  263 

139 

Load  V.  Green  56 

Lobdell  r.  Baker  135,  152 

Locke  V.  North  Am. Ins.  Co.  417,  508,525 

V.  Stearns  152,  175,  180 

V.  The  Swan  361,  389 

Lockyer  v.  Olllcy  448,  547 

r.  Savage  289 

Lodge  V.  Dicas  193 


164,  168 


Lodge  V.  Phelps 

Lodwicks  V.  Ohio  Ins.  Co. 

Loehner  v.  Home  Mut.  Ins.  Co. 

Logan  V.  Le  Mesurier 

Long  V.  Coburn  145,  146, 

V.  Majestre 

V.  Storie 

V.  Story 
Longhorn  v.  Allnutt 
Longridge  v.  Dorvillc 
Loomis  V.  Marshall 
Loraine  v.  Cartwright 
V.  Tomlinson 
Lord  V.  Baldwin  185, 

V.  Brig  Watchman 

V.  Dall  409,  .549, 

V.  Ferguson 

V.  Hall 

V.  Neptune 

V.  The  Neptune  Ins.  Co.       422, 

V.  Wheeler 
Lord  Chcdworth  v.  Edwards 

Hardwick  v.  Vernon 

Lovelace's  case 

Ossulston  V.  Lord  Yarmouth 

Southhampton  v.  Brown 
Lorent  v.  S.  Car.  Ins.  Co. 
Loring  v.  lUsley 

V.  Neptune  Ins.  Co.  374, 

V.  Proctor 
V.  Stineman 
Lorymer  v.  Smith 
Loscombe  v.  Russell 
Losee  v.  Dunkin 

Louisiana  Bank  ^^Kenner■s  Succession 
Louisiana  State  Bank  r.  Senecal 
Lounsbury  r.  Prot.  Ins.  Co.  501, 

Lovelock  V.  King 

Lovering  v.  Mercantile  Ins.  Co.     435, 
Lovett  V.  Hobbs  201,  204, 

Low  V.  Barchard 

V.  Commissioners   of  Pilotage 

In  re 

V.  Perkins 
Lowe  I'.  Moss 

V.  Peers 

V.  Waller  257, 

V.  Weatherley 
Lowell  V.  Johnson 

V.  Middlesex  Mutual  Fire  Ins. 
Co. 
Loweth  V.  Fotliergill 
Lowry  v.  Adams 

0.  Bourdicu 
Loyd  i\  Freshtield 
Lubbock  i\  Potts 
Lucas  V.  Beach 
V.  Darrien 
V.  Goodwin 
V.  Groning 

V.  Jefterson  Ins.  Co.     419,  420, 
V.  Nockclls 
Lucena  v.  Craufurd  137, 


Page 
322 

527 
524 

42 
148 
184 
257 
191 
461 

28 
1( 

154 
436 
187 
277 
560 
339 
136 
475 
475 

36 
157 
157 
177 
268 

38 
450 
335 
486 
403 
548 

55 
182 
102 
170 
150 
506 

31 
471 
226 

27 
398 
309 
146 
208 

99 
259 

28 
258 

512 

232 

67 

437 

179 

437 

182 

45 

37 

159 

518 

360 

439 


IVl 


INDEX   TO    CASES    CITED. 


Paf;c 

Luccna  v.  Crawford 

415 

,  507 

,  512 

Luciani  v.  Am.  Fire  Ins. 

Co 

507 

Lucy,  ex  parte 

23 

Ludlow  V.  ("ol.  Ins.  Co. 

473 

V.  Van  IkCnssL'laer 

318 

Lufkin  V.  Mayall 

8 

Luke  V.  Lyde     348,  349 

,   350, 

351, 

352, 

47G 

I'.  Lyndc 

351 

352 

Lumlcy  v.  Palmer 

129 

Lui)tou  V.  White 

157 

Lush  V.  Druse 

252 

Lusk  V.  Smith 

191 

Lutwidge  r.  Gray 

350 

351 

Lyde  v.  Mynn 

291 

Lyle  V.  Murray 

248 

Lyman  v.  Redman 

381 

V.  The  Boston  an 

d  Worcester 

K.  11.  Co. 

229 

Lynch  v.  Dalzell 

407 

531 

534 

r.  Dunsford 

430 

V.  Hamilton 

430 

V.  Nurdin 

228 

Lyon  V.  Commercial  Ins. 

Co 

523 

V.  Jerome 

155 

V.  King 

75 

V.  Mel  Is 

222 

V.  State  Bank 

255 

V.  Tams 

156 

Lysaght  v.  Bryant 

IIG 

Lyster  v.  Payn 

417 

M. 


Page 

Maggs  i».  Ames  65 

Magoun  v.  New  Eng.  Mar.  Ins.  Co.      448 

Magrath  v.  Bobertson  285 

Mahoon  v.  The  Gloccster  396 

Maine  Bank  v.  Butts  265 

Mainwaring  v.  Brandon  156 

V.  Newman  183 

Mair  v.  Glennic  168,  332 

Major  V.  Ilawkes  193 

Mallough  V.  Barber  156 

Malone  v.  The  Brig  Mary  398 

Maltby,  ex  parte  287 

Manchester  Iron  Manuf.  Co.  v. 

Sweeting  69 

Manderston  v.  Bobcrtson  241 

Mandeville  v.  Welch  97 

V.  Wilson  245 

Manella  v.  Barry  154 

Manfield  v.  Maitland  419 

Manhattan  Co.  v.  Osgood  264 

Manlv  V.  United  Mar.  and  Fire  Ins. 

Co.  458,  459 

Mann  v.  Huston  278,  286 

y.  Moors  113 

V.  Shiffner  139 

Manning  v.  Newnham  473 

Manter  v.  Holmes  360 

Marbury  v.  Brooks  •      276 
Marcardier  v.  The  Chesapeake  Ins. 

Co.  360,  422,  449,  465,  473 

March  w.  Pigot  414 

Marchant  v.  Dodgin  259 

Marchetti  ;•.  Williams  130 

Mare,  ex  parte  289 

Marfield  v.  Douglass  139,  159 


Maberley  v.  Sheppard 

76 

V.  Goodhue 

159,  161 

162 

Maearty  v.  Com.  Ins.  Co. 

487 

Marine  Ins.  Co.  i'.  Tucker 

470 

Macbeath  r\  Haldimand 

70 

V,  Turner 

474 

Mace  V.  Wells 

293 

V.  United  Ins.  Co. 

351 

Mackay  v.  Bloodgood 

177 

Markham  v.  Jones 

167 

Mackenzie  v.  Cox 

197 

]\Iarks  V.  Hamilton 

508 

V.  Scott 

159 

Marley  i\  Boothby 

66 

V.  Shedden 

418 

Marlow  v.  Bitfield 

7 

Mackie  v.  Pleasants 

423 

Marquand  v.  New  York  Manuf.  Co. 

169, 

Mackinley  v.  McGregor 

136 

170 

Mackrell  v.  Simond 

361 

Marr  r.  Southwick 

192 

Maclean  v.  I3unn 

46 

136 

Marriott  v.  Sliaw 

189 

Macleed  v.  Snee 

87 

Marryatts  v.  White 

83 

Macomber  v.  Com.  Mut.  Fire 

Ins 

.Co. 

509 

Marsden  v.  Reid 

432 

457 

V.  Dunham 

261 

Marseilles  v.  Kenton 

244 

V.  Parker 

4 

2,  48 

Marsh  v.  Ban- 

114 

Mactier  i\  Frith 

19 

404 

492 

ex  parte 

288 

Macy  V.  De  Wolf 

334 

336 

V.  Home 

223 

224 

V.  Whaling  Ins.  Co. 

469 

IK  Martindale 

254 

258 

Maddcrford  v.  Austwick 

184 

V.  Maxwell 

116 

Madison  Co.  Bank  v.  Gould 

195 

V.  Newell 

127 

Mad  Biver  and  Lake  Erie  B 

R. 

Co. 

I'.  Predder 

353 

V.  Fulton 

226 

227 

V.  Robinson 

416 

Magee  v.  Atkinson 

147 

V.  Rulesson 

29 

V.  The  Ship  Moss 

386, 

387 

Marshall  r.  Dudley 

252 

Mager  v.  Jadis 

125 

ex  parte 

291 

Magill  V.  Merrie 

172 

V.  Montgomery 

390 

Maggrath  v.  Church        370, 

373, 

467, 

481 

V.  Nashville  M.  and  F.  Ins.  Co.  447 

INDEX   TO    CASES   CITED. 


Ivii 


Pago 

Page 

Marshall  v.  Union  Ins.  Co. 

431 

Jlay  IK  Babcock 

23 

Marstcllcr  v.  M'Clcan 

247 

V.  Breed 

315 

,316 

Marston  r.  Allen 

85 

V.  Campbell 

267 

Marten  v.  Maj'o 

9 

V.  Princeton 

228 

Martin  v.  Boyd 

121 

Mayall  v.  Mitford 

503 

V.  Brccknell 

292 

May  field  v.  Wadsley 

74 

V.  Broach 

236 

Mayhcw  v.  Boyce 

229 

V.  Chauntry 

87 

V.  Eamcs 

149 

V.  Crokatt 

463 

IMaynard  v.  Ilhodes 

559 

V.  Crompe 

191 

Mayo  V.  Archer 

285 

V.  Delaware  Ins.  Co. 

455 

V.  Harding 

385 

ex  parte 

302 

V.  Maine  Fire  and  M.  Ins. 

Co. 

409, 

V.  Fishing  Ins.  Co. 

423, 459 

466 

V.  Heathcote 

244 

Mayor  w.  Humphries 

206 

V.  Hilton 

399 

Mazozon  v.  Foot 

246 

V.  JMayo 

5,  6 

M'Andrcw  v.  Bell 

433 

V.  Nightingale 

284 

M'Bride  v.  Marine  Ins.  Co.  365, 

366, 

372, 

V.  Salem  Ins.  Co. 

444 

450 

487 

V.  Temperly 

360 

M'Cargo  i'.  Merch.  Ins.  Co. 

437 

Martindale  v.  Smith 

46,  63 

M'Cartce  v.  Camel 

548 

Marvine  v.  Hymers  255,  263,  264 

Maryland  Ins.  Co.  v.  Bathurst  431 

V.  Le  Roy  454,  455 

Marzetti  v.  Williams  1 54 

Mason  v.  Barff  129 

V.  Connell  170 

V.  Crosby  152 

V.  Denison  285 

V.  Franklin  Fire  Ins.  Co.  491,  495 

V.  Haile  316 

V.  Harvey  535 

IK  Joseph  155,  156 

V.  Mason  547 

V.  Morgan  10,  128 

V.  Sainsbury  414 

V.  Ship  Blaireau  456 

V.  Wickersham  194 

Massey  v.  Davies  157 

Massiter  v.  Cooper  206 

Masson  v.  Bovet  56 

Master  v.  Miller  406 

Masterman  v.  Cowrie  263 

Masters  v.  Madison  Co.  Mut.  Ins.  Co.  408, 

512, 532 

V.  Masters  23 

Mather  v.  Bush  316 

Mathews  v.  Aikin  65 

Mathewson  v.  Johnson  «          4 

Mathie  v.  Potts  460 

Matson  v.  Wharom  73 

Matthews  v.  Bliss  57 

ex  parte  ■  331 

IK  Milton  73 

V.  Offley  396 

V.  The   Howard  Ins.  Co.      443, 

445,  527 

Manro  v.  Almeida  381 

Maury  v.  Talmadge  219 

Maving  v.  Todd  222,  226 

Mavor  v.  Pyne  250 

Mawson  v.  Blanc  5 

Maxey  v.  Averill  193 

Maxwell  v.  Robinson  460 


M'Carter  v.  Huntington  339 

M' Clung  v.  Spotswood  135 

M'Clure  v.  Richardson  199 

r.  Williams  258 

M'CIures  v.  Hammond  199 

M'Comb  V.  Wright  136 

M'Combie  v.  Davies  159 

M'Cormick  v.  SuUivant  319 

V.  Trotter  87 

M'Corthy  v.  Abel  469,  476 

M'Culloch  V.  Indiana  Mut.  Fire  Ins. 

Co.  533 

V.  Roy  435 

V.  The  Eagle  Ins.  Co.  403,  404 

M'Culloh  r.  Dashiell  187 

M'Cullough  V.  Sommerville  276 

M'Doal  V.  Yeomans  65 

M'Donald  v.  Beach  186 

M'Donncll  v.  Carr  546 

M'Dougal  V.  Baton  293 

M'Elmoyle  v.  Cohen  323 

M'Elwee  v.  Collins  267 

M'Gaw  I'.  Eagle  Ins.  Co.  475 

V.  Ocean  Ins.  Co.    350,  355,  474, 

475 

M'Gruder  v.  Bank  of  Washington         1 64 

M'Guire  v.  Parker  262 

IMTntire  v.  Browne  •  449 

MTntyre  v.  Bowne  360 

V.  Parks  320 

V.  Scott  339 

M'Kesson  v.  M'Dowell  263 

M'Kim  V.  Phcenix  Ins.  Co.  410,  419 

M'Lanahan  v.  The  Universal  Ins.  Co.  427, 

433, 440 
M'Lane  v.  Sharpe  229 

M'Mechen's  Lessee  v.  G»indy  281 

M'Millan  v.  M'Neil  315,316 

V.  Union  Ins.  Co.  399,  425 

V.  Vanderlip  29 

M'Queen  v.  Burns  262 

M'Quirk  v.  The  Penelope  389,  416 

McAllister  v.  Reab  251 


Iviii 


INDEX   TO    CASES    CITED. 


McArthur  v.  Ladd 
V.  Sears 
McBridc  v.  Gray 
]\IcCalmoiit  V.  Kankin 
McCormick  v.  Connoly 
McCoy  V.  Artclicr 

i\  Iluffiiian 
McCrackcii  v.  Havward 


Page 

177 

204,  213,  214 

2.37 

329 

32 

58 

8 

315 


The  Soutli   Car.  R.  R. 

229 
286 
7 
177 
492 
239 
324 
143,  511 


McCready 

Co. 
McCrillis  v.  Bartlett 

r.  How 
McCulIoch  V.  Sommerville 
]\IcCiillook  V.  Eagle  Ins.  Co. 
McCullough  V.  Henderson 
McDaniel  ik  King 
McDonald  v.  Black 


IK  Napier  150,  151 

McDonnell  v.  Branch  Bank  248 

McDowell  V.  Cook  133 

McEh-oy  V.  N.  and  L.  R.  R.  Co.  207 

McEwen  v.  Tlic  Montgomerv  Co.  Ins. 

Co.  ■         149,517 

McGan  v.  Marshall  4 

McGhee  v.  ]\Iorgau  27 

McGill  V.  Rowand  225,  226,  227 

V.  Ware  257,  265 

McGinn  v.  Shacffer  9 

McGivney  v.  Phoenix  Fire  Ins.  Co.     412, 

507 
McGraw  V.  Pulling  16G 

McHenry  v.  Railway  Co.  207 

Mcllvaine  v.  Wilkins  252 

Mclver  v.  Richardson  17,  66 

McKenzie  v.  Nevius  156,  163 

McKinly  v.  Watkins  32 

McKinney  v.  Neil  207,  219,  220 

McKinsteV  v.  The  Bank  of  Utica  144 

McKinstry  v.  Pearsall  141 

McKniglu  V.  Dunlop  30 

McLaren  v.  Hartford  Fire  Ins.  Co.        533 
McLellan,  in  re  300 

V.  Maine  F.  and  M.  Ins.  Co.  469 
McMahon  v.  Portsmouth  Mut.  Fire  Ins. 

Co.  496,518 

V.  Sloan  46 

McMastcrs  v.  Westchester  Co.  Mut. 

Ins.  Co.  •  532 

McMenomy  v.  Roosevelt  276 

McMinn  v.  Richmonds  4 

McNeil  y.  Colquhoon  311 

McNiell  V.  Reid  32 

McPiierson  v.  Rathbonc  167 

Mead  v.  Davison  458 

V.  Degolyer  30 

V.  Engs  144 

V  Tomlins»a  179 

V.  Young  88 

Meader  v.  Scott  191 

Mechanics'  Bank  v.  Bank  of  Colum- 
bia 139,  145 
V.  Edwards  259 
V.  Merchants'  Bank   144 


Page 
Mecorney  v.  Stanley  104,  121 

Mcdbury  v.  Hopkins  318,  323 

V.  Watrous  8 

Medway  v.  Needliam  318 

Mccch  V.  Piiiladelphia  Fire  and  Inland 

Nav.  Ins.  Co.  411 

V.  Robinson  368,  479,  481 

V.  Smith  147,  148,  251 

Meigs  V.  The  Mut.  Mar.  Ins.  Co.  462 

Melaricjon  v.  Robicliaux  57 

Melledge  r.  Boston  Iron  Co.  137 

Mellen  v.  Nat.  Ins.  Co.  440 

V.  Whipple  38 

Mellish  V.  Allnutt  460 

V.  Andrews  470 

V.  Rowdon  103 

i\  Simeon  94 

Mercantile  Mut.  Ins.  Co.  v.  Chase        221 

Mercer  v.  Lancaster  114 

V.  Selden  10,  246 

V.  Southwell  105 

Mcrch.  Ins.  Co.  v.  Clapp  425 

Merchants'  Bank  v.  Birch  126 

V.  Marine  Bank  140 

Mcrcliants'  Fire  Ins.  Co.  v.  Grant  5 

Meredith  v.  Hinsdale  322 

Meres  v.  Ansell  21 

Merian  v.  Funck  3.53 

Meritt  v.  Clason  77,  136 

Merriam  v.  Wilkins  5 

V.  The  Hartford,  &c.,  R.  R. 

Co.  210 

Merrick  v.  The  Bank  of  the  Metropolis  140 
Merrick's  Estate  162,  301,  311,  313 

Merrill  v.  Bartlett  334,  338 

V.  Wilson  195 

Merrills  v.  Law  256,  261 

Merritt  v.  Benton  263 

Merry  r.  Prince  406,412 

Mershon  r.  Hobensack  199,  213 

Mervin  v.  Shailer  381 

Mcrwin  v.  Butler  201,  208 

Messenger  i'.  Southey  112 

Messer  r.  Woodman  48,  54 

Messier  v.  Amory  141,  160 

Metcalf  w.  Bruin  185 

V.  Pilcher  260,  267 

_w.  Roval  Exch.  Ass.  Co.  174 

Metcalfe  v.  Parry  456 

Methuen  Co.  v.  Hayes  135 

Meymot,  ex  parte  279,285 

Michenson  v.  Begbie  358 

.Michigan  Central  R.  R.  Co.  i'.  Ward    221 
Middlebury  v.  Case  97 

Middiebury  College  v.  Chandler  7 

IMiddlewood  v.  Blakes  434,  455,  458 

Miers  v.  Brown  112 

Mifflin  V.  Smith  177 

Milburn  v.  Guytlier  334 

Miles  V.  Gorton  44,  82 

V.  Thomas  182 

Millar  r.  Craig  183 

Millaudon  v.  Atlantic  Ins.  Co.        495,  513 


INDEX   TO    CASES   CITED. 


lix 


Page 

Millaudon  v.  N.  0.  Ins.  Co.  527 
V.  Western  M,  and  F.  Ins. 

Co.  420,  .'3.30 

Miller  v.  Brant  397 

V.  Drake  26,  32,  38 

V.  Gaston  6.5 

V.  Hull       ■  2,58 

V.  Manice  179 

V.  Miller  249,  2.50 

V.  Race  47,  90,  122 

V.  Stewart  67 

V.  Travers  22 

Millet  V.  Stephens  389 

Millikin  v.  Brandon  285 

Mills  V.  Argall  195 

V.  Barber  175 

V.  Fowkes  238,  239 

V.  Hunt  44.  76 

V.  Lee  28 

V.  Long  385 

V.  Roebuck  425 

Miln  V.  Spinola  339 

Milne  r.  Bartlett  170 

I'.  Huber  35 

r.  Moreton  311,312,318 

Milner  v.  Tucker  53 

Milnes  v.  Cowley  27 

Miltenberger  v.  IScacom  509,  514 

Milton  V.  Mosher  136,  137,  174 

Milward  v.  Hallett  378 

V.  Hibbert     .  371,  480 

Minard  v.  Jlead  12 

Mine  v.  Richmonds  7 

Miner  v.  Bradley  53 

V.  Downer  177 

V.  Tagert  409 

Minet,  ex  parte  289,  293 

Minor  v.  The  Mechanics'  Bank  of 

Alexandria  139 
Minturn  y.  Columbian  Ins.  Co.   410,412, 

421 

Missroon  v.  Waldo  57 

Mitchel  V.  Reynolds  26,  99 

Mitchell  V.  Baring  1 32 

V.  Degrand  106 

V.  Eddie  470 

V.  Gazzam  281 

V.  Gile  42 

.      .         V.  Scaife  360 

V.  Sellman  235 

V.  Winslow  300 

Mitford  V.  Mitford  .        300 

V.  Walcott  132 

Mixer  v.  Coburn  37,  57 

v.  Cook  46 

V.  Howarth  78 

Moadinger  v.  Mech.  Fii'C  Ins.  Co.  494 

Moehring  v.  Mitchel  547 

Motfat  V.  East  India  Co.  563 

Mohawk  Bank  v.  Broderick  107 

Molicre  v.  Noe  295 

V.  Penn.  Fire  Ins.  Co.  495 

Moller  V.  Young  345 


Molson  ?•.  Ilawley  291 

Molton  V.  Camroux  286 

Moncure  v.  Dermott  258,  266 

]Mondell  v.  Steel  37 

Monell  V.  Burns  29 

Moneypenny  V.  Hartland  162 

Monk  V.  Clayton  143 

V.  Whittenburg  153 

Monkhouse  v.  Hay  330 

Monroe  ?;.  Conner  177 

V.  Linch  229 

Montague  v.  Perkins  126 

Montefiori  v.  Montefiori  289 
Montgomery  CountfiBank  i\  Albany 

City  Bank  144 

Montgomery  Railroad  Co.  v.  Hurst      137 

Montoya  v.  London  Ass.  Co.      "421,  443 

Moody  V.  Brown  48,  49 

V.  Buck  335 

ex  parte  289 

V.  Payne  188,  190 

V.  Trelkcld  145 

V.  Webster  139 

Moon  V.  Guardians  of  Witney  Union     155 

Moore  v.  City  of  Lowell  309 

V.  Clementson  148,  152,  162 

V.  Evans  221 

ex  parte  284 

V.  Fitzwater  28 

V.  Hcndrick  247 

V.  Hylton  257 

V.  Hyman  237 

V. Jones  389 

V.  Moore  157 

V.  Protection  Ins.  Co.  500,  537 

V.  Sample  189 

V.  Taylor  461 

V.  Vance  259,  268 

V.  Warren  126 

V.  Wilson  148 

V.  Woolsey  553 

Moorsom  v.  Bell  363 

V.  Kymer  353 

More  V.  Howland  268 

V.  Manning  120 

('.  Mayhow  149 

Morean  v.  U.  S.  Ins.  Co.  421 

Moreton  v.  Harden                .  180 

Morey  v.  Homan                   *  15 

Morgan  v.  Brundrett               •  281 

V.  Davison  107,  108 

V.  Richardson  177 

V.  Schermerhorn  259 

V.  Stell  140,  143 

r.  Walton  236,  242 

Morisset  v.  King  264 

Morley  v.  Boothby  26 

V.  Culverweil  128 

Morrall  v.  Mann  136 

Morrell  v.  Frith  235,  236,  238 

Morridge  v.  Jones  37 

Morris  v.  Cleasby  152,  158,  161 

V.  Kearsley  173 


Ix 


INDEX   TO    CASES    CITED. 


Page 

Morris  v.  Lee 

86 

I'.  Morris 

188 

V.  Norfolk 

11 

V.  ]lol)inson 

333,  380 

I'.  Summcrl 

156 

V.  Walker 

100 

Morrison  v.  Blodgett 

189, 190 

V.  Munpratt 

559,  560 

V.  Parsons 

476 

Morrison's  Adm.  v.  Tenn.  M.  and  F. 

Ins.  Co.              408,  507,  510,  531,  533 

Morse  v.  Bellows  176 

V.  Green  145 

V.  Hovey         #  293,  309 

V.  Royal  157 

V.  Slue  224 

V.  Williams  93 

r.  Wilson  168,264 

Mortimore  v.  Wright  29 

Morton  v.  Burn  27 

V.  Naylor  87 

V.  Tibbett  76 

Moses  V.  Boston  and  Me.  R.  R.  Co.    203, 

204,  222 

V.  Col.  Ins.  Co.  466,  473 

V.  Delaware  Ins.  Co.  433 

V.  Macferlan  36 

V.  Mead  57,  58 

V.  Norris  199 

V.  Pratt  436 

V.  Stevens  8 

V.  The  Sun  Mut.  Ins.  Co.  440,  451 

Moss  V.  Rossil  Lead  Mining  Co.    137,  138 

V.  Smith  463,  473 

V.  Sweet  54 

Moth  V.  Fro  me  306 

Motley  V.  Man.  Ins.  Co.  509 

Motteux  V.  London  Ass.  Co.         461,  495 

Mottram  v.  Ileyer  62 

Moule  V.  Brown  91,  108 

ex  parte  285 

Moult,  ex  parte  187,  188 

Mount  V.  Waite  409 

Mountford  v.  Harper  92 

V.  Scott  150 

Mountstephen  v.  Brooke  233,  242 

Mo  watt  V.  Howland  172 

Mowbray,  ex  parte  299 

Mowry  v.  Bishop  265,  268,  269 

V.  SUedden  365 

Mozley  v.  Tinkler  17 

Mucklow  V.  Mangles  48,  333 

Muggridge  v.  Eveleth  357 

Muhler  v.  Bohlens  159 

Muilman  v.  D'Eguino  103,  104,  115 

Muir  V.  United  Ins.  Co.  471 

Muldon  V.  Whitlock  335,  336 

Mullen  V.  Gilkinson  29- 

Muller  V.  Gcnon  354 

Mulloy  V.  Backer  356 

Mumford  v.  Ilallett  410 

V.  NicoU  338 

V.  The  Commercial  Ins.  Co.  349 


Munger  v.  Tonawanda  R.  R.  Co.  228 

Munn  V.  Baker  224 

V.  Commission  Co.  266 

V.  Worrall  *  16 

Mm'dock  v.  Chenango  Mut.  Ins.  Co.  406, 
408,  496,  512,  519,  521,  532 
Murmester  v.  Barron  113 

Murray  v.  Alsop  434 

V.  Garret  36 

V.  Columbian  Ins.  Co.    409,  437, 
439,  460 
V.  East  India  Co.  142 

V.  Harding  263 

V.  Hatch  462 

i;.  Ins.  Co.  ofPcnn.  419,421 

V.  Kellogg  389 

V.  King  117 

V.  Mechanics'  Bank  237 

V.  Mumford  190 

V.  Murray  190 

V.  Riggs  277 

Murrill  r.  Neill  185,187 

Muschamp  v.  L.  and  P.  Junction  Rail- 
way 217,  218 
Muse  V.  Donalson  180 
V.  Donelson                                   241 
Musgrovc  V.  Gibbs                                    266 
Musier  v.  Trumpbour                              164 
Mussey  v.  Rayner  67 
V.  Scott                                        145 
Musson  V.  Lake                                      105 
Mut.  Ass.  Co.  V.  Mahon                         512 
Mut.  Assurance  Society  v.  Stanard       295 
Mut.  Safety  Ins.  Co.  v.  Cargo  of  Ship 

George  373 

V.  Cohen  464 

V.  Hone  518 

Mutford  V.  Walcot  131 

Mycoff  V.  Longliead  266 

Myer  v.  Vander  Deyl  480 

Myers  v.  Edge  185 

V.  Entriken  141,  160 

ex  parte  291 

Mytton  V.  Cock  198 

M.  &  M.  Bank  v.  Winship  175,  177 


N. 


Nash  V.  Brown  97 

V.  Skinner  121 

V.  Tupper  95,  322,  323 

Natchez  Ins.  Co.  v.  Stanton  456 

Natterstrom  v.  The  Ship  Hazard  387 

Navone  v.  Haddon  422 

Nayler  v.  Palmer  447 

Naylor  v.  Dennie  64 

V.  Taylor  469,  476 

Neal  r.  Cottingham  311 

V.  Saunderson  213 

Neatc  r.  Ball  54 

Neel  V.  Deens  36 

Neely  v.  Onondaga  Co.  Mut.  Ins.  Co.  534 


INDEX   TO    CASES   CITED. 


Ixi 


Page 

Neilson  v.  Col.  Ins. 

Co. 

421 

V.  Do  La  C 

our 

460 

Neirinckx,  ex  parte 

284 

Nell  is  V.  Clark 

16 

Nelson  v.  Boynton 

74 

V.  Cartmel 

2.53 

V.  Cowing 

142,  152 

V.  Dubois 

121 

V.  Hill 

192 

I'.  Salvador 

424 

et  al.  V.  Suffolk  Ins.  Co.     443,  445 
Nerot  y.  Burnand  169 

V.  Wallace  26 

Nesbitt  V.  Lushington  450,  451 

V.  Tredennick  157- 

New  Eng.  Mut.  Fire  Ins.  Co.  v.  Butler  489 
Neville  v.  Mer.  and  Man.  Ins.  Co.  492 
Nevison  i'.  Whitley  255 

Nevius  V.  Kockingham  Eire  Ins.  Co.    511, 

534 

Newall,  e.r  parte  284 

V.  Hussey  337 

Newberry  v.  Colvin  360 

Newcastle  Fire  Ins.  Co.  v.  Macraorran  422, 

477,  498 
Newcastle  Manuf.  Co.  v.  Red  River 

R.  R.  Co.  162 

Newdigate  v.  Lee  295 

Newel  V.  Keith  29 

Newell  V.  Hurlburt  138 

Newhall,  ex  parte  300,  304 

?;.  Vargas  60,61,63,415 

New  Hampshire  Mut.  Ins.  Co.  v.  Rand 
»  490,  539 

New  Haven  County  Bank  v.  Mitchell    66, 

68,  185 
New  Jersey  Steam  Navigation  Co.  v. 

Merchants'  Bank  220,  222 

Newman  v.  Bagley  188 

V.  Bean  .         189 

V.  Cazalet  486 

V.  Kettelle  248 

Newniarch  r.  Clay  82 

Newnham  v.  Stevenson  283 

Newsome  v.  Coles  172,  178 

Ncwson  V.  Douglass  405 

Newton  v.  Chantler  281,  283 

V.  Stebbings  384 

V.  Trigg  285 

New  York  Bowery  Ins.  Co.  v.  New  York 

Fire  Ins.  Co.    412,  430,  432,  515,  523, 

524,  535 

New  York  Eq.  Ins.  Co.  v.  Langdon     498, 

501 

Fire  Ins.  Co.  v.  Bennett      166 

V.  Delevan      539 

Firemen's  Ins.  Co.  v.  Ely,  257, 

265 

V.  Walden 

429 

Gaslight  Co.  i'.  Mechanics' 

Fire  Ins.  Co.  406 

Ins.  Co.  V.  Thomas  406 


New  York  Life  Ins.  Co.  v.  Flack  553,  555, 

557 

Nias  V.  Adamson  298 

Niblo  V.  North  Am.  Fire  Ins.  Co.  495,  511, 

525,  529,  530 

Nicholc  V.  Allen  29 

Nicholls  V.  Webb  HI 

Nichols  V.  Cosset  262 

V.  Fearson  256,  266 

V.  Lee  256 

V.  Patten  16 

V.  Raynbred  32 

Nicholson  v.  Willan  223 

Nickels  V.  Maine  Ins.  Co.  484 

Nickson  v.  Birham  146 

Nicolet  V.  Ins.  Co.  495 

NicoU  V.  Am.  Ins.  Co.  432,  521 

V.  Mumford  170,  171,  334,  338 

Niell  V.  Morelay  286 

Nixon  V.  Hyserott  145 

Noble  V.  M'Clintock  ISO 

Noe  V.  Hodges  90 

Norcross  v.  Ins.  Co.  507 

Norman  v.  Morrell  23 

V.  Phillips  76 

Norris  v.  Ins.  Co.  of  North  America     406 

V.  Windsor  30 

North  V.  Forest  77 

Nortliampton  Bank  v.  Pcpoon  140 

North  River  Bank  v.  Aymar  145,  150 

Norton  i'.  Cook  31 6 

V.  Eilam  248 

V.  Marden  16 

V.  Pickering  1 1 8 

V.  Rensselaer  &  S.  Ins.  Co.      535 

V.  Simmes  34 

Norway  Plains  v.  B.  &  M.  R.  R.  204,  211 

Norwich  Bank  v.  Hyde  88 

Nostra  Signora  de  los  Dolores  381 

Nourse  v.  Prime  263 

Novelli  V.  Rossi  124 

Nowian,  ex  parte  279 

Nutt  V.  Bourdieu  448 

Nutting  V.  Conn.  R.  R.  Co.  218 

Nutz  V.  Retter  n 


O. 


Oakeley  v.  Pasheller 
Oakley  v.  Aspinwall 

V.  Bennett 

V.  Morton 
Oaste  V.  Taylor 
O'Brien  v.  Currie 

V.  Gilchrist 
Ocean  Ins.  Co.  v.  Carrington 
V.  Francis 
V.  Polleys 
Odiorne  v.  Maxcy 
Odlin  V.  Greenleaf 


194 

168 

313 

36 

3 

28 

23,  347 

493 

469 

416,417 

137 

247 

V.  Ins.  Co.  of  Penn.      365,  366,  450 
0  d win  u.  Forbes  315 


/ 


1X1 1 


INDEX   TO    CASES    CITED. 


Page 

L.  X.  Wm.  Odwin  v.  John  Forbes 

311 

Ohl  V.  The  Eagle  Ins.  Co. 

329 

334 

Ogden  V.  Astor 

184 

V.  Barker 

365 

V.  Col.  Ins.  Co. 

410 

466 

V.  Fire  Ins.  Co. 

476 

V.  Gen.  Milt.  Ins.  Co. 

422 

475 

V.  N.  Y.  F.  Ins.  Co. 

450 

V.  Orr 

394 

V.  Saunders                 2 

15,  315 

316 

O'Kcefe  v.  Dunn 

126 

Okell  V.  Smith 

53 

O'Kesson  v.  Barclay 

28 

Oldham  v.  Turner 

266 

Ollivant  v.  Bayley 

58 

Oliver,  ex  parte 

279 

V.  Gray 

242 

V.  Greene 

412 

439 

V.  Maryl.  Ins.  Co. 

454 

Olivera  v.  Union  Ins.  Co. 

450 

451 

Olivcrson  v.  Brightman 

461 

Olmstead  v.  Beale 

29 

Olmsted  V.  Hotaihng 

152 

Olyphant  v.  Barker 

42 

Oneida  Man.  Co.  v.  Lawrence 
O'Niel  V.  Buffalo  Fire  Ins.  Co. 


58 
501,  503, 
506 
Onondaga  Co.  Bank  v.  De  Puy  179 


Ontario  Bank  v.  Schermerhorn 
Oom  V.  Bruce 
Oppenheim  v.  Eussell 
Oppenheimer  v.  Edney 
Orange  County  Bank  v.  Browu 


263 

437 
62 

227 
223,  225, 

226 

320 
5 

116 
394, 395 

311 
110,  111 


Orcutt  V.  Nelson 
Ordinary  v.  Wherry 
Oriental  Bank  v.  Blake 
Orne  v.  Townsend 
Orr  V.  Am  cry 

V.  Maginnis 
Orrok  V.  Commonwealth  Ins.  Co.  466, 467 

Orvis  I'.  Kimball  5 

Osborne  v.  Horner  136 

Ossulston  V.  Yarmouth  269 

Ostrander  v.  Brown  208 

Otis  V.  Lindsey  268 

Ottman  v.  Moak  8 

Oulds  V.  Harrison  102 

Ouston  V.  Hebden  335 

Outwater  v.  Dodge  48 

Owens  V.  Denton  80 

Owen  V.  Thomas  22 

Owings  V.  Hull  137 
Owsley  V.  Woolhopter                    138,  185 

Oxford  Bank  v.  Haynes  70 

Oxnard  v.  Dean  389 


Pack  V.  Thomas 

117 

Packard  v.  Getraan 

226 

V.  Kichardson 

77 

Packard  v.  The  Louisa  345, 385 
Paddock  v.  Franklin  Ins.  Co.        414,  425, 

426, 427 

Padelford  v.  Boardman  371,  482 

Page  V.  Baner  301 

V.  Carpenter  189 

ex  parte  279 

V.  Trufant  26 

Paige  V.  Ott  30 

V.  Stone  142,  149 

Pain  V.  Packard  69 

Paine  v.  Thacher  183 

Paine's  case  10 

Palm  V.  Medina  Fire  Ins.  Co.  492 

Palmer  v.  Penning  454,  457 

V.  Gracie  360 

V.  Lorillard  347,  365,  366 

V.  Marshall          '  454,  457 

V.  Merrill  554 

V.  Pratt  .                 86 

V.  Stephens  147,  148,  169 

Palyart  v.  Leckie  437 

Panger  i\  Cary  102 

Paper  u.  Birkbeck  124,131 

Paradise  v.  Sun  Mut.  Ins.  Co.  439 

Parage  v.  Dale  465 

Pardee  v.  Drew  226 

Park  r.  Hammond  156,459 

Parker  v.  Adams  228 

V.  Baker  9 

V.  Barker  66 

V.  B  ranker  161 

z;.  Cousins  191,194 

V.  Crole  290, 309 

r.Flagg  214 

V.  Gordon  108,  109 

V.  Macomber  184,  191 

V.  Manning  300 

V.  Norton  290,  309 

V.  Piston  189,  190 

V.  Ramsbottom  255,  256,  260 

V.  Wells  284 

et  al.  V.  Muggridge  et  al.  305 

Parkhurst  v.  Smith  15 

Parkin  y.  Dick  416 

V.  Moon  102 

Parkinson  v.  Lee  57.  58 

Parkist  v.  Alexander  155 

Paiks  V.  Gen.  Int.  x\ss.  Co.  512 

V.  Hall  44 

Parish  v.  Crawford  360 

Parmeterw.  Todhunter  468 

V.  Cousins  459 

Parr  v.  Eliason  256 

ex  parte  294 

Parslow  V.  Dcarlove  289 

Parson  v.  Sexton  58 

Parsonage  Fund  v.  Osgood  239 

Parsons  v.  Briddock  65 

V.  Hardy  208,  351 

V.  Mass.  F.  &  M.  Ins.  Co.        460 

V.  Monteath  214,  221,  224 

V.  Webb  141 


INDEX   TO    CASES    CITED. 


Ixiii 


Page 

Page 

Parsons  v.  "Woodward 

49 

Pelayo  v.  Fox 

354 

Patapsco  lus.  Co.  v.  Biscoe 

410 

Peltier  v.  Collins 

17 

V.  Coulter  410 

442 

,527 

Pcnn  V.  Lord  Baltimore 

27 

V.  Smi 

th 

149 

404 

,436 

Pcnno(;k  v.  Swayne 

183 

V.  Souths 

ate 

377, 

464, 

Pennoyer  v.  Hallet 

361 

468 

Penny  v.  N.  Y.  Ins.  Co.          372 

,  470 

482 

Pate  V.  Henry 

205 

Penobscot  Boom  Co.  v.  Baker 

196 

Paterson  v.  Black 

548 

Penoyer  v.  "Watson 

185 

V.  Gandasequi  149, 

162, 

163 

436 

Pentz  V.  Receivers  of  iEtna  Pire 

Ins. 

Patience  v.  Townley 

106 

Co. 

510 

526 

Patman  v.  Vaughan 

285 

People  V.  Gasherie 

157 

252 

Patrick,  ex  parte 

263 

V.  Sliall 

25 

Patron  v.  Silva 

365 

366 

Percival  v.  Blake 

53 

Patten  v.  Browne 

284 

V.  Hickey 

• 

416 

V.  Fullerton 

162 

V.  Frampton 

98 

Patterson  v.  Becher 

111 

V.  Maine  M.  M.  Ins.  Co. 

522 

V.  Black 

445 

Perez  v.  Miranda 

154 

V.  Brown 

244 

245 

Pcrham  i'.  Raynal 

241 

V.  Chalmers 

334, 

336 

337 

Perkins  v.  Bradley 

1.39 

V.  Eitchie 

469 

V.  Burbank 

233 

Pattlson  V.  Blanchard 

181 

V.  Eastern  &  B.  &  M.  R. 

R. 

Patton  V.  Calhoun 

190 

Co. 

228 

V.  Schooner  Randolph 

338 

V.  Hill 

345 

Paul  V.  Birch 

360, 

361 

V.  Kempland 

289 

V.  Dowling 

284 

V.  New  Eng.  Mar.  Ins. 

Co. 

419, 

%.  Jones 

309 

420 

Pawling  V.  Pawling 

268 

V.  "U^'ashington  Ins.  Co. 

492 

Pawon  V.  Barnevelt 

496 

Perle  v.  Merch.  Ins.  Co. 

466 

Pawson  V.  Watson          429, 

431, 

432, 

434 

Perley  v.  Balch 

37 

Payne  v.  Cave 

19 

Perrin  v.  Protection  Ins.  Co. 

527 

V.  Cutler 

151 

Perring  v.  Hone  ' 

177 

V.  Hutchinson 

459 

Perry  v.  Hudson 

137 

138 

I'.  Trezevant 

257 

V.  Jackson 

176 

247 

Paynter  v.  "Williams 

39 

V.  Ohio  Ins.  Co. 

372 

Payson  v.  "Whitcorab 

109 

V.  Osborne 

360 

Peacock  v.  Peacock 

169 

Perry  Co.  Ins.  Co.  v.  Stewart 

504, 

507, 

V.  Rhodes 

47 

532 

Pearce  v.  Chamberlain 

170 

Perth  Amboy  Manuf.  Co.  v.  Condit 

149 

V.  Davis 

92 

Peter  v.  Beverly 

82 

in  re 

281 

V.  Compton 

75 

Pearpoint  i\  Graham 

169, 

174 

277 

Peters  v.  Anderson 

83 

Pearsall  v.  Dwight 

318 

323 

V.  Ballister 

76 

Pearse  v.  Green 

157 

V.  Ballistier 

141 

381 

Pearson  i'.  Gi\rrett 

86 

V.  Brown 

242 

V.  Graham 

158 

V.  Pel.  Ins.  Co. 

516 

V.  Keedv 

185 

186 

V.  Farnsworth 

141 

V.  Rockhill 

276 

V.  Fleming 

7 

Pease  v.  Hirst 

6S 

,  98, 

185 

241 

I'.  Warren  Ins.  Co. 

374 

446 

Peck  V.  Evans 

224 

Peto  V.  Hague 

152 

V.  Hazier 

96 

322 

323 

Peyroux  v.  Howard 

401 

402 

V.  Jenness 

296 

Pezant  v.  Nat.  Ins.  Co. 

465 

466 

V.  Neil 

207 

Phelps  V.  Townsend 

32 

V.  New  London  Co 

.  Mut.  I 

ns. 

V.  Williamson 

347 

354 

Co. 

521 

V.  Worcester 

7 

Pecks  V.  Mayo 

95 

321 

Philbrook  v.  Belknap 

72 

Peebles  v.  Stephens 

26 

Philips  V.  Astling 

117 

Peele,  ex  parte 

178 

Phillips  V.  Barber 

440 

V.  Northcote 

159 

V.  Bateman 

27 

V.  The  Merchants' 

Ins.  Co 

469, 

V.  Bistolli 

76 

470 

476 

V.  Bridge 

186 

Peirce  v.  Ocean  Ins.  Co. 

377 

469 

V.  Clagett 

176 

V.  Pender 

114 

V.  Cockayne 

256 

V.  Rowe 

268 

V.  Cook 

189 

190 

Ixiv 


INDEX   TO    CASES    CITED. 


•    Pajre 

Phillips  V.  Eastwood  551 

r.  Gould  112 

V.  Hcadlam  399 

V.  Knox  Co.  Mut.  Ins.  Co.  508, 512 

V.  Lcdley  326,  339 

V.  Phillips  173 

V.  Purington  334 

V.  Rodie  345 

V.  Scattergood  402 

V.  Williams  252 

Philpott  V.  Jones  83 

Phipps,  c.r  parte  284 

Phipson  V.  Knellcr  118 

Phoenix  i'.  Assignees  of  Ingrahani         281 

Fire  Ins.  Co.  i\  Gurnee  407 

Phyn  V.  The  Roy.  Exch.  Ass.  Co.       442, 

448,  455 

Pickard  v.  Valentine  248 

Pickering  v.  Banks  258 

V.  Busk  135,  136,  141,  142 

V.  Dawson  21 

V.  risk  322 

V.  Pickering  136 

Pickford  r.  The  Grand  Junction  Pail- 


way  Co. 

Pick  in  V.  Graham 

Pickman  )'.  Woods 

Pigott  V.  Bagley 

Pierce  i'.  Jackson 

V.  Patten 

V.  Tobey 

V.  Trigg 

Pierson  v.  Hooker 

Pike  V.  Bacon 

V.  Irwin 

V.  McDonald 

V.  Street 

V.  Warren 

Pillans  V.  Van  Mierop 

Pillow  V.  Hardein^n 

Pilot-boat  Washington  v.  The  Saluda   400 

■  Plndall  «.  The  Northwestern  Bank         90 


204,  205 
120 

348,  360 
170 

185,  186 

392, 393 

241 

171 

22,  176 

176 

66 

293 

124 

241 

26,  132 

116 


Pinkertoii  v.  Bailey 
Pinkham  v.  Macy 
Pinkney  v.  Ilagadorn 

V.  Hall 
Pinney  v.  Wells 
Pipon  V.  Cope 

V.  Pipon 
Pitkin  V.  Brainerd 

V.  Pitkin 

V.  Thompson 
Pitman  v.  Hooper 

V.  Kintncr 

Pitts  V.  Mower 

Pittsburgh  v.  Whitehead 

Place  V.  Swcetzer 

Planch6  v.  Fletcher 

Planters'  Bank  v.  Sharp 

V.  Snodgrass 
I'.  White 

Piatt  V.  Hibbard 


102 
112 
146 
175 
348 
448 
311 
360 
170 
11 
354,385,  388,389, 
390,  391 
147 
159 
150 
190 
318 


316 

255 

116 

197,  205 


Pleagants  v.  Maryland  Ins.  Co.  421 

Plestoro  V.  Abraham  311,  313 

Plots  V.  Johnson  89 

Plimmer  v.  Sells  12,  136 

Plomer  v.  Long  83 

Pluckwcll  V.  Wilson  229 

Plummer  v.  Russell  136 

V.  Wildman  371,  372,  482 

Poindexter  v.  Waddy  178 

Poland  V.  Glvn  281 

Polglass  V.  Oliver  81,  90 

Polhill  V.  Walter  131,  147 

Pollard  V.  Baylors  256,  257 

V.  Cocke  295 

V.  Stanton  166 

Pollock  V.  Babcock  409,  452 

V.  Stables  155 

Pomeroy  v.  Donaldson  202 

Pomroy  v.  Kingsley  295 

Pond  V.  Smith  •    418 

V.  Underwood  150 

Ponder  v.  Carter  '  249 

Pool  V.  Pratt  9 

Poole  V.  Protection  Ins.  Co.  422 

Pope  V.  Nickerson  380,  385 

V.  Onslow  299^300 

Poplewell  V.  Wilson  98 

Pordage  v.  Cole  44 

Port  V.  Turton  284 

Porter  v.  Andrews  389,  391 

V.  Bank  of  Rutland  150 

V.  Cocke  295 

V.  Judson  119 

V.  Hildebrand  226 

V.  Langhorn  73 

V.  M'Clure  164 

V.  Munger  252 

r.  Patterson  161 

V.  Taylor  193 

Porthouse  v.  Parker  117 

Portland  Bank  v.  Hyde  183 

V.  Stacey  331 

V.  Stubbs  332,  351 

Pott  V.  Bevan  138 

V.  Clegg  237 

V.  Eyton  167,168,386 

V.  Turner  284 

Potter  I'.  Brown  311,  315 

V.  Coward  42 

V.  Mar.  Ins.  Co.  420 

V.  Moses  169 

V.  Ocean  Ins.  Co.  372,  482 

V.  Ontario  Ins.  Co.  517 

V.  Prov.  Wash.  Ins.  Co.     467,  487 

V.  Sanders  20 

V.  Sturo;cs  157 

V.  Suffolk  Ins.  Co.  443 

V.  Washington  Ins.  Co.  373 

V.Yale  College  261 

Post  V.  Hampshire  Mut.  Fire  Ins.  Co.  530 

V.  Kimberly  164 

V.  Robertson  348 

Postmaster- General  v.  Reeder  67 


INDEX   TO    CASES    CITED. 


Ixv 


Page 

Postlctlnvaite  ;;.  Garrett 

258 

261 

Poultoii  V.  Lattimorc 

5.3 

Powell  V.  Brown 

26 

V.  Hoyland 

56 

V.  Jones 

129 

V.  Monnier 

128 

129 

V.  Myers 

207, 

226 

r.  Tlie  Trnstccs  o 

'  Newburg 

155 

V.  Tiittle 

155 

V.  Waters 

258 

266 

Power  r.  Whitman 

372 

V.  Whitmore 

370 

482 

Powles  V.  Innes 

408 

V.  Page 

149 

150 

Pownall  V.  Ferrand 

38 

Pratt  V.  Adams 

255,  259 

262 

V.  Cuff 

390 

V.  Parkman 

50 

V.  Willey 

259 

Pratt's  case 

279 

Pray  v.  Stinson 

392 

Prebble  v.  Boyherst 

27 

Prendergrast  v.  Foley 

245 

Prentiss  v.  Savage 

321 

V.  Sinclair 

172 

Prescott,  ex  j>arte 

294 

V.  Flinn 

142 

V.  Parker 

252 

Preston  v.  Finney 

30 

u. 'Jackson 

258 

V.  Mercean 

21 

Prestwick  v.  Marshall 

12, 

136 

Price  V.  'Alexander 

176 

V.  Easton 

37 

V.  Hewitt 

8 

V.  Lea 

76 

V.  Neale 

129 

V.  Noble 

369 

481 

V.  Powell 

210, 

211 

V.  Ralston 

302 

V.  Sharp 

127 

V.  Upshaw 

244 

Priddey,  ex  parte 

286 

Primrose  v.  Bromley 

298 

Prince  v.  Clark 

155 

Prideaux  v.  Collier 

118 

Pringle  v.  Phillips 

123 

Pritcliard  v.  Draper^ 

193 

Pritciiet  V.  Insurance  Co. 

of  North 

America 

409 

Proctor  V.  Moore 

315 

Profert  v.  Parker 

77 

Proprietors  of  Trent  Navi 

gation  V. 

Wood 

213 

Pudor  V.  Boston  &  Me.  E 

.  E. 

227 

Puget  De  Bras  v.  Forbes 

97 

Pugh  V.  Bussell 

316 

V.  Duke  of  Leeds 

459 

Pulling  V.  Tucker 

281 

Pulsifer  v  Hotchkiss 

37 

Pultney  v.  Keymer 

159 

Purdy  V.  Powers 

184 

Purviance  v.  Angus 

473 

Pa^e 

Purvis  V.  Tunno  363 

Putnam  v.  Dutch  331 

V.  Mercantile  Mar.  Ins.  Co.    413, 

439,  513 

V.  Sullivan  105 

V.  Wood  426 


Q. 


Quackenbush  i'.  Sanks  316 

Quantock  v.  England  250 

Quarles  v.  Brannon  257 
Quebec  Fire  Ins.  Co.  v.  St.  Louis         510 

Queen  v.  Un.  Ins.  Co.  465 

Quelin  r.  Morrison  311 

Quimby  v.  Putnam  241 


K. 


Radley  v.  Manning  256 
Rafferty  v.  New  Brunswick  Fire  Ins. 

Co.  502,  503 

Raggy.  King  385 

Railroad  Co.  v.  Yeiser  228 

Raine  v.  Bell  456 

Raleigh  v.  Atkinson  162 

Ralph  y.  Harvy  165 

Ralston  v.  State  Rights  382,  383 

Ramsay  v.  Gardner  155 

Ramsbottom  w.  Lewis  191 

Ramsdale  v.  Horton  90 

Ramsdell  v.  Sigerson  277 

Rand  v.  Hubbard  127 

V.  Mather  74 

Randall  v.  Lynch  364 

V.  Sweet  7 

V.  Van  Veehten  148 

V.  Wilkins         ,  246 

Randolph  v.  Ware  405 

Ranger  v.  Cary  102 

Ransom  u.  Mack  107,114 

Rapelye  v.  Anderson  266,  267 

V.  Mackie  48 

Raphael  v.  Pickford  208 

Rapp  V.  Latham  180 

Rathbun  v.  Ingalls  157 

V.  Payne  227,  228,  383 

Raw  V.  Alderson  143 

V.  Cutten  298 

Rawlinson  v.  Clarke  168 

V.  Pearson  284 

V.  Stone  127 

Rayliffe  v.  Butterworth  155 

Raymond  v.  Crown  &  Eagle  Mills         149 

V.  Loyl  7 

Read  v.  Bonham  377,  468, 470 

ex  parte  292,  299 

V.  Fairbanks  333 

V.  Rann  162 

V.  The  Hull  of  a  New  Brig        401 

Reade  v.  Com.  Ins.  Co.  378,  482 


/ 


Ixvi 


INDEX   TO   CASES   CITED. 


Page 
Real  Estate  Mut.  Fire  Ins.  Co.  v. 

Koesslo  404,  49.3 

Redhead  ?;.  Cator  70 

Redmond  v.  Smith  409 

Reed  v.  Can  field  392,  393 

V   Cole  408 

V.  Evans  77 

V.  Howard  189 

V.  Shcpardson  187,  189 

V.  Srnitli  258 

V.  Tiie  Royal  Ex.  Ass.  Co.  549 

V.  White  194,  336,  338 

Rees  V.  Warwick  129 

Reedside  r.  Knox  87 

Reeve  v.  Davis     •  360 

Rcgina  v.  Eirch  85 

Reid  V.  Darby  333,  377 

V.  HoUingshead  168,  174 

V.  McNaughton  241 

V.  Morrison  104 

V.  Rensselaer  Glass  Factory  251,  252 

Reimer  v.  Rintrrose  422 

Relf  et  al.  v.  Tiie  Maria  395 

Renaux  v.  Teakle  136 

Reno  ('.  Ilogan  '225 

Renteria  v.  Huding  '            345 

Renwick  v.  Williams  291 

Rep|)lier  v.  Orrieh  277 

Retty  w.  Anderson  12 

Rex  V.  Allen  256 

V.  Almon  154 

V.  Dr.  Hay  547 

V.  Elliott  88 

V.  Gutrh  154 

V.  Huggins  154 

V.  Magi^ott  129 

Reybold  y.  Jefferson  183 

Reynolds  v.  Cleaveland  179 

V.  Doyle  249 

ex  parte  297,  299 

V.  Magness  24 

V.  Ocean  Ins.  Co.  368,369,  466, 

481,  484 

V.  Toppan  216,  360,  382 

Rhinelander  v.  The  Ins.  Co.  of  Fenn.  450, 

469,  477 

Rhode  V.  Thwaites  48 

Rliodcs,  ex  parte  100 

Rice  V.  Barnard  186 

V.  Bixler  27 

V.  Gove  146 

V.  Hayllet  387 

V.  Homer  453,  468 

V.  Mather  266 

V.  N.  Eng.  Mar.  Ins.  Co.       431,  433 

i\  Shute  166 

V.  Tower  408,  533 

i;.  Welling  256 

Rich  V.  Coe  360 

V.  Lambert  344,  355 

V.  Parker  423 

V.  Tojiping  260 

Richards  v'.  Brown  254,  263 


Page 
Richards  v.  Davies  182 

V.  Prot.  Ins.  Co.  477 

V.  Richards  1 1 

V.  Sears  29 

V.  The  London,  &c..  Railway 

Co.  211,226 

V.  The  Marine  Ins.  Co.  458 

V.  The  Maryland  Ins.  Co.      301 

Richardson  v.  Anderson  146 

V.  Bank  of  England  183 

V.  Clark  332 

ex  parte  288 

V.  Fen  232 

W.French  179 

V.  Gooding  306 

V.  Hastings  182 

in  re  282 


V.  Jackson 

81 

V.  Jones 

299 

V.  Kimball 

50 

V.  Lincoln 

124 

V,  Maine  Ins.  Co. 

365,366, 

409,417,  449,452,453 

V.  Mellish  28 

V.  Strong  286 

V.  Whiting  381 

Rickards  v.  Murdock  430 

Ricker  v.  Cross  331 

Rickford  v.  Ridge  91,  108 

Rickman  v.  Carstairs  437,  460 

Rider  v.  Ocean  Ins.  Co.  412 

Riddle  v.  Varnum  48 

Ridge  V.  Prather  295 

Ridglcy  V.  Crandall  4 

Ridley  v.  Gyde  281 

Ridout  V.  Brough  292 

Rigden  v.  Pierce  171 

Riggs  V.  Dooley  247 

V.  Murray  276,  277 

Right  V.  Cuthell  138 

Riley  v.  Delafield  440 

V.  Hartford  Ins.  Co.        "  409 

V.  Home  205,  22S 

Ring  V.  Franklin  339 

Ripley  v.  Gelston  150 

Risdale  v.  Newnham  424 

Ritchie  v.  Atkinson  358 

Roach  V.  Quick  11 

V.  Thompson  93 

Roads  V.  Symmes  295 

Robb  V.  Stevens  186 

Kobbins  v.  Bacon  554 

V.  Cooper  186 

V.  Eaton  5 

V.  Farley  236 

V.  N.  Y.  Ins.  Co.  419 

Roberts  v.  Chenango  Co.  Mut.  Ins.  Co. 

496,  521 

V.  Filler  183 

V.  Havelock  37 

V.  Holt  353 

V.  Peake  86 

V.  Tremavne  226,  256 


INDEX    TO    CASES    CITED. 


Ixvu 


Pa^e 

Roberts  v.  Tremoille 

263 

V.  Turner 

203 

Robertson  v.  Bethune 

362 

V.  Clarke 

377 

V.  Ewer 

438 

V.  French 

4.58,  497 

r.  Kennedy 

199,  200 

V.  Kensington 

124 

V.  Ketchum 

137, 141 

V.  Marjoribanks 

432 

V.  Stewart 

295 

V.  Vaughn 

78 

Robinson  v.  Alexander 

244 

V.  Ames 

103 

V.  Baker 

212 

V.  Bland    95,  318,  319 

,321,322 

V.  Commonwealth  Ins 

Co.  377, 

422, 466 

V.  Cook 

81 

V.  Cone 

228 

V.  Crowder 

175,311 

V.  Dunmore 

197,  227 

V.  Gleadow 

337 

V.  Hawksford 

91 

V.  Lyall 

379 

V.  Maedonnell 

330 

V.  Mansfield 

295 

V.  Manufacturers'  Ins. 

Co.    411, 

418 

V.  Marine  Ins.  Go.  3.52 

,357,454 

V.  Musgrove 

53 

V.  Nahon 

137 

V.  Reynolds 

97,  129 

V.  Taylor 

191 

V.  Thompson 

177 

V.  Tobin         » 

406 

V.  Yarrow 

129, 142 

Robson  V.  Bennett 

91 

V.  Calze 

309 

Rocher  v.  Busher 

378 

Rochford  v.  Hackman 

285 

Rockwell  V.  Hubbell 

316 

i\  Wilder 

181,  182 

Rockwood  i\  Browne 

235 

Rodes  V.  Blythe 

268 

Rodick  V.  Hinckley 

335 

Roff  U.Miller 

85 

Rogers  v.  Batchelor 

180 

V.  Boehm 

158 

V.  Bumpass 

10 

V.  Earl 

16 

V.  Forresters 

363 

V.  Head 

197 

V,  Hunter 

364 

V.  Hurd 

4,  5 

V.  Kneeland 

155 

V.  March 

163 

V.  Mechanics'  Ins.  Co. 

15 

V.  Stephens 

110,  119 

V.  The  Rival 

383 

V.  Thomas 

*       63 

V.  Traders'  Ins.  Co. 

405 

V.  White 

160 

Robl  V.  Parr 

Kolin  V.  Steward 

Rollins  V.  Columbian  Fire  Ins.  Co. 


533 


V.  Stevens 
Rondeau  v.  Wyatt 
Roof  V.  Stafford 
Roots  r.  Lord  Dormer 
Roosevelt  v.  Kellogg 
Booth  V.  Wilson 
Roscoria  v.  Thomas 
Rose  V.  Daniel 
V.  Dickson 
V.  Hart 
V.  Sims 
Rosetto  17.  Guerney 

V.  Gurney 
Ross  V.  Bradshaw 
V.  Hill 
V.  Hunter 
V.  Ross 

V.  Ship  Active 
V.  Thwaite 
V.  Thwaites 
V.  Walker 
Rossiter  v.  Chester 
V.  Rossiter 
Rotch  V.  Edie 
Rothschild  v.  Currie 
Rothwell  V.  Humphreys 
Routh  V.  Thompson 
Routledge  v.  Burrell 
V.  Grant 
?'.  Ramsay 
Roux  I'.  Salvador 
Row  V.  Pulvcr 
Rowe  V.  Tipper 
Rowland  v.  Bull 
Rowlands  v.  Springett 
Rowlandson,  ex  parte 
Rowley  v.  Bigelow 

V.  Gibbs 
Rowton,  ex  parte 
Royal  Bank  of  Scotland,  &e.,  v 

Cutbbert  (Steius's  case) 
Ruan  V.  Gardner 
Ruciier  v.  Conyngham 
Rucker  v.  Camoneyer 
V.  Allnutt 
V.  London  Ass.  Co. 
Ruding  V.  Smith 
Ruff  V.  Bull 
Ruffin,  ex  parte 
Rufford,  ex  parte 
Ruggles  V.  Bucknor 

t'.  Gen.  Int.  Ins.  Co. 
V.  Kceler 
Rundell  v.  Keeler 
Rundle  v.  Moore 
Runyan  i\  Caldwell 
Rusl)y  V.  Scarlett 
Russel  V.  Langstaffe 
Russell  V.  Austwick 


100, 


349. 


196, 
448, 


380. 


351, 


406, 


462,  464, 469, 


63,  346, 


186, 


430, 
95,  247, 


105, 


444 
130 
.531, 
534 
176 

78 
4 

53 
324 
198 

29 
9 
259 
292 
292 
349 
422 
556 
197 
455 
235 
482 
480 
438 
378 
367 
142 
450 

95 
179 
436 
422 

19 
236 
473 

69 
116 
263 
113 
168 
415 
252 
302 

311 
437 
340 
161 
461 
460 
318 
245 
191 
294 
360 
431 
323 
7 
154 
197 
137 
126 
184 


Ixvili 


INDEX   TO    CASES   CITED. 


Page 

Russell  V.  Bangley  14G,  153,  161 

V.  Bell  292 

V.  Degrancl  415,  452 

V.  Perkins  65,  68 

V.  The  N.  E.  Mar.  Ins.  Co.        405 

V.  Union  Ins.  Co.  414,  443 

V.  Wiggin  129 

Eybery  v.  Snell  50 

Eyan  v.  Hall  23,  107 

V.  Sams  137 


S. 


Sacrider  ii.  Brown  1 1 1 

Sadler  u.  Evans  150,151 

V.  Leigh  148,  282 

V.  Nixon  183 

Sadler's  Co.  v.  Babcock  531 

Sage  V.  Middletown  Ins.  Co.  461,  482 

V.  Wilcox  77 
Sager  v.  The  Portsmouth,  &c.,  Rail- 
road Co.                                  205,  222,  225 

Salem  Bank  v.  Gloucester  Bank  140 

Salisbury,  ex  parte  299 

Salkeld,  ex  parte  284 

Sally  V.  Capps  157 

Salte  V.  Field  64,  143 

Salter  v.  Burt  107 

Salters  v.  Everett  136 
Saltmarsh  t'.  Planters'  and  Mechanics' 

Bank  266 

Saltus  V.  Everett  135 

V.  Ocean  Ins.  Co.      349,  380,  422, 

474 

Samins  v.  Stewart  200 

Sampson  v.  Swift  26 

Samuel  v.  Roy.  Exch.  Ass.  Co.  462 

Sanborn  v.  French  27 

Sanders  v.  Vanzeller  353 

Sanderson  v.  Bell  153 

V.  Griffiths  137 

V.  M'CuUom  406 

Sandford  v:  Dodd  36 

V.  Trust  Fire  Ins.  Co.  493 

Sandilands  u.  Marsh  175 

Sands  v.  Church  259 

V.  Taylor  46 

Sanford  ?;.  Handy  142,152 

V.  Hayes                  •  239 

V.  Mickles  102 

V.  Ra-ikes  22 

Sangston  v.  Maitland  153 

The  Sarah  Ann  47 

Saratoga  R.  R.  v.  Row  56 

Sarchet  v.  Sloop  Davis  402 

Satterlee  v.  Grant  200 

V.  Groat  197 

Satterthwaite  v.  Mut.  Beneficial  Ins. 

Ass.  523 

Saul  V.  His  Creditors  319,  320 

Saufley  v.  Howard  166 

Saunders  v.  Fillcy  38 


Page 

Saunders  v.  Williams  311,  312 

Saundersou  v.  Jackson  77 

V.  Judge  109 

V.  Piper  88 

V.  Rowles]  285 

Saurez  v.  Sun  Mut.  Ins.  Co.  465,  467 

Savage  v.  Best  296 

V.  Carter  183 

V.  Pleasants  470 

V.  Rix  148 

Saville  v.  Campion  360 

V.  Robertson  178 

Savoye  v.  Marsh  315 

Sawyer  u.  Fisher  212 

V.  Joslin  61 

V.  The  Maine  F.  &  M.  Ins.  Co.  453 

Sayre  v.  Frick  117 

Scaife  V.  Tobin  353,  374 

Scarpellini  v.  Atchison  10 

Schermerhorn  v.  Loynes  179,  335 

SchiefFelin  v.  Harvey  473 

V.  N.  Y.  Ins.  Co.  470 

Schimmelpenich  v.  Bayard     128,  146,  155 

Schmaling  v.  Thomlinson  155 

Schmidt  v.  Blood  197 

V.  N.  Y.  Union  Mut.  Fire  Ins. 

Co.  529 

Schneider  v.  Geiss  227 

V.  Heath  143 

V.  Nofris  77 

Scholefield  v.  Eichelberger  170 

Schondler  v.  Wace  307 

Schooner  Wave  v.  Heyer  398 

Schultz  V.  Astley  126 

Schuyler  v.  Hoyle  10 

Scriba  v.  Ins.  Co.  of  N.  H.  460 

Scrimshirl  v.  Alderton  303 

Scott  V.  Buchanan  4 

V.  Colmesnill  172,  177 

V.  Surman  141 

V.  Haddock  245,  246 

V.  Irving  146,  153,  161 

V.  Lewis  258 

V.  Libby  361,366 

r.  Lifford  114 

V.  Lloyd  254 

V.  Surnam  300,  302 

V.  The  Eastern  Counties  R.  Co.    44, 

76 

V.  Wells  48,  141 
Scotthorn  v.  The  South  Staffordshire 

Railway  Co.  218 

Scottin  V.  Stanley  336 

Scudder  v.  Andrews  37 

V.  Bradford  369,  479 

Scull  V.  Briddle  377 

Seabrook  v.  Rose  334,  338 

Seabury  v.  Hungerford  120,  122 

Seaman  v.  Fonereau  152,  430 

Seamans  v.  Loring  405,  454 

Scarle  v.  Keeves  76 
V.  Scovell              349,  373,  380,  474 

Scares  v.  Lincoln  107 


INDEX   TO    CASES   CITED. 


Ixix 


Sears  v.  Brink 

V.  The  City  of  Boston 
Seaver  v.  Morse 
Seawell  t'.  Henry 
Sebag  V.  Abitbol 
Seignior  and  Wolmer's  case 


Page 

77 

324 

36, 162 

90 

109, 131 

142 


Seidenbender  v.  Charles's  Admrs.  35 

Seixas  v.  Woods  57 

Selden  v.  Hendrlckson  379 

Selfridge  v.  Gill  309 

Selkrig  r.  Davis  311 

Selleck  v.  French  251 

Selway  v.  Fog-g  56 

V.  Holoway  226 
Seneca  County  Bank  v.  Schermcrhorn  255 

Sessions  v.  Richmond  264 
Settle  V.  St.  Louis  Perpet.  M.  &  F.  Ins. 

Co.  456 

Seton  V.  Del.  Ins.  Co.  473 

V.  Low  433 

Sewall  V.  Allen  205 

V.  Fitch  78 

V.  U.  S.  Ins.  Co.  466,  467 

Sexton  V.  Montgomery  Co.  Mut.  Ins. 

Co.  496,  497,  517,  521,  522,  525,  535, 536 

Seymour  v.  Davis  76 

V.  Marvin  263 

V.  Strong  255 

Shackleford  v.  Moriss  266 

Shaffer  v.  McMakin  296 

Shakeshaft,  ex  parte  289 

Shank,  ex  parte  400 

Shannon  v.  Owen  332 

Sharington  v.  Stratton  25 

Sharp  V.  Bailey  119 

V.  Gladstone  476 

Sharplcy  v.  Hurrel  262 

Shaver  V.  "White  189 

Shaw  V.  Allen  237 

V.  Arden  162 

ex  parte  288,  297 

V.  Gookin  381 

V.  Jakcman  289 

V.  Mitchell  306 

V.  Nudd  136 

V.  Picton  82,161 

V.  Reed  105 

V.  Robberds  502,  503,  527 

V.  Stone  160 

V.  Turnip  29 

Shawe  ?;.  Felton  411 

Shawhan  v.  Wherritt  296 

Shee  V.  Hale  285 

Sheehy  r.  Mandeville  194 

Sheels  V.  Davies  356 

Sheffield  Can.  Co.  v.  Shef.  &  R.  R. 

Co.  21 

Sheftall  V.  Clay  232 

Shelby  v.  Guy  96 

Shelden  v.  Benham  23,  107 
V.  Hartford  Fire  Ins.  Co.        497, 
520 

Sheldon  v.  Robinson  197,  201 


Shelton  v.  Braithwaite 

114 

V.  Bruce 

86 

V.  Pcndeton 

137 

V.  Tiffin 

324 

Shephci-d  v.  De  BernaLs 

352 

353 

Shepley  v.  Donis 

47 

V.  Waterhouse 

241 

Sheppard  v.  Taylor 

388, 

390 

Sheppards  v.  Turpin 

277 

Sherman  v.  Clark 

114 

V.  Fair 

534 

V.  Wakeman 

235,  236 

237 

V.  Withers 

243 

Shcrrill  v.  Hopkins 

96, 

315 

Sherwood  v.  Marwick 

152 

V.  Mcintosh 

395 

Shieffelin  v.  The  New  York  Insurance 

Co.  499 

V.  Stewart  269 

Shiells  V.  Blackburne  147,  156 

ShifFw.  Louis.  State  Ins.  Co.  486 

Sliindler  v.  Houston  ^76 

Shipman  v.  Horton  4 

V.  Thompson  143 

Shipton  V.  Thornton  349 

Shirreffu.  Wilks  178,180 

Shober  v.  Hauser  255,  257 
Shoemaker  u.  Benedict           180,  236,  241 

V.  Keely  290,  309 

Shoolbred  v.  Nutt  430 

Shore  v.  Bentall  426 

V.  Wilson  23 

Short  V.  M'Carthy  248 

V.  Skipwith  156 

Shotwell  V.  Murray  16 

Shuck  V.  Wight  256 

Shubrick  v.  Salmond  26 

Shultz  V.  Ohio  Ins.  Co.  349 

Shumway  v.  Reed  82 

Shurlds  V.  Tilson  172 

Shute  V.  Robins  103 

Shutford  V.  Borough  248 

Shuttleworth,  ear /wrfe  126 

V.  Stephens  89 

Sibbald  v.  Hill  430,  434 

Sibley  v.  Lumbert  240 

Sice  V-  Cunningham  107 

Sickles  V.  Mather  238 

Siebert  v.  Spooner  283 

Sigourney  v.  Drury  241 

V.  Lloyd  151 

V.  Munn  171,  173 

Sill  V.  Worswick  310 
Sillem  V.  Thornton          403,  496,  497,  504 

Sillick  V.  Booth  547 

Simmons  v.  North  16 

V.  Smith  42 

V.  Swift  44,  48 

Simms  v.  Clarke  90 

Simonds  v.  Union  Ins.  Co.  476 

V.  White  374,  477,  483,  486 

Simons  v.  Walter  252 

Simpson,  ex  parte  291 


Ixx 


INDEX  TO    CASES    CITED. 


Pas;e 

Page 

Simpson  v.  Fullenwider 

258 

Smith  V.  Bowles 

60 

V.  Hand 

383 

V.  Braine 

97 

V.  Ilart 

384 

V.  Bromley 

309 

V.  Henderson 

23 

V.  Brown 

23,  3 15 

V.  Ingham 

83 

V.  Brush 

260 

V.  Swan 

161 

V.  Buchanan 

311 

Sims  V.  Bond 

148,  149 

V.  Burnham 

165 

V.  Brittain 

157 

V.  Chester 

124,  129 

V.  Gondelock 

249 

V.  Clark 

123 

V.  Gurncy 

36S 

478, 481 

V.  Columbian  Ins.  Co. 

510,  512 

V.  Jackson 

387 

V.  Condry 

156,  383 

V.  Willing 

164,  252 

V.  Dann 

67 

Simson  v.  Cooke 

185 

V.  Dawson 

238, 244 

Sinders  v.  Brad  well 

12 

V.  Del.  Ins.  Co. 

470 

Singleton  v.  Lewis 

268 

V.  Dennie 

46 

Singstrom  r.  The  Hazard 

390 

ex  parte 

289 

Siordet  v.  Hall 

442 

V.  Evans 

8 

Sir  Robert  Howard's  case 

459 

V.  Field 

64 

Siter  V.  Morrs 

512 

V.  Forty 

240 

Sitler  V.  Walker 

189,190 

V.  Gordon 

2 

Sivewright  v.  Archibald 

17 

V.  Healy 

323 

Sjgerds  v.  Luscombe 

366,  367 

V.  Hill 

245 

Skeate  v.  Beale 

27 

V.  Hodson 

138 

Skidmore  v.  Dcsdoity 

440,  451 

V.  Home 

223 

Skiffken  v.  Wray 

60 

V.  Hubbs 

16 

Skillings  v.  Coolidgc 

176 

In  re 

280 

Skinner  v.  Brighton  &  Southcoast 

V.  Ins.  Co. 

509 

Railway  Co. 

220 

V.  Jameson 

193 

V.  Dayton 

170 

17.  Jeyes 

171 

V.  Gunn 

141 

V.  Kelly 

6 

r.  Somes 

407 

V.  Kerr 

176 

V.  Stocks 

148,  184 

V.  Kittridge 

99 

V.  Upshaw 

212 

V.  Knowlton 

548 

Skolefield  v.  Potter 

360,  388 

V.  Knox 

97,  291 

Skrine  v.  The  Hope 

335 

V.  Langdon 

191 

Slade  V.  Van  Vetchen 

157 

V.  Lascalles 

51,  156 

SI  alter  v.  Carroll 

192 

V.  Leard 

385 

Slaymaker  v.  Irwin 

17 

V.  Little 

112 

Sleat  V.  Fagg 

223,  224 

V.  Loyd 

83 

Sleath  V.  Wilson 

227 

V.  Lynes 

45 

Sleght  V.  Hartshorn 

423 

V.  Manuf.  Ins.  Co.       462 

463,  464 

Sleigh  V.  Sleigh 

118 

V.  Marsack 

100,  129 

Slipper  V.  Stidstone 

191 

V.  Martin 

380 

Sloan  V.  Sommers 

256 

V.  Mayo 

5 

Slosson  V.  DufF 

259 

V.  M'Clure 

85,  89 

Slubey  V.  Heyward 

76 

V.  Mead 

318 

Sluby  V.  Champlin 

232 

V.  Mercer 

92,  129 

Small  V.  Attwood 

57 

V.  Mullett 

114 

V.  Gibson              425, 

427 

428,  440 

V.  Newburyport  Ins.  Co. 

470 

V.  Moates 

360,  361 

V.  Odlin 

404 

V.  Dudley 

277 

V.  Oriell 

305 

Smallpiece  v.  Dawes 

12 

V.  Parsons 

316 

Smart  v.  Sandars 

143 

161,  162 

V.  Pickering 

100 

Smedcs  v.  Utica  Bank 

144 

V.  Pierce 

203 

Smethurst  v.  Taylor 

135 

V.  Plummer 

381 

Smith  V.  Algar 

28 

V.  Robertson 

469,  477 

V.  Argall 

195 

V.  Saratoga  Co.  Mut.  Fire 

Ins. 

V.  Atkins 

49 

Co.                             531 

532, 534 

V.  Baily 

175 

V.  Scott 

284 

V.  Barrow 

182, 191 

I".  Seward 

202 

V.  Bell 

466 

V.  Shepherd 

215 

V.  Bowditch  Mut.  Fir 

c  Ins.  Co.  496, 

V.  Sievcking 

353 

512 

V.  Sleap 

150 

INDEX   TO    CASES   CITED, 


Ixxi 


Page 

Smith  V.  Smith  315 

V.  Spinolla  9G,  322,  323 

V.  Steamer  Eastern  R.  R.  402 

V.  Stokes  305 

V.  Surman  7G,  78 

V.  Surridgc  455 

V.  Swift  398,  399 

V.  Tarlton  1G5 

V.  The  Brooklvne  387 

V.  The  Heirs  of  Bond  246 

V.  The  Stewart  387,  388 

V.  Thorn  236 

V.  Treat  395 

V.  Watson  168 

V.  Weed  27 

V.  Westmoreland  239 

V.  White  143 

V.  Wilson  23,  361 

V.  Winter  192 

V.  Wright  370,  480 

Smout  V.  Ilbery  143,  147,  148 

Smyrl  v.  Niolon  215 

Smyth  V.  Anderson  149,  162 

Snaith  v.  Burridge  174 

V.  Mingay  93 

Snce  V.  Prescot                         ,  101 

Snell  V.  Delaware  Ins.  Co.  411 

V.  Rich  399 

V.  The  Brig  Independence  398 

Snellgrove  v.  Hunt  301 

Snelling  v.  Lord  Hunting-field  75 

Snoddy  v.  Cage  247 

Snodgrass's  Appeal  186 

Snow  V.  Eastern  R.  R.  Co.  227 

V.  Perry  81,  90 

Snowball  v.  Goodricke  152 

Snowdon  v.  Davis  150 

Snyder  v.  Farmers'  Ins.  Co.  496 

Soares  v.  Thornton  448 

Sodergren  v.  Flight  345 

Solarte  v.  Palmer  1 1 2 

Sollers,  ex  parte  302 

Solly  V.  Rathbone  155,  159 

Solomon  i-.  Kimmel  26 

Solomons  v.  Dawes  138 

V.  Ross  310,  311 

Somerville  r.  Somerville  318 

Somes  V.  Sugrue  377 

Soome  V.  Gleen  262 

Sorbe  v.  Merchants  Ins.  Co.  437 

Sortwell  V.  Hughes  320 

Souch  V.  Strawbridge  78 

Sonldcn  v.  Van  Rensselaer  422 

Soule  V.  Dougherty  141 

Southard  v.  Steele  176 

South  Carolina  Bank  v.  Case  169,  177 

Southcombe  v.  Merriman  559 

Southwick  ?;.  Estes  152 

V.  Packet-boat  Clyde  402 

Spafford  v.  Dodge         365,  369,  372,  373, 

390,  482,  483 

Spalding  r.  Ruding  63 

I'.  Vandercook  37 


Sparhawk  v.  Buell 

Page 
4 

V.  Russell 

193 

Sparr  v.  Wellman* 

227 

Sparow  V.  Carruthers 

460 

Spear  v.  Ladd 

140 

V.  Travers 

45 

Spears  v.  Hartley 

250 

Speed  V.  Phillips 
Speights  17.  Peters 

27 
171 

Spencer  v.  Cone 

78 

V.  Eustis 

397 

398 

V.  White 

353 

V.  Wilson 

143 

Speyer  v.  N.  Y.  Ins  Co. 
Spies  V.  Gilmore 

482 
121 

V.  Newberry 
Spindles  v.  Atkinson 

112 

16 

Spitta  V.  Woodman 

458,  459 

467 

Spring  V.  Gray 

233, 243 

244 

V.  South  Carolina  Ins.  Co.         139 

Springer  v.  Hutchinson  65 

V.  Shirley  194 

Sproat  V.  Donnell  360 

V.  Mathews  129,  131 

Spruill  V.  North  Car.  Mut.  Life  Ins.     528, 

546 

Staats  V.  Howlett  68,  77 

Stables  v.  Eley                 "  227 

Stacey  v.  Franklin  Fire  Ins.  Co.  491, 

,  495,517 

Stackpole  v.  Simon  556 

Stadt  V.  Lill  26 

Stafford  v.  Bryan  236 

V.  Richardson  248 

Stainback  v.  Rae  383 

Stainbank  v.  Penning  340 

V.  Shepard  144 

Staines  v.  Planck  291 

Stalker  v.  M'Donald  151 

Stanley  v.  Gaylord  46 

V.  Kempton  257 

Stanton  v.  Bell  197 

V.  Eager  415 

V.  Small  55 

Stapilton  v.  Stapilton  28 

Starbuck  v.  New  England  Mar.  Ins. 

Co.  426 

Stark  V.  Parker  29 

Stark  Co.  Mut.  Ins.  Co.  v.  Hurd  518 

Starr  v.  Goodwin  332 

V.  Knox  339 

V.  Robinson  316 

State  V.  Gaillard  26,  57 

V.  Sugg  157 

State  Bank  v.  Cowan  255 

V.  Hunter  264 

V.  Seawell  246 

V.  Wooddy  239 

State  of  Illinois  v.  Delafield  123,  141 

Stead  V.  Salt  176 

Steadman  v.  Duhomel  93 

Steamboat  Orleans  v.  Phoebus  335 

Stearns  v.  Haven  167 


Ixxii 


INDEX   TO    CASES   CITED. 


Page 

Page 

Stcbbins  v.  Globe  Ins.  Co. 

491, 

496, 

520, 
521 

Stone  V.  Nichols 
V.  Peacock 

235 

48 

V.  Smith 

27 

V.  Seymour 

82 

Stcilman  v.  Martinnant 

292 

V.  Vance 

23 

Steele  v.  llarmer 

128 

V.  Waitt 

208 

V.  Ins.  Co. 

512 

V.  Wood 

147 

V.  Tliachcr 

395 

Stoney  v.  Amer.  Life  Ins.  Co. 

259 

V.  Whipple 

258 

Stoolfoos  r.  Jenkins 

8 

Steiglitz  V.  Egginton 

138 

Stopilton  V.  Stopilton 

27 

Stein  V.  Yglesias 

102 

Storer  v.  Gordon 

361 

Steinbank  v.  Shepard 

341 

Storm  V.  Stirling 

88 

Steinnietz  v.  U.  S.  Ins.  Co. 

334 

Storr  V.  Crowley 

207 

,208 

Stephens  v.  Badcock 

150 

156 

157 

V.  Scott 

73 

V.  Bcal 

10 

Storrs  V.  Barker 

16 

V.  Foster 

151 

Story  V.  Livingston 

269 

Stephenson  v.  Hart 

208 

V.  Lord  Windsor 

149 

Steptoe  V.  Harvey 

255 

Stouffer  V.  Coleman 

300 

Stetson  V.  Mass.  Mut.  Fire  Ins.  Co.  ; 

408, 

Stoughton  V.  Baker 

155 

409, 439 

504 

507 

508 

V.  Lynch 

269 

V.  Patten 

138 

148 

V.  Rappelo 

365 

Stevens  v.  Bell . 

276 

Stoveld  V.  Hughes 

62 

V.  Blanchard 

151 

Stracy  v.  Bank  of  England 

28 

V.  Davis 

260 

263 

Stracey  v.  Deey 

148 

V.  Eno 

48 

Strader  v.  Lambeth 

24 

ex  parte 

284 

Strahecker  r.  The  Farmers'  Bank 

•  15 

V.  Hill      . 

140 

Strain  v.  WHght 

8 

V.  Jackson 

285 

Straker  v.  Graham 

103 

V.  Robins 

139 

Strange  v.  Price 

112 

Stevenson  v.  Agry 

277 

Straton  v.  Rostall 

23 

V.  Mortimer 

• 

151 

Stratton  v.  Hale 

289 

V.  Newnham 

56 

V.  Mathews 

93 

V.  Snow 

435 

Street  v.  Blay 

58 

Stewart  v.  Abcrdein 

153 

Stribbling  v.  Bank  of  the  Valley 

259, 

V.  Ball 

285 

264 

V.  Bell 

433 

460 

Strickland  v.  Turner 

49 

V.  Dunlop 

431 

Strithoret  i'.  Graeme 

247 

ex  parte 

284 

Strong  V.  Firemen's  Ins.  Co. 

373, 

374, 

V.  Frazier 

156 

163 

477 

,486 

V.  Hall 

336 

V.  Manufacturers'  Ins.  Co 

408, 

V.  Kennett 

116 

414, 

509 

,  525 

V.  Steele 

487 

V.  Natally 

207 

V.  The  Greenock  Mar.  Ins. 

Strother  v.  Lucas 

321 

Co. 

476 

485 

Strout  V.  Foster 

383 

V.  The  Trustees  of  Ham 

Col 

33 

Stuart  V.  Sloper 

284 

Stinson  v.  Wyman 

385 

V.  The  Marquis  of  Bute 

90 

St.  John  V.  Am.  Mut.  Life  Ins.  Co. 

522, 

V.  Wilkins 

57 

527 

549 

Stubbs  V.  Lund 

62 

V.  Paine 

384 

Sturges  V.  Crowningshield 

274 

316 

St.  Louis  Ins.  Co.  v.  Glasgow 

527 

Sturt  i\  Mellish 

244 

Stockdale  v.  Dunlop 

412 

508 

Succession  of  Risley 

555 

Stocken  v.  Collin 

19 

.  113 

Sucklcy  V.  Delafield 

434 

V.  Dawson 

190 

V.  Fursc 

498 

Stocker  v.  Brockelbank 

168 

Sullivan  v.  Morgan 

396 

V.  Harris 

467 

Summersett  v.  Jarvis 

284 

Stocking  V.  Hunt 

316 

Sumner  v.  Brady 

308 

Stockton  V.  Frey 

219, 

220 

V.  Hamlet 

44 

Stoddard  v.  Long  Island  Railway 

Co. 

221, 

V.  Williams 

26,  70 

222 

Surtces,  ex  parte 

297 

Stokes  V.  Moore 

77 

Susquehanna  Ins.  Co.  v.  Perrine 

496 

V.  Saltonstall      206 

207, 

219 

220 

Sutcliffev.  Dohrman 

189 

Stone  V.  Dennison 

79 

Sutton  V.  Dillaye 

149 

V.  Kctland 

381, 

473 

V.  Irwine 

176 

V.  National  Ins.  Co. 

448 

V.  Tatliam 

146 

,154 

INDEX   TO   CASES   CITED. 


Ixxiii 


Page 

Sutton  V.  "Weeley 

284 

Suydam  v.  Bartle 

263 

V.  Clark 

17 

V.  Columbus  Ins.  Co. 

492 

V.  Jenkins 

252 

V.  Marine  Ins.  Co. 

455 

469 

V.  Westfield 

263 

Swamscot  JNIach.  Co.y.  Partridge 

439 

490, 
491 

Swan  V.  Nesmith 

159 

V.  Stedraan 

176 

V.  Steele 

175 

Swanson  v.  White 

259 

Swanton  v.  Eeed 

360 

Swartwout  v.  Payne 

261 

Swasey  v.  Vanderheyden 

7 

Sweeny  v.  Franklin  Fire  Ins.  Co. 

507 

Sweeting  v.  Fowler 

88 

V.  Halse 

131 

Sweetser  v.  French 

176 

Swete  V.  Fairlie 

556 

559 

Swetland  v.  Creigh 

87 

Swift  V.  Clarke 

387 

389 

V.  Hawkins 

26 

V.  Tyson 

151 

V.  Vt.  Mut.  Fire  Ins.  Co. 

507 

Swinyard  v.  Bowes 

117 

Syers  v.  Bridge 

455 

Sykes  v.  Dixon 

32 

V.  Giles 

142 

154 

Sylvester  v.  Crapo 

102 

V.  Smith 

179 

Symington  v.  M'Lin 

141 

Symonds  v.  Carr 

53 

V.  Cockerill 

254 

263 

Syms  V.  Chaplin 

227 

T. 

Taber  v.  Perrot 

Taff  Vale  Railway  Co.  v.  Giles 

Taft  V.  Pike 

r.  Buffum 
Tagart  v.  State  of  Indiana 
Taggard  v.  Loring  357, 

Taintor  v.  Prendergast 
Tait  V.  Levi 
Talbert  v.  Melton 
Talcot  V.  Com.  Ins.  Co. 
Tallcott  y.  Dudley  190, 

Tallop  V.  Ebers 
Talver  v.  West 
Tamplin  v.  Diggins 
Tams  V.  Hitncr 
Tanner  v.  Smart     232,  233,  236, 


Tapley  v.  Butterfield 

V.  Martens 
Tappan  m.  Blaisdell 
Tappenden  v.  Randall 
Tarleton  v.  Backhouse 
Tarling  v.  Baxter 
Tarpley  v.  Hamer 

8" 


174, 


153 

150 

8 

170 

247 

360,  449 

148,  163 

436 

295 

425 

300,  305 

291 

76 

292 

169 

237,  238 

175,  177 

353 

185,  186 

437 

269 

42,  48 

316 


Page 

Tasker  v.  Cunningharae  458 

V.  Scott  413 

Tassell  v.  Lewis  107 

Tatam  v.  Williams  245 

Tate  V.  Ililbert  92 

V.  Meek  348 

V.  Wellings  254,  261 

Tatham  v.  Hodgson  441 

Tatlock  V.  Harris  89 

Taunton  Copper  Co.  v.  Merchants'  Ins. 

Co.  370, 480 

Tawney  v,  Crowther  77 

Tayloe  v.  Merch.  Fire  Ins.  Co.     20,  403, 

404,  492 


V.  Sandiford 

82 

Taylor  v.  Baldwin 

24 

V.  Bates 

157 

V.  Binney 

65 

V.  Coryell 

176 

V.  Croker 

129 

V.  Curtis 

370 

V.  Davies 

182 

V.  Diplock 

547 

V.  Dobbins 

88 

V.  Geary 

311 

V.  Green 

• 

152 

V.  Henderson 

167 

V.  Hillyer 

180 

V.  Jones 

29 

V.  Kym6r 

149 

V.  Lowell                      425, 

426 

436 

V.  Mills 

309 

V.  Patrick 

27 

V.  Plumer 

302 

V.  Salmon 

157 

V.  Snyder 

105 

V.  Spear 

248 

V.  Sumner 

435 

V.  The  Roval  Saxon 

388 

V.  Weld    ' 

16 

V.  Whitthorn 

281 

V.  Willson 

439 

V.  Young               * 

291 

Taymon  v.  Mitchell 

58 
476 

Teasdale  v.  Charleston  Ins.  Co. 

Tebbctts  v.  Dowd 

120 

V.  Haskins 

32 

in  re 

309 

'                V.  Pickering 

315 

Tempest  v.  Fitzgerald 

76 

Tenny  v.  Prince 

26 

,121 

Terry  v.  Parker 

91 

,  106 

V.  Wacher 

157 

Thallhimer  v.  BrinkerhofF 

152 

Thatcher  v.  Gammon 

258 

Thayer  v.  Brackett 

81 

V.  Mid.  Mut.  Fire  lus.  Co. 

493 

The  Abby 

416 

,453 

The  Adonis 

424 

The  Agricola 

400 

The  Alexander 

379 

,424 

The  Aline 

342 

The  American  Ins.  Co.  v.  Center 

377 

Ixxiv 


INDEX   TO   CASES    CITED. 


Pac;e 

The  Amiable  Nancy 

1.56 

The  Amicable  Society  v 

.  Bolland  545 

553 

The  Ann  and  Mary 

384 

The  Ai)ollo 

.335 

417 

The  Avthur 

424 

The  Atlantic  Ins.  Co.  v 

Storrow 

447 

The  Atlas 

340 

341 

The  Attorney-General  v 

Dunn 

323 

The  Augusta 

341 

The  Aurora 

378 

401 

The  Baltic  Merchant 

398 

The  Barbara 

342 

The  Barque  Chusan 

336, 

345 

401 

The  Batavien 

399 

The  Beaver 

391 

396' 

The  Betsey 

342 

418 

The  Birkenhead 

384 

The  Blaireau 

391 

The  Brig  Casco 

344 

Draco 

340 

342 

343 

Eagle 

401 

George 

392 

393 

Hunter 

378 

Nestor 

401 

Sarah  Ann 

377 

Spartan 

360, 

381 

388 

The  Brutus 

387 

The  Bulmer 

397 

The  Calisto 

400 

401 

402 

The  Castilia 

391 

The  Cato 

390 

391 

The  Celt 

384 

The  Charlotte 

417 

The  Chester 

384 

The  Christiansberg 

424 

The  Christina 

399 

The  Christina  Maria 

417 

The  City  of  London 

384 

The  Con.  Society,  &c.  v 

Perry 

33 

The  Crusader 

388 

The  Dawn 

390, 

394 

395 

The  Diana 

399 

The  Dias  v.  Th5  Privateer  Revenge 

382 

Tl^  Dispatch 

424 

The  Druid 

382 

The  Duke  of  Bedford 

341 

of  Manchester 

399 

of  Norfolk  V. 

Worthy 

148 

The  Dundee 

332 

The  Edward 

418 

The  Eliza 

342 

367 

386 

The  Emancipation 

340 

.341 

The  Endraught 

417 

The  Evert 

417 

The  Fanny  and  Elmira 

333 

The  Florence 

391 

The  Forest 

392 

393 

The  Fortuna 

424 

The  Friends 

361 

384 

390 

The  Gazelle 

384 

The  General  Smith 

401 

The  Gen.  Mut.  Ins.  Co. 

V.  Shcrw 

ood 

443 

The  George 

384 

The  George  Home  386 

The  Girolamo  399 

The  Glocester  396 

The  Golubchick  388 

The  Governor  v.  Daily  134 

The  Governor  Raffles  391 

The  Grand  Turk  381 

The  Gratitudine  378,  380 

The  Great  Republic  404 

The  Gute  Gcsellschaft  Michael  417 

The  Haabet  417 

The  Hannah  378 

The  Happy  Return  388 

The  Harvey  388 

The  Helena  333 

The  Hiram  365 

The  Hoffnung  350,  374,  424 

The  Hoghton  387 

The  Hull  of  a  New  Ship  342,  402 

The  Hunter  341 

The  Imina  453 

The  Iron  Duke  384 

The  Isabella  388 

The  Isabella  Jacobina  365 

The  Jane  341 

The  Jane  and  Matilda  385 

The  Jerusalem  401 

The  John  401 

The  Jonge  Margaretha  418 

The  Jonge  Tobias  .               417 

The  Joseph  Harvev  399 
The  Juliana            '         387,  388,  389,  416 

The  Juniata  394,  395 

The  Jupiter  384 

The  Kammerhevie  Rosenkrants  342 

The  Karasan  381 

The  King  v.  Laindon  24 

V.  Whitaker  146 

The  Lady  Durham  388,  389,  391 

The  Leopard  384 

The  Little  John  396 

Thelluson  v.  Bewick  412 

Thellusson  v.  Fergusson  424 

V.  Staples  424 

The  Lochlibo  399,  400 

The  Lodermia  335 
The  Louisville  Mar.  and  Fire  Ins.  Co. 

V.  Bland  441 

The  Madonna  d'Idra  342,  389 

The  Malta  388,  389 

The  Maria  399,  400,  417 
The  Marine  Ins.  Co.  v.  Tucker 
The  Mars 
The  Martha 


434 

415 

350 

The  Mary        340,  341,  381,  388,  389,  391 

■      "  342 

190 
243 


The  Mary  Ann 
The  Matter  of  Norcross 
The  Mayor,  &c.  v.  Wilks 
The  Michigan  Cent.  R.  R.  Co.  p.  Ward  210 
The  Minerva  386 

The  Mut.  Benefit  Life  Ins.  Co.  r.  Ruse  546 
The  Mutual  Safety  Ins.  Co.  v.  Cargo 
of  Ship  George  483 


INDEX   TO    CASES   CITED. 


Ixxv 


Page 
The  Nathaniel  Hooper    348, 350,  373,  479, 

481 
150 
378 
400 
424 


357, 


The  National  Bank  r.  Norton 
The  Nelson  341, 

The  Neptune  327,388,389,391, 

The  Neptuniis,  417, 

The  New  Eng.  Ins.  Co.  v.  The  Sarah 

Ann 
The  Ne\Y  Hope  and  Delaware  Bridge 

Co.  f.  Phanix  Bank 
The  Nimrod 
The  Ninetta 
The  Northern  Indiana 
The  Nostra  Signora  De  Begona 
The  Ocean 

The  Ocean  Ins.  Co.  v.  Polleys 
The  Osprey 
The  Ostee 

The  Packet  378, 

The  Palo  Alto 

The  Patapsco  Ins.  Co.  v.  Coulter  448, 
The  Pearl 

The  People  r.  Baker 
The  Petrel 
The  Phebe 
The  Phoebe 

V.  Dignum 
The  Pitt 

The  Polly  and  Kitty 
The  Prince  Frederick 
The  Prince  George 
The  Princessa 
The  Protector 
The  Providence 
The  Racehorse 
The  Randolph 
The  Rebecca 
The  Reliance 
The  Rhadamanthe 
The  Richmond 
The  Richmond  Turnpike  Co. 

derbilt 
The  Riby  Grove 

The  Robert  Morris  v.  AVilliamson 
The  Rose 
The  Rovena 

The  Sadlers'  Co.  v.  Badcock 
The  San  Jose 
The  Sarah  Christina 
The  Saratoga 
The  Schooner  Anne 

Boston 

Marion 

Reeside 

Tilton 

Tribune 

Volunteer 
The  Scioto 

The  Scottish  Mar.  Ins.  Co 
The  Selina 
The  Shannon 
The  Ship  Carpenter 
Exeter 


343, 


Van- 


389,  390, 


401, 
15,  444, 

333, 
357,  376, 
345,  347, 

'.  Turner 


377 

150 
393 
356 
384 
417 
424 
415 
3S4 
418 
3  SO 

19 
449 
397 

92 
335 
360 
344 
398 
333 
396 
387 
388 
423 
400 
388 
350 
378 
344 
391 
342 
417 

382 
388 
344 
384 
397 
408 
423 
417 
395 
398 
456 
402 
491 
377 
378 
360 
383 
465 
342 
383 
417 
396 


Page 

The  Ship  Fortitude  377,  378 

Henry  Ewbauk  456 

Mentor  397 

Nathaniel  Hooper  351,  3G0,  365 

Neptune  393 

New  Jersey  381 

Packet  380,  381 

Robert  Fulton  402 

Virgin  378 

Washington  391 

The  Sidney  Cove  342,  388,  391 

The  Sisters  329,  384 

The  Sloop  Mary  262,  342 

Rainbow  381 

The  Sophia  390 

The  Staadt  Embden  417 

The  State  v.  Hallett  323 

V.  Richmond  4 

The  St.  Jago  de  Cuba  401 

The  Taunton  Copper  Co.  v.  Merchants' 

Ins.  Co.  15 

The  Thames  382,  384 

The  Thompson  324 

The  Transit  400 

The  Traveller  384 

The  Tremont  333 

The  Trende  Sostrc  453 

The  Troy  Iron,  &c.  v.  Corning  21 

The  Trustees  v.  The  Brooklyn  Fire 

Ins.  Co.  493 

The  Tutela  366 

The  Twee  Juffrowcn  417 

The  Twende  Brodre  417 

The  Two  Catharines  389,  390,  391 

The  Two  Friends  391 

The  Two  Sisters  397 

The  Union  Mut.  Ins.  Co.  v.  The  Com- 
mercial Mut.  Mar.  Ins.  Co.         404,  458 
The  United  Ins.  Co.  v.  Scott  380 

The  United  States  v.  Ashton  392 

V.  The  Paul  Shear- 
man 452 


The  Van  Guard 
The  Vibilia 
The  Vigilantia 
The  Virgin 
The  Volunteer 
The  Vrouw  Judith 
The  Vrow  Johanna 
The  Waldo 
The  Warrior 
The  Watchman 
The  William 
The  William  Harris 
The  Woodrop  Sims 
The  Zelden  Rust 
The  Zephyr 
The  Zodiac 
Thing  V.  Libbey 
Thomas  v.  Cartheral 
V.  Clarke 
V.  Dike 
V.  Edwards 


388 
401 
423 
342 
344 
424 
424 
344 
333 
311 
399 
392 
382,  383,  384 
418 
474 
400 
5,  6 
260 
357 
8 
148 


Ixxvi 


INDEX   TO    CASES   CITED. 


Page 
Thomas  v.  ITcwes  147 

V.  Kliodes  308 

r.  Kidcing  301 

V.  Ivoosa  87 

V.  Tlie  B.  and  P.  Railroad 

Corp.  201,203,207,211 

V.  Todd  90 

('.  Vonkapff  510 

Assignee  of  Ploulbrooke,  v. 

Dcsanges  282 

Thomason  v.  Frcrc  302 

Thomasson  v.  Boyd  6 

Thomond  v.  Earl  of  Suffolk  11 

Thompson  v.  Andrews  170 

V.  Berrv  258 

V.  Bush  395 

V.  Davenport         1G2,  163,  43C 

V.  Downing  84,  34G,  407 

V.  Faussat  389 

V.  Finden  336 

V.  Hamilton  357,  360 

V.  Havelock  162 

V.  Hunter  484 

V.  Inglis  358 

V.  Ketcham  23,  321 

V.  Lay  5,  6 

?;.  Pcrcival  193,194 

V.  Perkins  158 

V.  Powles  262 

V.  Rowcroft  390,  476 

V.  Shepherd  291 

V.  Snow  360 

V.  Taylor  418 

V.  The  Philadelphia  389 

V.  Thompson  CI 

Thomson  v.  Davenport  149,  336 

V.  Hopper  243 

V.  Ketchum  107 

V.  Perkins  156,  159 

V.  Thomson  152 

Thorn  v.  Hicks  329 

Thorndike  v.  Bordman  456 

V.  De  Wolf  168 

V.  Stone  262,  340,  341,  342 

V.  The  City  of  Boston         324 

Thorne  v.  Deas  158 

V.  Watkins  318 

V.  White  395 

Thornton  v.  Bank  of  Washington         264 

V.  Fairlic  28 

V.  Illingworth  285 

V.  Kerr  167 

V.  U.  S.  Ins.  Co.   372,  374,  482, 

486 

V.  Wynn  58 

Thorogood  v.  Marsh  214 

Thorold  v.  Smith  137,  153 

Thorpe  v.  Jackson  192 

V.  White  29 

Thrupp  V.  Fielder  5 

Thurston  v.  Koch  420 

V.  M'Kown  102 

V.  Thornton  41 


ThurtcU  V.  Beaumont 
Tibbets  v.  George 
?'.  Gerrish 
Ticorno  Bank  v.  -Johnson 


Page 

529 

555 

5 

264 


Tidmarsh  v.  Wasiiington  Ins.  Co.      425, 

427,  431 

Tidswell  v.  Angerstein  549 

Tilcy  V.  Courtier  81 

Tillinghast  v.  Noursc  241 

Tillottson  V.  McCrillis  157 
Tillou  V.  Kingston  Mut.  Ins.  Co.  407,  408, 
508,  509,  .532,  533,  534 

Tilly  V.  Tilly  548 

Tilton  V.  Tiiton  16 

Timbers  v.  Hay  ward  10 

Timmis  v.  Gibbins  90 

Tindal  V.  Brown  112,116 

ex  parte  291 

Tinson  v.  Francis  101 

Tipper  v.  Bicknell  29 

Tippets  V.  Heane  239 

V.  Walker  147,  155 

Tisdale  v.  Harris  77 

Tisloe  V.  Graeter  23 
Tittemore  v.  Vt.  Mut.  Fire  Ins.  Co.     632, 

533 

Titus  V.  Hobart  96,  323 

Tobin  V.  Crawford  353 

Toddu.  Reid  146,153,161 

V.  Todd  238 

Toland  v.  Sprague  243 

Toler  V.  Armstrong  162 

Tompkins  v.  Brown  235,  237 

V.  Haas  54 

V.  Saltmarsh  197 

V.  Wheeler  276 

Tonawanda  R.  R.  Co.  v.  Muiiger  227,  228 

Tooke  V.  Hollingworth  302 

Topham  v.  Braddick  157,  248 

Torrey  v.  Grant  258 

Toulmin  v.  Inglis  454 

V.  Steere  150 

Touro  V.  Cassin  318 

Tourville  v.  Naish  149 

Toussaint  v.  Martinnant  292 

Touteng  v.  Hubbard  365 

Tower  v.  Utica  and  Schen.  R.  R.  Co.  227 

Towle  V.  Kettell  361 

Towner  v.  Wells  295 

Towns  V.  Birchett  160,  161 

Townsend  v.  Bush  257 

V.  Corning  145,  146 

V.  Derby  98 

V.  Goewey  182 

V.  Inglis  137 

Townsley  v.  Sumrall  26,  110,  111 

Townson  v.  Tickell  304 

V.  Wilson  150 

Tracy  y.  Wood  198 

Traders'  Ins.  Co.  v.  Robert   439,  508,  509 

Train  v.  Bennett  397 

w.  Gold  18 

Trainer  v.  Superior  385 


INDEX   TO   CASES  CITED. 


Ixxvii 


Trasher  v.  Everhart 

Trask  v.  Duvall 

Travis  v.  Tartt 

Treadwell  i'.  Union  Ins.  Co. 

Treat  v.  Orono 

Tremlow  v.  Oswin 


Page 
322 
353 
192 
349,  427 
3G 
445 


Trench  v.  Chenango  Co.  Mut.  Ins.  Co. 

497,  525 

Treuttel  v.  Barandon  101,  122,  151 

Triggs  V.  Ncwnham  232 

Tri'mbey  v.  Vicgnier  95,  318,  322 

Timrod  v.  Shoolbred  57 

Trinity  House  v.  Clarke  360 

Tripler  v.  Olcot  157 

Trotter  v.  Curtis  263 

Troup  V.  Smith  248 

Trow  V.  Vt.  Central  E.  R.  Co.  228 

True  V.  Fuller  65 
Trueraan  v.  Loder  140,  149,  155,  177 
Trull  V.  Eoxbury  Mut.  Fire  Ins.  Co.    538, 

539 

Truman  v.  Fenton  232 
Trumball  v.  Portage  Co.  Mut.  Ins. 

Co.  532 

Trundy  v.  Farrar  135,  136 

Truscott  V.  Christie  418 

Tuberville  v.  Ryan  176 

Tucker  v.  Buffiington  332,  339 

V.  Robarts  129 

V.  Huston  45,  76 

V.  Wilamouicz  257 

Tuckers  v.  Oxley  188 

Tudor  V.  Macomber  373,  477 

Tufnell  V.  Constable  36 

Tufts  V.  Tufts  77 

Tunnell  v.  Pettijohn  205 

Tunno  v.  Edwards  551 

Tupper  V.  Cadwell  7 

Turley  v.  North  Am.  Fire  Ins,  Co.        535 

V.  Thomas  229 

Turner  v.  Burrows  337,  406 

V.  Calvert  254,  257 

V.  Coolidgc  332 

ex  parte  299 

V.  Richardson  298 

Turner's  case  397 

Turney  v.  Dodwell  239 

V.  Wilson  199,  202 

Turpin,  ex  parte  291 

V.  Povall  262 

Turvill,  ex  parte  299 

TutclifF  u.  Dohrman  189 

Tuthill  V.  Davis  257 

Tuttle  V.  Clark  266 

V.  Cooper  167 

V.  Love  14 

Tuxworth  V.  Moore  45 

Twopenny  v.  Young  131 

Twyford  u.  Trail  178 

Twyne's  case  276,  331,  332 

Tye  V.  Gwynne  37 


Page 
Tyler  v.  ^tna  Fire  Ins.  Co.  507,  525 

Tyly  V.  Morrice  205,  224 

Tyrell's  Heirs  v.  Rountrce  296 

Tyric  v.  Fletcher  404,  435,  436 

Tyson  v.  Rickard  255,  260 


U. 


Undcrhill  v.  Agawam  Mut.  Fire  Ins. 

Co.  536 

Union  Bank  v.  Coster  67 

V.  Greary  28 

V.  Ridgely  68 

V.  "Willis  121 

Union  Canal  Co.  v.  Loyd  150 

Union  India  Rubber  Co.  v.  Tomlinson    38 

Union  Ins.  Co.  v.  Tysen  461 

United  Ins.  Co.  v.  Lenox  351,  476 

V.  Scott  472 

United  States  v.  Bainbridge  4 

t>.  Bank  of  the  U.  S.  87 

V.  Binney  167 

V.  Coffin"  396 

V.  Crosby  319 

V.  Cutler  396 

V.  Delaware  Ins.  Co.       340 

V.  Duncan  186 

V.  Forbes  399 

V.  Gillies  326 

V.  Hack  189 

V.  Hillegas  67 

V.  Jarvis  158 

V.  Kirkpatrick  83 

V.  Lynch  399 

V.  Morrison  295 

V.  Netcher  396 

V.  Ruggles  396 

V.  The  Paul  Shearman   415 

V.  Tillotson  67 

V.  Wardwell  83 

V.  Wilder  374 

V.  Williams  152 

V.  Willings       326,  327,  329 

United  States  Bank  v.  Bank  of  Georgia 

90 

V.  Binney  177 

V.  Lane  114 

V.  Smith]  108,  109 

Upham  V.  Lefavour  159,  161 

V.  Prince  65 

Upton  V.  Gray  149 

V.  Suffolk  County  Mills  142 

V.  The  Salem  Ins.  Co.  461 

Urquhart  v.  Barnard  456 

V.  Mclver  159 

Usher  v.  Noble  411 

Uther  V.  Rich  151 

Utica  Ins.  Co.  v.  Bloodgood  264 

V.  Tillman  255 

Utterson  v.  Vernon  289,  309 


g 


Ixxviu 


INDEX   TO    CASES    CITED. 


Valand'mg-hani  v.  Huston 
Valentine  i'.  Packer 
f .  Piper 
V.  Vaughan 
Vail  r.  Stronrr 


Page 
246 
142 
136 
285 
42 


Valk'jo  V.  Wheeler  448,  449,  454,  455 

Valley  Bank  v.  Stribbling  259 

Valpy  I'.  Gibson  50 

Van  Allen  v.  Vanderpool  141 

Van  Beiiren  v.  Willson  389 

Van  Bokkelin  v.  Ingersoll  345 

Van  Buskirk  v.  Parinton  212 

Vandenbeuvel  v.  United  Ins.  Co.  434,  474, 

482 
Vanderslice  v.  Steam  Tow-Boat 

Superior  203 

Vandever  v.  Tilghman  390 

Vandyck  v.  Hewitt  437 

Van  Eps  v.  Corp.  of  Schenectady  54 

y.  Dillaye   ■  194 

Vanhorn  v.  Frick  136 

Van  Keuren  u.  Parmelee  180,241 

Van  Natta  v.  Mut.  Security  Ins.  Co. 


413, 
513 
182 
82 
315 


Van  Ness  v.  Forrest 
Van  Ostrand  v.  Heed 
Van  Eaugb  v.  Van  Arsdaln 
Van  Reimsdyk  v.  Kane  95,  192,  316,  318, 

322,  323 
Van  Renssalaer  v.  Sheriflf  of  Albany     295 

Van  Rensselaer  v.  Jewett  252 

V.  Jones  252 

Vansandan  v.  Corsbie  292 

Van  Stanvoord  v.  St.  John  218 

Van  Valen  v.  Russell  187 

Van  Wart  y.  Smith  117 

v.  Woolley  117 

Vareck  v.  Crane  256,  257 

Varner  v.  Nobleborough  82 

Vassar  v.  Camp  20 

Vaughan  v.  Fuller  119 

V.  Mcnlovc  197 

Veacock  r.  M'Call  388 

Veasie  v-  Williams  152 

Vedder  v.  Alkenbrack  316 

Venable  i'.  Thompson  24 

Vennall  v.  Garner  383 

Venning  v.  Leckie  182 

Vent  V.  Osgood  4,  8 

Ventris  v.  Shaw  235 

Vere  v.  Ashby  137 

V.  Smith  159 
Vermont  Central  R.  R.  Co.  v.  Estate 

of  Hills  21 

Vernon  v.  Manhattan  Co.  172 

V.  Smith  510 

Vertuc  V.  Jewell  60 

Very  r.  McHenry           '  311,315 

Vice  V.  Anson  165 

Vidal  V.  Thompson  318 

Viel  r.  Flcmming  177 

Vielic  V.  Osgood  77 


Page 

Vinal  V.  Burrill                                329 

,417 

Viner  v.  Cadell 

303 

Violctt  V.  Powell 

148 

Vlierboom  i\  Chapman 

348 

Von  Hemert  v.  Porter 

269 

Von  Lindenau  v.  Desborough 

549 

Von  Vacter  v.  Flack 

87 

Voorhees  v.  Earl 

58 

V.  Wait 

9 

Vosc  V.  Eagle  Life  and  Health  Ins. 

Co. 

557 

Vreeland  v.  Hyde 

107 

Vulliamy  v.  Noble 

170 

w. 


Waddell  v.  Cook 

189 

Waddington  v.  United  Ins.  Co. 

435 

Wade  V.  Simeon 

28 

AVade's  case 

81 

Wadham  v.  Marlow 

311 

Wadsworth  v.  Pac.  Ins.  Co. 

460 

Wain  V.  Warlters 

66 

Wainewright  v.  Bland 

549 

Wainhouse  v.  Cowie 

415 

Wainman  v.  Kynman 

239 

Wainwright  v.  Webster 

90 

Waistell  v.  Atkinson 

81 

Wait  V.  Gibbs 

157 

I'.  Johnson 

148 

Waland  v.  Elkins 

217 

Walch  V.  Adams 

174 

Walden  v.  Chamberlain 

378 

V.  Firemen  Ins.  Co. 

443 

V.  Le  Roy 

372 

482 

V.  Louis.  Ins.  Co. 

404 

524 

V.  New  York  Firemen 

Ins. 

Co. 

434 

v.  Phoenix  Ins.  Co. 

416 

V.  Sherburne 

179 

252 

Waldo  V.  Martin 

162 

Wales  V.  Webb 

258 

Walker  v.  Bank  of  Augusta 

114 

V.  Bank  of  Washington 

258 

V.  Birch 

453 

V.  Campbell 

237 

V.  Davis 

9 

ex  parte 

284 

292 

V.  McDonald 

123 

r.  Maitland 

442 

443 

V.  Nussey 

76 

V.  Perkins 

99 

V.  Protection  Ins.  Co. 

462 

V.  Simpson 

7 

V.  Smith 

141 

147 

V.  Trott 

171 

V.  United  States  Ins.  Co.  369,  414, 

481 

V.  Walker  26 

V.  Warficld  234 

Wall  V.  East  River  Mut.  Ins.  Co.  520 

17,  Howard  Ins.  Cc^.  496 


INDEX   TO    CASES   CITED. 


Ixxix 


Wallace  v.  Agry 
V.  Breeds 
t'.  Cook 
V.  Fitzsimmons 
V.  Ins.  Co. 
V.  M'Connell 
V.  Patterson 
V.  Vigus 
Waller  v.  Lacy 
Walpole  V.  Bridges 
Walsh  V.  Homer 
V.  Nourse 
V.  Pierce. 
V.  Whitcomb 
Walter  r.  Brewer 
V.  Haynes 
V.  Ross 
Walton  V.  Dodson 
V.  Mascall 
v.  The  Neptune 
Walworth  v.  Holt 
Want  V.  Blunt 
Wapples  V.  Eames 
Warburton  v.  Aken 
Ward  V.  Ames 
V,  Dalton 
V.  Evans 
V.  Felton 
V.  Fuller 
V.  Green 
V.  Leviston 
V.  Ward 
V.  Whitney 
Warden  v.  Mourillyan 
Warden  v.  Greer 


Page 

82,  103,  113 

47 

143 

193 

530,  538 

109,  296 
311 
207 
236 
213 
456 
315 
138 
143 

216,  382 
113 
50 
185 
117 
392 
182 
546 
462 
16 

395,  396 
294 

126, 153 

353 

304 

376,  378,  382 

184,  185 
549 
347 
207 
215 


Warder  v.  Goods  of  La  Belle  Creole    456 

V.  Horton  420,  421 

Ward  well  v.  Haight  172 

AVare  v.  Adams  66 

V.  Gay  220 

Warfield  v.  Boswell  259 

Waring  v.  Cunliffe  268 

V.  Mason  53 

V.  Richardson  157 

Warner  v.  Daniels  57 

V.  Martin  155,  159 

V.  M'Kay  148,161 

V.  Middlesex  Mut.  Ass.  Co.     512 

V.  Ocean  Ins.  Co.       '  492 

Warren  v.  Buckminster  48 

V.  Crabtree  258,  261 

in  re  284 

V.  Mains  81,  90 

V.  Ocean  Ins.  Co.  406 

V.  Wheeler  23,  107 

V.  Whitney  98 

Warren  Bank  v.  Suffolk  Bank  144 

Warrender  v.  Warrender  319 

Warrington  v.  Furbor  117 

Warwick  v.  Bruce  9,  33 

Washburn  v.  Bank  of  Bellows  Falls     185, 

186 
V.  Goodman  170,  190,  191 


Page 

Washburn  v.  Ramsdell 

102 

Watchorn  v.  Langford 

494 

Waterman  v.  Barrett 

27 

V.  Meigs 

78 

Waters  v.  Allen 

416 

435 

V.  Merchants'  Ins. 

Co. 

443 

527 

V.  Taylor 

171 

V.  The  Earl  of  Tlianct 

248 

V.  Tompkins 

239 

Watkins  v.  Bensusan 

102 

V.  Bernadiston 

400 

V.  Cranch 

108 

109 

V.  Durand 

514 

V.  Hill 

82 

f.  Maule 

100 

127 

V.  Perkins 

73 

V.  Stevens 

236, 

242 

V.  Vince 

137 

Watkinson  v.  Bank  of  Penn. 

172 

V.  Laughton 

356 

473 

Watson  V.  Bourne 

316 

V.  Duykinck 

354 

356 

ex  parte  168,179,285,288 

V.  Ins.  Co.  of  N.  A.  468 

V.  King  445 

V.  Lyle  244 

V.  Mainwaring  556 

V.  McLaren         ■  65 
w.  The  A.  N.  &  B.  Railway 

Co.  218 

V.  The  Rose  390 

V.  Threlkeld  137 

V.  Wilson  295 

Watts  V.  Friend  78 

Wattson  V.  Marks  385 

Waugh  V.  Carver  166,  168 

V.  Cope  239 

Wayde  v.  Carr  229 

Way  dell  v.  Luer  82,  193,  194 

Wayland  v.  Mosely  23 

Waynam  v.  Bend  124 

Weatherhead  v.  Boyers  259 

Webb  V.  Fox  298,  304 

V.  Nat.  Fire  Ins.  Co.  494 

V.  Pierce  360 

V.  Roberts  58 

Webber  r.  Tivill  243 

Webster  v.  Brav  165 

i^.  De  tastet  156,416 

V.  Foster  433 

V.  McGinnis  137 

fv.  Webster  170 

lerburn  v.  Bell  427 

Wedge  V.  Newlyn  281 
Weed  V.  Saratoga  &  Schenectady 

Railroad  217,  218,  225 

Weeks  v.  Catharina  Maria  389 

Weightman  v.  Macadam  372 

Weir  V.  Aberdein  425 

Welch  V.  Hicks  351 

V.  Mandeville  554 

Welles  V.  Boston  Ins.  Co.  367,  538 

I'.  Gray  482 


\\XK 


INDEX   TO    CASES    CITED. 


Wellmfin,  in  re 

V.  Southard 
Wells  V.  Archer 

V.  llorton 

V.  JNIaco 

V.  Parker 

V.  I'hil.  Ins.  Co. 

V.  I'orter 

V.  Ilaylantl 


rage 

282 

237 

553 

75 

293,  309 

284 

413 

55 

247 


V.  The  Steam  Navigation  Co.  202,221 

j;.  Whitehead  113 

Welsh  v.  Adams    '  189 

V.  Welsh  293 

Wendover  v.  Hogeboom  329 

Wcnman  v.  The  Mohawk  Ins.  Co.        248 

Wentworth  v.  Bullen  32 

V.  Oiithwaite  63 

West  Boylston  Manuf.  Co.  v.  Searlc     159 

West  Branch  Bank  v.  Moorehead  82 

Westerdell  v.  Dale  339,  400 

Westfall  V.  Hudson  R.  Fire  Ins.  Co.      499 

V.  Parsons  72 

Westlake  r.  St.  Lawrence  Co.  Mut. 

Ins.  Co.  517 

Weston  V.  Barton  68,  185 

V.  Davis  29 

V.  Penniman  326,  329 

Westropp  V.  Solomon  155 

Wethey  v.  Andrews  102 

Wetmore  v.  Heushaw  390 

Wetzel  V.  Spousler  69 

Weyland  i;.  Elkins  217 

Whalley  y.  Wray  197 

Wharton  v.  O'Hara  36 

Wheatley  v.  Williams  248 

Wheaton  v.  East  4,  5 

Wheeler  v.  Bramah  298 

V.  Field  105 

V.  Fisk  295 

V.  Guild  47 

V.  Kroggs  90 

V.  Morris  136 

V,  Sumner  331 

r.  Van  Wort  169 

V.  Webster  247 

Wheeling  Ins.  Co-  v.  Morrison  508 

Wheelock  v.  Doolittle  241 

Whetmore  v.  Baker  181 

Whipple  V.  Stevens  180,  238,  241 

Whiston  V.  Stodder  318,  320 

Whitakcr  v.  Brown  179 

V.  The  Bank  of  England   g|30 

Whitheck  v.  Whitbeck  27 

Whitchcr  v.  Hall  67 

Whitcomb  v.  Whiting  240,  241 

White  V.  Bailey  246 

V.  Baring  381 

V.  Boulton  219 

V.  Brown  510 

I'.  Chapman  162 

V.  Chouteau  139,  158,  161 

V.  Demilt  32 

V.  Garden  56 


Page 

White  V.  Hale  241 

V.  Miller  157 

V.  Ledwick  98 

V.  Skinner  147,  148 

V.  Winnisimmet  Co.  228 

D.Woodward  189 

?;.  Wright  261,263 

Whitehead  v.  Anderson  61,  64 

V.  Price  503 

V.  Tuckctt  135 

V.  Walker  102 

Whitesell  v.  Crane  223,  227 

Whitesides  v.  LafFerty  191 

Whitman,  ex  patte  298 

Whitmore  v.  Gilraour  148 
Whitney  v.  American  Ins.  Co.      410,  438 

V.  Bigclow  242 

V.  Dutch  5 

V.  Ferris  167 

V.  Haven  431 

V.  Lee  198 
?;.  N.  y.  Firemen  Ins.  Co.       354 

Whiton  V.  Old  Colony  438 
V.  The  Ship  Commerce     395,  398 

Whittemore  v.  Adams  32.j 

Wliitteridge  v.  Norris  480,  484 

Whittingham  v.  Hill  7 

Whittle  V.  Skinner  27 

Whitton  I'.  Smith  170,  174 

Whitwell  I'.  Johnson  115 

Whitworth  v.  Adams  266 

Whywall  v.  Champion  7 

Wickham  v.  Blight  388 

Wicks  V.  Gogerley  257 

Wiffen  V.  Koberts  97,  106 

Wigg  V.  Wigg  149 

Wiggin  V.  Amory  448 

V.  Mer.  Ins.  Co.  438 
V.  Suffolk  Ins.  Co.    420,  437,  487 
Wightman  v.  Western  M.  &  Fire  Ins. 

Co.  535 

Wilbur  V.  Crane  28 

Wilburn  v.  Larkin  145 

Wilcox  V.  Howland  268 

V.  Hunt  318,  322 

V.  Plummer  248 

V.  Roath  5 

V.  Singletany  176 

Wilcocks  V.  Union  Ins.  Co.  448 

Wild  V.  Bank  of  Passamaquoddy  139 

Wilde  V.  Sheridan  85 

Wilder  v.  Keeler  187,  192 

Wilders  v.  Stevens  100 

Wildes  V.  Fessenden  193 

V.  Savage  66,  129 

Wildman,  ex  parte  294 

Wilhelm  v.  Caul  30 

Wilkes  V.  Ferris  45,  62,  76 

V.  Jacks  118 

Wilkie  V.  Roosevelt  257 

Wilkins  v.  Carmichael  400 

V.  Casey  93 

u.  Jadis  107,  108 


INDEX   TO   CASES    CITED. 


Ixxxi 


Wilkins  ik  Pearce  177 

V.  l^ccd  337 

Wilkinson  v.  Frazicr  168,  385,  386 

V.  Henderson  192 

V.  Johnson  124,  131 

V.  Lutwidgc  129 

Wilks  V.  Back  145 

Willard  v.  Hewlett  5 

V.  Eeeder  261 

V.  Stone  9,  33 

Willatts  V.  Kennedy  26,  27 

Willes,  ex  parte  284 

V.  Glover  152,431 

Willett  V.  Atterton  233 

V.  Blanford  191 

V.  Chambers  180 

Willetts  V.  Buftalo  &  Rochester  R.  R. 

Co.  228 

Williams  v.  Barton  159 

V.  Branson  215 

V.  Clarke  100 

V.  Everett  130 

ex  parte  186,  191 

V.  Gcrmaine  132 

V.  Grant  215 

V.  Gridley  240 

V.  Griffiths  235,  236,  238 

V.  Hancc  2G3 

V.  Henshaw  181 

?;.  Jones  165,250,323 

V.  Keats  171 

V.  Kennebec  Ins.  Co.  422 

V.  Littlefield  139 

V.  London  Ass.  Co.  373 

V.  More  4 

V.  N.  E.  Mut.  Fire  Ins.  Co.  422, 

496,  502,  521,  522 

V.  Gates  318 

V.  Shackelford  1.54 

V.Smith  115,351,413,471 

V.  Storrs  157,  158 

V.  Suffolk  Ins.  Co.  369,  442 

V.  Taylor  219 

V.  Thomas  338 

V.  Thorp  555 

V.  Waring  1 1 0 

V.  Whiting  323 

V.  Williams  255,  360 

V.  Wilson  191 

17.  Winans  131 

Williamson  v.  Canaday  142 

V.  Dickens  291 

V.  Price  400 

V.  The  Brig  Alphonso       391 

Willings  V.  Blight  335 

V.  Consequa  318 

Willlnks  V.  Hollingsworth  137 

Willis  V.  Bank  of  England  149 

V.  Ban-ett  88 

V.  Freeman  93 

V.  Green  1 1 7 

in  re  291 

V.  Newham  240 


Page 

Willis  V.  Willis 

42 

Willoughby  v.  Comstock 

259 

V.  Horridgc 

228 

Wills  V.  Cowper 

319 

Wilmar  o.  The  Smilax 

342 

Wilmot  V.  Smith 

31 

Wilson  V.  Anderton 

150,  211 

V.  Applcton 

247 

V.  Balfour 

44 

V.  Barthorp 

148 

V.  Brett 

156 

V.  Calvert 

238 

V.  Camjibcll 

165 

V.  Dyson 

177 

ex  parte 

284 

V.  Fuller 

143 

V.  Genesee  Mut.  Ins.  Co.  517,532 
V.  Green  16 

V.  Greenwood  171 

V.  Hart  .  148 

V.  Herkimer  Co.  Mut.  Ins.  Co.  520, 
525 
I'.  Hill  408,509,531,534 

in  re  311 

V.  Kymer  353 

V.  Lewis  1 80 

V.  New  York  and  Maryland 

Line  R.  R.  Co.  155 

V.  Poulter  138 

V.  Royal  Exch.  Ass.  Co.  419,  473 
V.  Smith  156 

V.  The  Ohio  385 

V.  The  y.N.  and  B.Railway  Co.  218 
V.  Trumbull  Mut.  Fire  Ins.  Co. 

490,  534 

V.  Tumman  137 

V.  AVhitehead  168 

V.  Williams  176 

Wilton  V.  Falmouth  323 

Wiltshire  v.  Sims  141 

Winch  V.  Keely  302 

Winchester,  ex  parte  289 

Wiudle  V.  Andrews  94 

Wing  V.  Clark  42 

V.  Harvey  542 

V.  Mill  40 

Wingate  v.  Mechanics'  Bank  144 

Winn  V.  Columbian  Ins.  Co.  377,  466 

Winship  v.  United  States  Bank    166,  175, 

179 

Winslow  V.  Dawson  257 

V.  Prince  399 

Winsor  v.  Cutts  '  360 

V.  Dilloway  15 

V.  Lombard  57 

V.  McLellan  332 

Winter  v.  Coit  139 

Winthrop  v.  Carlcton  322 

V.  Un.  Ins.  Co.  461 

Wise  V.  Charlton  go 

Wiseman  v.  Roper  27 

Wiswould,  ex  parte  285 

Witershiem  v.  Lady  Carlisle  247 


Ixxxii 


INDEX   TO    CASES   CITED. 


Withers  V.  Lyss 
Witherspoon  i'.  Diibose 
"Withcrup  V.  Hill 
Witter  v.  Kichards 
Wittock  V.  Underwood 
Woddropp  V.  Ward 
Wolcott  V.  Eagle  Ins.  Co. 


rage 
70 
11 

157 

187 

107 

187 

344,409,  410, 

433,  439 

V.  Van  Santvoord  109 

Wolden  v.  Louis.  Ins.  Co.  .^23 

Wolf  V.  Summers  356 

Wolfe  V.  Howard  Ins.  Co.  537 

V.  Myers  347 

V.  Whitcman  248 

Wolff  V.  Horncastlo  413 

V.  Koppel  159 

Wood  V.  Benson  74 

V.  Brown  119 

V.  Dodgson  292 

V.  Goodwich  136,  145 

V.  Hamilton  400 

V.  Hartford  Fire  Ins.  Co.     478,  497 

V.  Jones  60 

V.  Lincoln  and  Kennebeck  Ins. 


Co. 

V.  Mytton 
V.  New  Eng.  Mar 
V.  Perry 
V.  Bobbins 
V.  The  Nimrod 
V.  Wylds 
Woodbridge  v.  Allen 

V.  Brigham 
V.  Wright 
Woodcock  V.  Houldsworth 
Woodes  V.  Dennett 
Woodfin  V.  Hooper 
Woodford  v.  McClenahan 
WoodhuU  V.  Wagner 
Woodin  V.  Burford 
Woodlefe  ?;.  Curties 
Woodlife's  case 
Woodman  v.  Chapman 
Woodruff  V.  Hinman 
Woods  V.  Devin 

V.  Masterman 
V.  Bussell 
Woodthorpe  v.  Lowes 
Woodward  v.  Cowing 

V.  Howe 
Wookey  v.  Pole 
Wooldridgc  v.  Boydell 
Wooley  V.  Clements 
Woolf  V.  Beard 

V.  Claggett 
Wootcn  I'.  Miller 
Wordsworth  v.  Willan 
Worrall,  in  re 

V.  Munn 
Worsley  v.  de  Mattos 

V.  Scarborough 
V.  Wood 


Ins.  Co. 


Worthington  v.  Grimsditch 


465,  470 

125 

461 

23 

252 

386,387 
239 

236,315 
109 
323 
113 

147,  148 
316 
142 
316 
152 
213 
213 
11 
34 
225 
539 

332,  333 

113, 116 
36 
3 
122 
457 
107 
228 

427, 456 
162 
229 
279 

138, 176 

283 

150 

36,  406,  422,  535 

240 


142, 


203, 


Wray  v.  Milestone 

Wren  v.  Kirton  141, 

Wright  w.  Brigg 

V.  Hamilton 

V.  Hunter 

V.  McAlexander 

V.  Morley 

V.  Nutt 

V.  Keed 

V.  Russell 

V.  Shawcross 

V.  Shiffner 

V.  Simpson 

V.  Wheeler 

V.  AYright 
Wriglcy,  in  the  matter  of 
Wyatt  V.  HodsoQ 

V.  Margins 

V.  Marquis  of  Hertford 
Wycoff  V.  Longhead 
Wydown's  case 
Wyld  V.  Pickford 
Wyllie  V.  Wilkes 
Wyman  v.  Gray 
Wyndham,  ex  parte 
Wynn  v.  Allard 
Wynne  v.  Jackson 

V.  Eaikes 
Wysham  v.  Eossen 


Y. 

Yarborough  v.  Bank  of  England 
Yarnell  v.  Anderson 
Yates  V.  Bell 
V.  Brown 
V.  Sherrington 
Yea  V.  Fouraker 
Yeates  v.  Grove 
Yerby  v.  Grigsby 
Yonge  V.  Reynell 
Yonqua  v.  Nixon 
Yorke  v.  Grenaugh 
Young  V.  Axtell 

V.  Bank  of  Bengali 

V.  Berkley 

V.  Bryan 

V.  Cole 

ex  parte  289, 

V.  Grote 

V.  Mackall 

V.  Miller 

V.  Smith 

V.  Taylor 

V.  Washington  Co.  Mut. 
Co. 
Yundt  V.  Roberts 


Z. 


Zacharie  v.  Orleans  Ins.  Co.       462 


Pag« 

181 

157,  160 

19 
248 
336 
255 

65 

66 

81 
185 
115 
424 

66 
258 

32 
324 
261 
336 
338 
254 
282 
224 
289 

77 
284 
227 
318 
129 
385 


124 
194 
130 
400 
292 
232 

87 
136 

65 

36 
212 
167 
292 
257 
110 
126 
,  292,  338 

92 
245 
255 
208 
292 
Ins. 
504,  506 

34 


399, 


INDEX   TO    CASES   CITED. 


Ixxxiii 


Zagury  v.  FurncU 
Zane  v.  Brig-  President 
V.  Zane 


Page 
47 

401 
27 


Zent  V.  Heart 
Zouch  V.  Parsons 


Page 
241 

4 


ELEMENTS 


OF 


MERCANTILE   LAW. 


ELEMENTS 


MERCANTILE    LAW. 


CHAPTER  I. 

OF  THE  PARTIES  TO  MERCANTILE  CONTRACTS. 

SECTION  I. 

WHO   MAY  BE   PARTIES   TO   MERCANTILE   CONTRACTS. 

It  was  once  the  doctrine  of  the  English  courts,  that  the  law 
merchant  did  not  apply  to  afiy  contracts  between  parties  who 
were  not  merchants.^  But  this  view  passed  aWay  j^  and  it  has 
long  been  a  well-established  rule  in  that  country  as  well  as  this, 
that  the  law  merchant  applies  to  mercantile  contracts,  such  as 
negotiable  notes,  bills  of  lading,  charter  parties,  policies  of  marine 
insurance  and  the  like,  whoever  may  be  the  parties  to  them. 

All  mercantile  transactions  begin  or  end  in  contracts  of  some 
kind ;  express  or  implied ;  executed  or  to  be  executed ;  and 
the  first  essential  element  of  every  contract  is  the  existence 
of  parties  capable  of  contracting.  Generally,  all  persons  may 
bind  themselves  by  contracts.     Whoever  would  resist  a  claim 

'  Oaste  V.  Taylor,  Cro.  Jac.  306  ;  Eajrlechilde's  case,  Hetley,  167. 

2  Barnaby  v.  Kigalt,  Cro.  Car.  301 ;  Woodward  v.  Eowe,  2  Keble,  105,  132. 


4  ELEMENTS   OF   MERCANTILE    LAW.  [CH.  I. 

or  action  founded  on  his  contract,  and  rests  his  defence  on  the 
ground  of  his  incapacity,  must  make  this  out.' 

The  incapacity  may  arise  from  many  causes ;  as  from  insan- 
ity;  or  from  being  under  guardianship;  or  from  alienage  in  time 
of  war ;  or  from  infancy  ;  or  from  marriage.  Of  infants  and 
married  women  we  must  speak  in  some  detail. 

SECTION  II. 

OF   INFANTS. 

All  are  infants,  in  law,  until  the  age  of  twenty-one.  But  in 
Vermont,^  in  Maryland,^  and  perhaps  one  or  two  other  States, 
women  are  considered  of  full  age  at  eighteen,  for  some  purposes. 

The  contract  of  an  infant  (if  not  for  necessaries)  is  voidable. 
That  is,  he  may  disavow  it,  and  so  annul  it,  either  before  his 
majority,  or  within  a  reasonable  time  after  it.^  As  he  may  avoid 
it,  so  he  may  ratify  and  confirm  it.  He  may  do  this  by  word  only. 
But  a  mere  acknowledgment  that  the  debt  exists  is  not  enough.^ 

1  Leader  v.  Barry,  1  Esp.  353 ;  Jeune  v.  "Ward,  2  Stark.  326.  And  if  the  plaintiff 
reply  to  a  plea  of  infancy,  that  defendant,  after  he  became  of  age,  confirmed  the  prom- 
ise, he  need  only  prove  a  promise  at  any  time  hefore  the  commencement  of  the  suit, 
and  the  defendant  must  then  sliow  that  he  was  under  age  at  that  time.  Bigclow  v. 
Grannis,  4  Hill,  20G  ;  Bay  p.  Gunn.  1  Dcnio,  108;  Hartley  v.  Wharton,  11  Ad.  &  E. 
934;  Berth  wick  v.  Carruthcrs,  1  T.  R.  648.  And  see  Harrison  t;.  Clifton,  17  Law 
Jour.  Ex.  233. 

2  See  Sparhawk  w.  Buell,  9  Vt.  42. 

3  Davis  V.  Jacquin,  5  H.  &  J.  100. 

*  The  rule  that  those  contracts  are  voidablc^nly  which  are  for  the  infant's  benefit, 
while  those  wliich  are  prejudicial  arc  ahsolurely  void,  is  adopted  and  recognized  by 
many  authorities.  See  Unitc<l  States  u.  Bainbridge,  1  Mason,  71,  82;  Kecne  v.  Boy- 
cott,"2  H.  Bl.  .51.5  ;  Baylis  v.  Dineley,  3  Maule  &  Selwyn,  477  ;  Latt  v.  Booth,  3  Carr. 
&  Kir.  292;  Kline  r.'Bebee,  6  Conn.  494;  McMinn  ?;.  Richmonds,  6  Yerger,  9; 
Wheaton  v.  East,  5  id.  41 ;  Ridgley  v.  Crandall,  4  Maryl.  435  ;  Eridge  v.  The  State, 
3  G.  &  J.  104 ;  McGan  v.  Marsliall,  7  Humph.  121  ;  Rogers  v.  Hurd,  4  Day,  57 ;  Law- 
son  V.  Lovejoy,  8  Grecnl.  405  ;  Vent  v.  Osgood,  19  Pick.  572.  But  this  distinction  we 
suppose  to  be  practically  obsolete,  the  more  recent  authorities  holding  that  all  acts 
and  contracts  of  infants,  (except,  jierhaps,  the  appointment  of  an  attorney,)  are  voidable 
only,  and  not  absolutely  void.  See  Cole  v.  Pennoyer,  14  111.  158;  Fonda  v.  Van 
Horne,  15  Wend.  631  ;  Breekenbridge's  Heirs  v.  Orm'sby,  1  J.  J.  Marsh.  236;  Scott  v. 
Buchanan,  2  Humph.  468  ;  Parke,  B.,  in  Williams  v.  More,  11  M.  &  W.  256  ;  1  Am. 
Leading  Cases,  103.  Much  of  the  uncertainty  upon  this  question  has  arisen  from  a 
vague  and  indefinite  use  of  the  words  "void"  and  "voidable."  The  student  will 
find  an  admirable  criticism  upon  these  words  by  Mr.  Justice  Bdl,  in  the  case  of  The 
State  V.  Richmond,  6  Post.  232.  An  infant  cannot,  however,  avoid  his  conveyance 
of  real  estate  until  he  becomes  of  age.  Zouch  v.  Parsons,  3  Burr.  1794;  Roof  i\ 
Stafford,  9  Cow.  626.  But  he  may  avoid  a  sale  of  chattels.  Carr  v.  Clough,  6  Post. 
280;  Bool  v.  Mix,  17  Wend.  119;  Shipman  v.  Horton,  17  Conn.  481  ;  Mathewson 
;;.  Jolinson,  1  Hotf.  560. 

^  lu  England,  by  stat.  9  Geo.  4,  c.  14,  §  5,  and  in  Maine,  and  perhaps  some  other  States, 


CU.  I.] 


OF   THE   PARTIES   TO   MERCANTILE   CONTRACTS. 


It  must  be  a  promise  to  pay  the  debt ;  or  such  a  recognition 
of  the  debt  as  may  fairly  be  understood  by  the  creditor  as  ex- 
pressive of  the  intention  to  pay  it ;  for  this  would  be  a  promise 
by  implication.^  It  must  also  be  made  voluntarily,  and  with 
the  purpose  of  assuming  a  liability  from  which  he  knows  that 
the  law  has  discharged  him.^  And  if  it  be  a  conditional  promise, 
the  party  who  would  enforce  it  must  prove  the  condition  to  be 
fulfilled.3 

by  a  similar  statute,  it  is  necessary  that  the  new  promise  or  confirmation  should  be  in 
writing,  signed  by  the  party  to  be  charged  thcreiiy.  Under  this  statute  it  has  been 
decided,  that  any  written  instrument  signed  by  the  party,  which  in  the  case  of  adults 
would  have  amounted  to  the  adoption  of  the  act  of  a  party  acting  as  agent,  will  in  the 
case  of  an  infant  who  has  attained  his  majority  amount  to  a  ratification.  Harris  v. 
Wall,  1  Exch.  122;  Mawson  v.  Blane,  10  "id.  206 ;  Hartley  v.  Wharton,  11  Ad.  &  E. 
934.  It  seems  to  have  been  held  in  Bajdis  v.  Dineley,  3  M.  &  S.  477,  and  intimated 
in  Glamorgan  v.  Lane,  9  Missouri,  446,  that  a  bond  or  other  sealed  instrument  given  by 
an  infant  could  not  be  confirmed  by  parol,  after  full  age.  But  the  better  authorities 
would  seem  to  hold,  that  any  act  of  an  infant,  from  which  his  assent  to  a  deed  ex- 
ecuted during  his  minority  may  be  inferred,  Avill  operate  as  a  confirmation.  Sec 
Wheaton  v.  East,  f>  Yerger,  41  ;  Hoyle  r.  Stowe,  2  Dev.  &  Bat.  320  ;  Houscr  r.  Eey- 
nolds,  1  Hayw.  143.  As  to  what  words  are  sufficient  to  constitute  a  ratification,  in 
Hale  V.  Gerrish,  8  N.  H.  374,  it  was  proved  that  the  defendant,  after  he  became  of 
age,  admitted  that  he  owed  the  debt,  and  said  that  "  the  plaintiff  ought  to  get  his  pay," 
but  refused  to  give  a  note  lest  he  might  be  arrested.  Held  that  such  declaration  was  no 
sufficient  ratification  of  the  original  promise.  And  in  Thrupp  v.  Fielder,  2  Esp.  628, 
it  was  held  that  paying  money  generally  on  account  of  a  bill  was  not  sufficient,  but 
that  in  order  to  constitute  a  ratification,  there  must  l>e  an  express  promise  to  pay.  And 
see  Ford  v.  Phillipps,  1  Pick.  203 ;  Alexander  v.  Hutcheson,  2  Ilawkes,  535  ;  Robbins 
V.  Eaton,  10  N.  H.  561;  Ordinary  v.  Wherry,  1  Bailey,  28:  Benham  v.  Bishop,  9 
Conn. 330. 

'  See  Hale  v.  Gerrish,  supra;  Bigelow  v.  Grannis,  2  Hill,  120;  Willard  i'.  Hewlett, 
19  Wend.  301.  In  Rogers  v.  Hurd,  4  Day,  57,  it  was  held,  that  the  same  evidence 
ought  to  be  required  of  the  confirmation,  after  full  age,  of  a  voidable  contract  made 
by  an  infant,  as  of  the  execution  of  a  new  one:  In  Whitney  v.  Dutch,  14  Mass.  460, 
Parker,  C.  J.,  said  :  "  No  particular  words  seem  necessary  to  a  ratification,  and  pro- 
vided they  import  a  recognition  and  confirmation  of  his  promise,  they  need  not  be  a 
direct  promise  to  pay."  Again,  in  Tibbets  v.  Gerrish,  5  Fost.  41,  it  was  held,  that  to 
sustain  the  issue  of  a  new  promise  upon  a  plea  of  infancy,  a  more  stringent  rule  pre- 
vails than  where  the  defence  is  the  statute  of  limitations ;  that  there  must  be  either 
an  express  ratification  by  a  new  promise  made,  or  such  acts  of  the  individual,  after 
becoming  of  age,  as  to  amount  to  an  unequivocal  ratification  and  promise.  And  see 
Edgerly  v.  Shaw,  5  Fost.  514  ;  Martin  v.  Mayo,  10  Mass.  137  ;  Orvis  v.  Kimball,  3  N. 
H.  314;  Goodsell  r.  Myers,  3  Wend.  479 ;  Benham  v.  Bishop,  9  Conn.  330;  Ford  i\ 
Phillipps,  1  Pick.  202  ;  Wilcox  v.  Roath,  12  Conn.  550;  Hinely  v.  Margaritz,  3  Barr, 
428 ;  Smith  v.  Mayo,  9  Mass.  62  ;  Merchants'  Fire  Ins.  Co.  v.  Grant,  2  Edwards,  544. 
—  The  ratification  must  be  made  before  the  commencement  of  the  suit.  Goodridge 
V.  Ross,  6  Met.  487 ;  Merriam  v.  Wilkins,  6  N.  H.  432  ;  Thing  v.  Libbcy,  16  Maine,  55. 
And  it  must  be  made  to  the  party  himself  or  his  agent.  See  Hoit  v.  Underbill,  9  N.  H. 
436;  Bigelow  r.   Grannis,  2  Hill,  120;  Goodsell  u.  Myers,  3  Wend.  479. 

-  Harmer  v.  KiHing,  5  Esp.  102;  Ford  v.  Phillipps,  1  Pick.  202  ;  Smith  v.  Mayo,  9 
Mass.  64 ;  Curtin  v.  Patton,  1 1  S.  &  li.  307  ;  Brooke  v.  Gaily,  2  Atk.  34 ;  Hinley  v. 
Margaritz,  3  Barr,  428. 

^  In  Cole  V.  Cole,  3  Esp.  159,  the  plaintiff  to  a  plea  of  infancy  replied  a  new  promise 
after  full  age,  and  the  evidence  was  of  a  promise  to  pay  "  when  the  party  was  able  ;  " 
and  it  was  held  that  the  plaintiff  must  prove  that  the  defendant  was  of  al)ility  to  pay. 
And  see  Everson  v.  Carpenter,  17  AVend.  419;  Thompson  v.  Lay,  4  Pick.  48;  Da- 
vis V.  Smith,  4  Esp.  36 ;  Bosford  v.  Saunders,  2  II.  Bl.  116.     But  the  plaintiff  is  not 

1* 


6  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  I. 

If  an  infant's  contract  is  not  avoided,  it  remains  in  force.  But 
the  difficult  question  sometimes  occurs,  what  confirmation  by 
mere  silence,  after  a  person  arrives  at  full  age,  prevents  him  from 
avoiding  his  contract  made  during  his  infancy.  As  a  general  rule, 
mere  silence,  or  the  absence  of  disaffirmance,  is  not  a  confirma- 
tion ;  because  it  is  time  to  disaflirm  the  contract  when  its  en- 
forcement is  sought.^ 

But  if  an  infant  buys  property,  any  unequivocal  act  of  own- 
ership after  majority,  —  as  selling  it,  for  example  —  is-  a  confir- 
mation.2  And  generally,  a  silent  continued  possession  and 
use  of  the  thing  obtained  by  the  contract,  is  evidence  of  a  con- 
firmation;^ and  it  is  much  stronger  if  there  be  a  refusal  to  re- 
deliver the  thing  when  it  can  be  redelivered;*  and  is  perhaps 
conclusive,  when  the  conduct  of  the  party  may  be  construed  as 
a  confirmation,  and  if  not  so  construed  must  be  regarded  as 
fraudulent.^ 

The  great  exception  to  the  rule,  that  an  infant's  contracts  are 
voidable,  is  when  the  promise  or  contract  is  for  necessaries. 
The  rule  itself  i"s  for  the  benefit  and  protection  of  the  infant; 
and  the  same  reason  causes  the  exception;  for  it  cannot  be  for 
the  benefit  of  the  infant  that  he  should  be  unable  to  purchase 
food,  raiment,  and  shelter,  on  a  credit,  if  he  has  no  funds.  The 
same  reason,  however,  enlarges  this  exception,  until  it  covers  not 
only  strict  necessaries,  or  those  without  which  the  infant  might 

bound  to  show  an  ability  to  pay  without  inconvenience.     Martin  v.  Mayo,  10  Mass. 
141  ;  Thompson  v.  J^ay,  supra. 

1  Thing  V.  Libbey,  16  Maine,  55 ;  Smith  v.  Kelly,  13  Met.  309 ;  Dana  v.  Stearns,  3 
Cush.  372.  See  also  editor's  note  to  Dublin  v.  Wicklow  11.  R.  Co.  16  E.  L.  &  E.  556. 
But  see  Thomasson  v.  Boyd,  13  Alab.  419  ;  Delano  v.  Blake,  11  Wend.  85. 

2  See  Cheshire  v.  Barrett,  4  McCord,  241,  where  an  infant  gave  his  note  for  a 
horse,  payable  to  A  or  bearer,  and  kept  the  horse  after  he  became  of  age,  and  then 
sold  him  ;  and  it  was  held  a  confirmation,  and  that  the  bearer  of  the  note,  to  whom  it 
had  been  transferred,  might  recover  on  it.  And  see  Deason  v.  Boyd,  1  Dana,  45  ;  Law- 
son  V.  Lovejoy,  8  Greenl.  405. 

3  Thus,  in  Boydcn  v.  Boyden,  9  Met.  519,  it  was /Wrf,  that  if  an  infant  buys  goods 
on  credit,  and  retains  them  in  his  own  hands,  and  uses  them  for  his  own  purposes,  for 
an  unreasonable  time  after  he  comes  of  age,  without  restoring  them  to  the  seller,  or 
giving  him  notice  of  an  intention  to  avoid  the  contract,  it  operates  as  a  ratification  of 
the  contract,  and  renders  the  buyer  liable  in  an  action  for  the  price  of  the  goods.  See 
also  Eubanks  v.  Peak,  2  Bailey,  497  ;  Alexander  v.  Heriot,  1  Bailey's  Equity,  223. 

*  See  Aldrich  v.  Grimes,  10  N.  H.  194,  where  an  infant  purchased  a  potash  kettle, 
and  gave  his  promissory  note  for  the  price,  it  being  agreed  by  tlie  parties  that  he  might 
try  the  kettle,  and  return  it  if  it  did  not  suit  him.  The  vendor,  after  the  infant  be- 
came of  age,  requested  him  to  return  the  kettle  if  he  did  not  intend  to  keep  it ;  but  he 
retained  and  used  it  a  month  or  two  afterwards.  Held,  that  tliis  was  a  sufficient  ratifi- 
cation of  the  contract,  and  that  an  action  might  be  sustained  on  the  note. 

5  See  Delano  v.  Blake,  11  Wend.  85. 


CH.  I.]  OF   THE   PARTIES   TO   MERCANTILE   CONTRACTS.  7 

perish,  or  would  certainly  be  uncomfortable,  but  all  those  things 
which  are  distinctly  appropriate  to  his  person,  station,  and  means.' 

There  is  no  exact  dividing  line  which  could  make  this  defi- 
nition precise.  But  it  is  settled  that  mercantile  contracts,  as  of 
partnership,^  purchase  and  sale  of  merchandise,^  signing  notes 
and  bills,*  are  not  necessaries,  and  that  all  such  contracts  are 
voidable  by  the  infant.  So,  if  he  gives  his  note  even  for  neces- 
saries, he  is  not  bound  by  it ;  but  may  defend  against  it  on  the 
ground  that  it  was  for  more  than  their  true  value, *nd  the  jury  i 
will  be  instructed  to  give  against  him  only  a  verdict  for  so  much  , 
as  the  necessaries  were  worth.^ 

If  he  borrows  money,  to  expend  in  the  purchase  of  necessaries, 
and  gives  his  note,  the  debt,  or  the  note,  has  been  held,  at  law, 
voidable  by  the  infant.^  But  courts  of  equity  would  give  re- 
lief,'' and  even  at  law  an  infant  is  liable  for  money  paid  at  his 
request  for  necessaries  for  him ;  ^  and  if  he  give  a  note  for 
necessaries  with  a  surety  who  pays  it,  the  surety  may  recover 
against  the  infant.^ 

1  In  Co.  Litt.  172,  a,  it  is  said  :  "An  infant  may  bind  himself  to  pay  for  his  necessary 
meat,  drink,  apparel,  necessary  physic,  and  such  other  necessaries,  and  likewise  for  his 
good  teaching  or  instruction,  whereby  he  may  profit  himself  afterwards."  A  good  com- 
mon school  education  is  a  "necessary;"  but  it  seems  that  a  collegiate  education  is 
not;  at  least  for  all  persons.  Middlebury  College  v.  Chandler,  16  Vt.  683;  Raymond 
r.  LoyI,  10  Barb.  Sup.  C  489;  Peters  v.  Fleming,  6  M.  &  W.  48.  As  to  what  are 
necessaries  for  an  infant  generally,  see  Bradley  v.  Pratt,  23  Vt.  378 ;  Harrison  v. 
Fane,  1  M.  &  Gr.  .530;  Johnson  v.  Lines,  6  W.  &  S.  80;  Hands  v.  Slaney,  8  T.  R. 
578;  Phelps  y.- Worcester,  UN.  H.  51;  Tupper  v.  Cadwell,  12  Met.  559.  And  an 
infant  is  liable  for  necessaries  for  his  wife  and  children.  Chappie  v.  Cooper,  11  M.  & 
W.  252;  Beeler  v.  Young,  1  Bib'b,  152;  Abell  v.  Warren,  4  Vt.  149. 

2  See  Crabtree  v.  May,  1  B.  Mon.  289  ;  Goode  v.  Harrison,  5  B.  &  Aid.  147. 

2  Whittingham  v.  Hill,  Cro.  Jac.494;  Why  wall  v.  Champion,  2  Stra.  1083;  Dilk 
V.  Keighley,  2  Esp.  480 ;  Latt  v.  Booth,  3  Carr.  &  Kir.  292.  But  where  an  infant,  with 
his  guardian's  consent,  carried  on  certain  business,  it  was  held  that  he  might  bind  him- 
self to  pay  for  articles  suitable  and  necessary  for  that  business.  Rundell  v.  Keeler, 
7  Watts,  237.     But  we  should  have  some  doubt  of  this. 

*»See  Ford  v.  Phillipps,  1  Pick.  202.  _  , 

s  It  was  formerly  held  that  no  action  could  be  maintained  against  an  infant  upon  a 
promissory  note,  although  given  for  necessaries.  See  Mine  v.  Richmonds,  6  Yerger, 
9;  McCrillis  v.  How,  3  N.  H.  348;  Bouchelle  u.  Clary,  3  Brevard,  194;  Swasey  v. 
Vanderheyden,  10  Johns.  33;  Fenton  v.  White,  1  Southard,  100;  Hawks  v.  Deal, 
3  McCord,  257.  But  the  later  cases  founded  upon  the  better  reasons  uphold  the 
rule  stated  in  the  text.  See  Bradly  v.  Pratt.  23  Vt.  378  ;  Stone  v.  Dennison,  13  Pick. 
1 ;  Earl  v.  Reed,  10  Met.  387  ;  Dubose  v.  Whedon,  4  McCord,  221. 

•^  See  Bent  v.  Manning,  10  Vt.  225  ;  Beeler  v.  Young,  1  Bibb,  519  ;  Hickman  v. 
Hall,  5  Littell,  338 ;   Walker  v.  Simpson,  7  W.  &  S.  83. 

7  See  Marlow  v.  Pitfield,  1  P.  W.  559,  1  Vesey,  249. 

8  Randall  v.  Sweet,  1  Denio,  460 ;  Clark  v.  Leslie,  5  Esp.  28.  In  Bent  v.  Manning, 
supra,  the  court  considered  it  questionable  whether  courts  of  law  might  not  now 
consider  money  to  a  certain  extent  necessary  to  be  furnished  a  minor  under  some 
circumstances. 

s  See  Conu  v.  Coburn,  7  N.  H.  368  ;  Haine  v.  Terrant,  2  Hill,  S.  C.  400. 


•8  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  I. 

If  an  infant  avoid  a  contract,  he  can  take  no  benefit  from  it ; 
thus,  if  he  contracts  to  sell,  and  refuses  to  deliver,  he  cannot  de- 
mand the  price ;  or  if  he  contracts  to  buy,  and  refuses  the  price, 
he  cannot  demand  the  thing  soldJ 

If  he  fraudulently  represented  himself  as  of  age,  when  he  was 
not,  and  so  made  a  contract  which  he  afterwards  sought  to  avoid, 
this  fraud  will  not  prevent  his  avoiding  the  contract  ;2  but  for 
the  fraud  itself  he  is  answerable  as  an  adult  would  be.^  So  if  he 
disaffirms  a  sale,  for  which  he  has  received  the  money,  he  must 
return  the  money  ;  because  keeping  it  would  in  fact  be  a  confir- 
mation of  the  sale.*  So  if  after  his  majority  he  destroys  or  puts 
out  of  his  hands  a  thing  bought  while  an  infant,  he  cannot  now 
demand  his  money  back,  as  he  might  have  done  on  tendering  the 
thing  bought;  for  by  his  disposal  of  it  he  has  acted  as  owner, 
and  confirmed  the  sale.^ 

In  general,  if  an  infant  avoids  a  contract  on  which  he  has  ad- 
vanced money,  and  it  appears  that  he  has  received  from  the 
other  party  an  adequate  consideration  for  the  money  so  advanced, 
which  he  cannot  or  will  not  restore,  he  cannot  recover  the  money 
back.  But  if  an  infant  has  engaged  to  labor  for  a  certain  period, 
and,  after  some  part  of  the  work  is  performed,  rescinds  the  con- 
tract, he  can  recover  on  a  quantum  meruit  for  the  work  he  has 
done.^ 

The  contract  of  an  infant  is  voidable  only  by  him,  or  by  his 

1  See  Harney  v.  Owen,  4  Blackf.  337.  Thus,  in  Ottman  v.  Moak,  3  Sandf.  Ch.  431, 
where  an  infant  purchased  goods,  and  mortgaged  them  to  secure  the  purchase-money, 
it  was  held  that  he  might,  after  arriving  at  maturity,  affirm  both  the  purchase  and  the 
mortgage,  or  disaffirm  both,  but  he  could  not  disaffirm  the  mortgage  and  keep  the  goods. 
And  see  Badger  v.  Phinncy,  15  Mass.  35'J  ;  Taft  v.  Pike,  14  Vt.  405;  Farr  v.  Sum- 
ner, 12  Vt.  28;  Hubbard  v.  Cummings,  1  Greenl.  13;  Strain  v.  Wright,  7  Geo.  568. 

-  Burley  r.  Russell,  ION.  H.  184.  See  also  Stoolfoos  y.  Jenkins,  12  S.  &  R.  399  ; 
Conroe  v.  Birdsall,  1  Johns.  Cases,  127.     But  see  Jennings  v.  Whitaker,  4  Monroae,  51. 

^  Com.  Dig.  Action  on  the  case  for  Deceit,  A,  10  ;  2  Kent's  Comm.  241  ;  Pitts  v. 
Hall,  9  N.  H.  441.  But  see  Browu  v.  McClune,  5  Sandf.  224  ;  Price  v.  Hewitt,  18  E. 
L.  &  E.  522. 

*  Bailey  v.  Bamberger,  11  B.  Monroe,  113;  Badger  v.  Phinney,  15  Mass.  363 ;  Hub- 
bard i;.  Cummings,  1  Greenl.  13  ;  Smith  v.  Evans,  5  Humph.' 70;  Taft  v.  Pike,  14 
Verm.  405;  Carr  v.  Clough,  6  Post.  280;  Bartholomew?;.  Finnemore,  17  Barb.  428. 
And  he  who  seeks  the  aid  of  a  court  of  equity  to  avoid  his  conveyance,  on  the  ground 
of  infancy,  must  refund  the  consideration-money  received  by  him.  Smiths.  Evans,  5 
Humph.  70;  Hielger  v.  Bennett,  3  Edw.  Ch.  222. 

^  See  Hubbard  v.  Cummings,  1  Greenl.  13  ;  Badger  v.  Phinney,  15  Mass.  363  ;  Farr 
V.  Sumner,  12  Vt.  28;  Taft  r.  Pike,  14  Vt.  405;  Lawson  v.  Lovejoy,  8  Greenl.  405. 

^  See  Holmes  v.  Blogg,  8  Taunton,  508  ;  Corpe  v.  Overton,  lOBing.  252;  McCoy  v. 
Huffman,  8  Cow.  84  ;  Medbury  v.  Watrous,  7  Hill,  110  ;  Vent  v.  Osgood,  19  Pick.  572  ; 
Breed  v.  Judd,  1  Grav,  455.  And  see  also.  Moses  v.  Stevens,  2  Pick.  332 ;  Thomas 
V.  Dike,  11  Vt.  273  ;  Hoxie  v.  Lincoln,  25  Vt.  206  ;  Lufkin  v.  Mayall,  5  Post.  82. 


en.  I.] 


OF   THE  PAKTIES   TO   MERCANTILE   CONTRACTS.  9 


legal  representatives,  and  not  by  the  other  party.^  The  election 
to  avoid  or  confirm  belong  to  the  infant  alone;  and  his  having 
this  right  does  not  affect  the  obligation  of  the  other  party.^  There- 
fore, one  who  gives  a  note  to  an  infant,  or  makes  any  other 
mercantile  contract  with  him,  must  abide  by  it,  although  the  infant 
may,  if  he  choose,  annul  it.'^ 

But  if  the  note  were  given  or  the  contract  made  by  a  fraud  on 
the  part  of  the  infant,  the  injured  party  has  the  same  right  of  de- 
fending against  it  on  this  ground  as  if  the  fraudulent  party  were 
not  an  infant.  And,  for  this  purpose,  a  wilfully  false  represen- 
tation of  the  infant  that  he  has  reached  his  majority,  would  be  a 
sufficient  fraud  to  enable  the  party  dealing  with  him  to  set  the 
contract  aside.* 


SECTION  III. 


OF   MARRIED   WOMKX. 

By  the  common  law  of  England  and  of  this  country,  a  mar- 
ried woman  is  wholly  incapable  of  entering  into  mercantile  con- 

1  Gullett  V.  Lamberton,  1  Eng.  [Ark.]  109;  Parker  i-.  Baker,  1  Clark's  Ch.  136;  Rose 
V.  Daniel,  3  Brev.  438;  Voorhees  v.  Wait,  3  Green,  343  ;  Jackson  v.  Majo,  II  Mass. 
147  ;  Hussey  v.  Jewett,  9  Mass.  100  ;  Marten  v.  Mayo,  10  Mass.  137. 
'  2  See  McGinn  v.  Shaeifer,  7  Watts,  412  ;  Bovden  v.  Boyden,  9  Met.  519  ;  Hunt  v. 
Peake,  5  Cow.  475;  Pool  v.  Pratt,  1  D.  Cliip.  252  ;  Willard  r.  Stone,  7  Cow.  22;  Holt 
V.  Ward  Clarenieux,  2  Strange,  937.     And  see  Cannon  v.  Alsbury,  1  A.  Iv.  Marsh.  70. 

3  Thus,  in  Warwick  v.  Bruce,  2  M.  &  S.  205,  where  the  defendant  agreed  to  sell  to  the 
plaintiff  (an  infant)  all  the  potatoes  tlipn  growing  on  three  acres,  at  so  much  per  acre, 
to  be  dug  up  and  carried  away  by  the  plaintiff,  and  the  plaintiff  paid  £40  to  the  de- 
fendant under  the  agreement,  and  dug  a  part,  and  carried  away  a  part  of  those  dug,  but 
was  prevented  by  the  defendant  from  digging  and  carrying  away  the  residue,  it  was 
held^  that  he  was  entitled  to  recover  for  this  breach  of  the  agreement.  And  Lord  El- 
lenhorowjli  said  :  "It  occui'red  to  me  at  the  trial,  on  the  first  view  of  the  case,  that  as  an 
infant  could  not  trade,  and  as  this  was  an  executory  contract,  he  could  not  maintain  an 
action  for  the  breach  of  it;  but  if  I  had  adverted  to  the  circumstance  of  its  being  in 
part  executed  l)y  the  infant,  for  he  had  paid  £40,  and  therefore  it  was  most  imme- 
diately for  his  benefit  that  he  should  be  enabled  to  sue  upon  it,  otherwise  he  might  lose 
the  benefit  of  such  payment,  I  should  probably  have  held  otherwise.  And  I  certainly 
was  under  a  mi-itake  in  not  adverting  to  the  distinction  between  the  case  of  an  infant 
plaintiff  or  defendant.  If  the  defendant  had  been  the  infant,  what  I  ruled  would  have 
been  correct,  but  here  the  plaintiff  is  the  infant,  and  sues  u]jon  a  contract  partlv  exe- 
cuted by  him,  which  it  is  clear  that  he  may  do.  It  is  certainly  for  the  benefit  of  infants, 
where  tiiey  have  given  the  fair  value  for  any  article  of  produce,  that  they  should  have 
the  thing  contracted  for.  And  it  is  not  necessary  that  they  should  wait  until  they 
come  of  age  in  order  to  bring  the  action.  A  hundred  actions  have  been  brouglit  by  in- 
fants for  breaclies  of  promise  of  marriage,  and  I  am  not  aware  that  this  objection  has 
ever  been  taken  since  the  case  in  Strange." 

*  Walker  v.  Davis,  1  Gray,  506.  And  see  Humphry  v.  Douglass,  10  Vt.  71  ;  Lewis 
V.  Littlefield,  15  Maine,  233  ;  Bullock  r.  Babcock,  3  Wend.  391. 


10  ELEMENTS   OF   MERCANTILE   LA^Y..  [CH.  I. 

tracts  on  her  own  account.  By  the  fact  of  marriage,  her  husband 
becomes  possessed  of  all  her  real  estate  during  her  life,  and  if  a 
living  child  be  born  of  the  marriage,  he  has  her  real  estate  during 
his  own  life,  if  he  survive  her.^ 

All  the  personal  property  which  she  has  in  actual  possession 
becomes  absolutely  his,  as  entirely  as  if  she  had  made  a  transfer 
of  it  to  him.  But  by  property  in  possession  the  law  means  only 
her  goods  and  chattels ;  or  things  which  can  be  handled  ;  and 
which  a'ctually  are  in  her  hands,  or  under  her  direct  and  imme- 
diate control.  If  she  have  notes  of  hand,  money  due  her,  or 
shares  in  various  stocks,  these  are  not  considered  as  things  in  pos- 
session, but  as  things  in  action,  or,  as  the  old  Norman  word  is 
still  used,  choses  in  action.  The  law  as  to  these  is  diffei»nt.  The 
husband  may,  if  he  pleases,  reduce  them  to  his  possession,  and 
so  make  them  absolutely  his  own.  It  is  sometimes  difficult  to 
decide  whether  the  husband  has  reduced  them  to  possession. 
In  general,  he  does  this  by  any  act  which  is  distinctly  an  act  of 
ownership ;  as  if  he  demands  and  collects  the  debts  due  to  her,^ 
or  indorses  her  notes  —  which  he  can  do  in  his  own  name^ — and 
sells  them,^  or  has  the  stock  transferred  to  his  own  name,^ 
or,  in  general,  makes  any  final  and  effectual  disposition  of  these 
choses  in  action.^ 

If,  however,  he  does  not  reduce  them  to  possession,  and  dies, 
and  she  survives  him,   her  whole  right  and  property  revive  at* 
his  death,  without  any  interest  whatever  in  his  representatives.^ 
And  even  if  he  disposes  of  them  by  will,  this  is  ineffectual,  un- 
less he  had  reduced  them  into  his  possession  while  he  lived." 

If,  however,  he  survives  her,  he  will  be  made,  if  he  wishes  it. 

1  Co.  Litt.  351,  a ;  2  Bl.  Com.  126  ;  4  Kent's  Com.  26  ;  Paine's  case,  8  Rep.  34  ;  Mer- 
cer V.  Selden,  1  How.  37. 

2  See  Bates  v.  Dandy,  2  Atk.  206 ;  Earl  of  Salisbury  v.  Newton,  1  Eden,  370 ; 
Johnson  v.  Johnson,  1  Jac.  &  W.  456. 

^  Mason  v.  Morgan,  2  A.  &  E.  30 ;  Scarpellini  v.  Atchison,  7  Q.  B.  864.  But  in 
Latourette  v.  Wiliiams,  1  Barb.  9,  it  was  hekl,  that  the  pledge  of  a  note  of  the  wife  by 
the  husband,  which  he  afterwards  redeemed,  was  not  such  a  reduction  into  possession 
as  destroyed  the  interest  of  the  wife. 

*  Burnham  v.  Bennett,  2  Coll.  C.  C.  254. 

^  See,  in  addition  to  the  cases  already  cited,  Garforth  v.  Bradley,  2  Ves.  675 ;  Carteret 
I'.  Paschal,  3  P.  Wms.  197  ;  Schuyler  v.  Hoyle,  5  Johns.  Ch.  196 ;  Hart  v.  Stephen,  6 
Q.  B.  937  :  Timbers  ;;.  Katz,  6  W'  &  S.  290. 

'^  Hayward  v.  Hayward,  20  Pick.  517  ;  Co.  Litt.  351,  b;  Estate  of  Kintzenger,  2  Ash- 
mead  455  ;  Stephens  v.  Beal,  4  Georgia,  319  ;  Killcrease  v.  Killcrcase,  7  How.  [Miss.] 
311  ;  Rogers  v.  liumpass,  4  Ired.  Eq.  585.  And  so  if  the  parties  arc  divorced  a  vinculo. 
Legg  V.  Legg,  8  Mass.  99. 

■?  See  Blunt  v.  Bestland,  5  Ves.  515. 


en.  I.]  OF   THE   PARTIES   TO   MERCANTILE   CONTRACTS.  11 

her  administrator,  and  then  can  collect  all  her  chores  in  action^ 
and  hold  them  or  their  proceeds  as  his  own.^  And  if  she  dies, 
and  then  he  dies  before  he  has  collected  these  choses  in  action, 
administration  on  his  wife's  effects  will  be  granted  to  his  next  of 
kin,  and  not  to  hers;  and  when  collected  they  will  belong' to  his 
estate.2 

On  the  other  hand,  the  husband  is  liable,  with  her,  for  all  the 
debts  for  which  his  wife  was  liable  when  he  married  hcr.^  This 
is  true  whether  they  were  then  payable,  or  did  not  mature  until 
after  the  marriage ;  and  whether  he  received  any  thing  with  her 
or  not.*  If  he  dies  before  they  are  paid,  his  estate  is  not  liable, 
even  if  he  had  a  fortune  with  her,  and  that  fortune  goes  to  his 
heirs  or  his  creditors,  and  her  creditors  get  nothing.  So  it  is  if 
the  wife  dies  before  the  creditor  recovers  a  judgment  against  the 
husband,  and  he  then  retains  all  her  fortune.^  But  her  responsi- 
bility revives  at  his  death,  and  she  is  liable  as  before  marriage, 
even  if  she  carried  him  a  fortune,  and  all  her  fortune  went,  as 
above  stated,  to  his  representatives.*^  But  if  she  dies,  leaving 
choses  in  action  not  reduced  by  the  husband  to  possession,  and 
he  reduces  them  to  his  possession  as  her  administrator,  he  must 
apply  them  to  the  payment  of  her  debts,  and  can  hold  to  him- 
self only  what  is  left  after  such  payment."^ 

Such,  we  have  said,  is  the  common  law  of  England  and  of 
this  country.  But  in  several  of  our  States  it  is  essentially  modi- 
fied by  statutory  provisions.  These  we  do  not  speak  of  in  any 
detail,  as  they  not  only  vary  very  much  in  different  States,  but 
are  fluctuating  and  changing  rapidly,  in  most  of  the  States  which 

1  1  Roll.  Abr.  910 ;  Garforth  v.  Bradly,  2  Vesey,  676 ;  Elliot  v.  Collier,  3  Atk.  526, 
1  Vesey,  15  ;  per  Lord  Tenterden,  in  Richards  v.  Richards,  2  B.  &  Ad.  447.  And  see 
Drew  V.  Lon^,  21  E.  L.  &  E.  339. 

-  See  Fielder  v.  Hanger,  3  Hagg.  Eccl.  Rep.  770  ;  2  Kent's  Com.  118. 

3  See  I  Bl.  Com.  444  ;  2  Kent's  Com.  128 ;  Morris  v.  Norfolk,  1  Taunt.  212 ;  Howes 
r.  Bigelow,  13  Mass.  384;  Pitkin  v.  Thompson,  13  Pick.  64;  Haines  v.  Corliss,  4 
Mass.  659.  See  also  Dodgson  v.  Bell,  3  E.  L.  &  E.  542.  And  although  he  was  an  in- 
fant at  the  time.     Butler  v.  Breck.  7   Met.  164;  Roach  v.  Quick,  9  Wend.  238. 

*  See  Heard  v.  Stamford,  Cases  Temp.  Talbot,  173,  3  P.  Wms.  409;  Thomond  v. 
Earl  of  Suffolk,  1  P.  Wms.  469. 

*  See  Rol.  Abr.  351.  In  Heard  v.  Stamford,  3  P.  Wms.  400,  Lord  Chancellor  Talhot 
said:  "It  is  extreme!)'  clear,  that  by  law  the  husband  is  liable  to  the  wife's  debts  only 
during  coverture,  unless  the  creditor  recovers  judgment  against  him  in  the  wife's  life- 
time." And  see  Witherspoon  v.  Dubose,  1  Bailey,  Eq.  166;  Howes  v.  Bigelow,  13 
Mass.  384;  Chaplin  v.  Moore,  7  Monroe,  179  ;  Buckner  v.  Smith,  4  Des.  371  ;  Nutz  v. 
Retter,  1  Watts,  229. 

•>  Woodman  r.  Chapman.  1  Camp.  189. 
'  Heard  v.  Stamford,  3  P.  Wms.  409. 


12  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  I. 

deal  with  them  at  all.  It  is  in  truth  a  very  difficult  question,  how 
far  it  is  well  to  abrogate  the  old  law,  which  was  of  feudal  origin, 
and  so  far  inappropriate  to  our  own  state  of  society.  After 
sufficient  experiment,  we  shall  know  better  than  we  know  now 
how  to  pay  a  due  regard  to  the  property  and  the  rights  of  the 
wife,  and  yet  preserve  the  marriage  relation  from  the  mischiefs 
and  degradation  which  must  ensue  if  husband  and  wife  are  no 
longer  one  person  in  any  sense,  but  may  bargain  together,  and 
buy,  and  sell,  and  own,  and  pay,  with,  or  from,  or  to  each  other? 
.precisely  like  other  persons. 

It  should  be  added,  that  the  wife  may  be  the  agent  of  the 
husband,  and  transact  for  him  his  mercantile  concerns,  making,, 
accepting,  or  indorsing  bills  or  notes,  purchasing  goods,  rendering 
bills,  collecting  money  and  receipting  for  it,  and  in  general  enter, 
ing  into  any  contract  so  as  to  bind  him,  if  she  has  his  authority 
to  do  so.^  Further,  if  she  is  in  the  habit  of  thus  acting  for  him, 
and  he  knows  it,  and  does  not  object,  and  still  more  if  he  by 
his  own  acts  sanctions  hers,  it  will  be  deemed  that  he  has  given 
her  authority  to  act  for  him.^ 

So  if  a  woman  carries  on  trade  personally,  and  to  all  ap- 
pearance as  a  sole  trader,  and  her  husband  knows  this,  and 
makes  no  objection,  especially  if  he  resides  with  her,  and  still 
more  if  he  is  benefited  by  the  trade,  or  takes  the  profit  in  any 
way,  it  will  be  understood  —  in  the  absence  of  sufficient  testi- 
mony to  the  contrary  —  that  she  is  acting  as  his  agent,  and  he 
will  be  liable  on  her  trade  contracts,  although  made  in  her  own 
name.^ 

In  this  country  there  seems  to  be  a  disposition,  both  in  the 
legislatures  and  in  the  courts,  to  hold  that  a  woman  who  is  de- 
serted by  her  husband,  and  who  is  laboring  successfully  to  main- 
tain herself,  and  perhaps  her  children,  as  a  trader,  is  in  substance 

1  Prestwick  v.  Marshall,  7  Blng.  5G5.  And  see  Barlow  v.  Bishop,  1  East,  432 ;  Colis 
V.  Davis,  1  Camp.  485  ;  Minard  v.  Mead,  7  Wend.  68 ;  Sinders  v.  Bradwell,  5  C.  B.  583. 

2  Cliiford  v.  Burton,  1  Biug.  199;  Felker  j;.  Emerson,  16  Vt.  653;  Smalipiece  i?. 
Dawes,  7  C.  &  P.  40. 

8  Thus,  in  Petty  v.  Anderson,  2  C.  &  P.  38,  it  was  held,  that  if  husband  and  wife  are 
living  together,  and  business  is  carried  on  in  the  house  in  wliich  they  live,  though 
the  wife's  name  only  appears  in  the  purciiase  of  goods,  in  the  parish  rates,  and  in  a  con- 
tract with  the  parish  otHcers,  yet  the  husband  partaking  of  the  profits  of  the  trade,  and 
being  aware  of  and  assenting  to  tiie  dealings,  is  liable  in  an  action  for  goods  delivered 
at  their  house  for  the  purpose  of  this  trade,  though  the  bills  of  parcels  are  headed  in 
the  wife's  name.  And  see  Huckmau  i'.  Fcrnie,  3  M.  &  W.  505  ;  Plimmer  v.  Sells,  3 
N.  &  Mann.  422. 


en.  I.]  OF   THE   PARTIES   TO   MERCANTILE   CONTRACTS.  13 

a  sole  trader,  liable  on  her  own  contracts,  and  entitled  to  her 
own  earnings.  If  this  were  held,  it  would  seem  to  follow,  of 
course,  that  her  husband  should  not  be  liable  for  the  debts  she 
contracts.  But  so  great  a  change  as  this  can  hardly  be  intro- 
duced by  adjudication  alone,  in  the  absence  of  distinct  statutory 
provisions. 


'14  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  II. 

CHAPTER   II. 

OF   AGREEMENT   AND   ASSENT. 

SECTION  I. 

OF  THE  LEGAL  MEANING  OF  AGREEMENT. 

,/  No  contract  which  the  law  will  recognize  and  enforce  exists, 

^      until  the  parties  to  it  have  agreed  upon  the  same  thing,  in  the 
/'      same  sense. ^ 
j>-  There  is  an  apparent  exception  to  this  rule,  when,  for  exam- 

ple, A  declares  that  he  was  not  understood  by  B,  or  did  not  un- 
derstand B,  in  a  certain  transaction,  and  that  there  is  therefore 
no  bargain  between  them  ;  and  B  replies  by  showing  that  the 
language  used  on  both  sides  was  explicit  and  unequivocal,  and 
constituted  a  distinct  contract.  Here,  B  would  prevail.  The  rea- 
son is,  that  the  law  presumes  that  every  person  means  that  which 
he  distinctly  says.  If  A  had  offered  to  sell  B  his  horse  for  twenty 
dollars,  and  received  the  money,  and  then  tendered  to  B  his  cow, 
on  the  ground  that  he  was  thinking  only  of  his  cow,  and  used 
the  word  horse  by  mistake,  this  would  not  avoid  his  obligation, 
unless  he  could  show  that  the  mistake  was  known  to  B  ;  and 
then  the  bargain  would  be  fraudulent  on  B's  part.  This  would 
be  an  extreme  case ;  but  difficult  questions  of  this  sort,  often 
arise.  If  A  had  agreed  to  sell,  and  had  actaaliy  delivered,  a 
cargo  of  shingles  at  "  $3.25,"  supposing  that  he  was  to  receive 
that  price  for  a  "  bunch,"  which  contains  five  hundred,  and  B 

1  In  Hutchinson  v.  Bovvker,  5  M.  &  W.  535,  which  was  assumpsit  for  non-delivery  of 
barley,  defendants  by  letter  offered  to  the  i)laintiffs  a  certain  quantity  of  "good"  bar- 
ley, at  a  certain  price.  Plaintiffs  replied  :  "  We  accept  your  offer,  expecting  you 
will  give  us  fine  barley  and  full  weight."  The  jury  found  that  there  was  a  distinc- 
tion in  the  trade  between  the  words  "good"  and  "  Hne,"  and  the  court  held  that  there 
was  not  a  sufficient  acceptance.  So  in  Bruce  v.  Pearson,  3  Johns.  534,  where  a  person 
sent  an  order  to  a  merchant  for  a  particular  quantity  of  goods  on  certain  terms  of 
credit,  and  the  merchant  sent  a  less  quantity  of  goods,  at  a  shorter  credit,  and  the  goods 
were  lost  by  the  way,  it  was  laid  tiiat  the  merchant  must  bear  the  loss  ;  for  there  was 
no  contract,  express  or  implied,  between  the  parties.  See  further,  Hazard  v.  New 
England  Marine  Ins.  Co.  1  Sumner,  218  ;  Greene  v.  Bateman,  2  \V.  &  M.  359  ;  Tat- 
tle V.  Love,  7  Johns.  470  ;  Eliason  v.  Henshaw,  4  Wheat.  225 ;  Falls  v.  Gaither,  9 
Porter,  605  ;  Hamilton  v.  Terry,  10  E.  L.  &  E.  473. 


CII.  II.]  or  AGREEMENT  AND  ASSENT.  15 

supposed  he  had  bought  them  at  that  price  for  a  "  thousand," 
which  view  should  prevail  ?  The  answer  would  be,  first,  that 
if  there  was,  honestly  and  actually,  a  mutual  mistake,  there  was 
no  contract,  and  the  shingles  should  be  returned.  But,  sec- 
ondly, if  a  jury  should  be  satisfied,  from  the  words  used,  the 
usage  prevailing  where  the  bargain  was  made  and  known  to  the 
parties,  or  other  circumstances  attending  the  bargain,  that  B 
knew  that  A  was  expecting  that  price  for  a  bunch,  B  would 
have  to  pay  it;  and  if  they  were  satisfied  that  A  knew  that  B 
supposed  himself  to  be  buying  the  shingles  by  the  thousand, 
then  A  could  not  reclaim  the  shingles,  nor  recover  more  than  that 
price.i 

In  construing  a  contract,  the  actual  and  honest  intention  of   ,, 
the  parties  is   always  regarded  as  an  jmportant^uide.^     But  it 
musr^fh&ifinfentional'ex pressed  in  the  contract.^    If  the  terms  , 
of  the  contract  be  wholly  unambiguous,  there  is  no  need  of,  and 
no  room  for,  construction.^ 

If  the  parties,  or  either  of  them,  show  that  a  bargain  was  hon- 
estly but  mistakenly  made,  which  was  materially  different  from 
that  intended  to  be  made,  it  may  be  a  good  ground  for  declaring! 
that  there  was  no  contract.     But  it  would  not  be  a  good  ground' 


1  Greene  v.  Bateman,  2  W.  &  M.  359.  And  see  Hazard  v.  New  England  Marine 
Ins.  Co.  1  Sumner,  218;  Ketchum  v.  Catlin,  21  Vt.  191  ;  Winsor  v.  Dillaway,  4  Met. 
221.  This  last  case  was  indebitatus  assumpsil  to  recover  commission  on  the  sale  of  a 
ship.  Both  parties  offered  evidence,  one  to  prove,  and  the  other  to  disprove,  that  it  is 
the  usage  of  ship-brokers  in  Boston,  whenever  they  bring  together  a  ship-owner  and  a 
purchaser,  and  the  owner  sells  the  ship  to  such  purchaser,  to  charge  the  usual  com- 
mission ;  and  the  jury  were  instructed  that  if  such  usage  was  proved  to  exist,  and  the 
defendants  knew  that  such  usage  existed,  it  raised  an  implied  promise  to  pay  the  com- 
mission. And  this  instruction  was  held  to  be  correct.  See  also  Eogers  v.  Mechanics 
Ins.  Co.  1  Story,  603  ;  The  Schooner  Reeside,  2  Sumner,  567;  The  Taunton  Copper 
Co.  V.  Merchants'  Ins.  Co.  22  Pick.  115. 

-  Thus,  in  Parkhurst  v.  Smith,  Willes,  332,  Wilks,  C.  J.,  said  :  "Whenever  it  is  neces- 
sary to  give  an  opinion  upon  the  doubtful  words  of  a  deed,  the  first  thing  we  ought 
to  inquire  into  is,  what  was  the  intention  of  the  parties.  If  the  intent  be  as  doubtful 
as  the  words,  it  will  be  of  no  assistance  at  all.  But  if  the  intent  of  the  parties  be  plain 
and  clear,  wc  ought  if  possible  to  put  such  a  construction  on  the  doubtful  words  of  a 
deed  as  will  best  answer  the  intention  of  the  parties,  and  reject  that  construction  which 
manifestly  tends  to  overturn  and  destroy  it."  And  see  Hunter  v.  Miller,  6  B.  Mon- 
roe, 619  ;"'Morey  v.  Homan,  10  Vt.  565  ;  Gray  v.  Clark,  11  Vt.  583  ;  Ford  v.  Beck,  11 
Q.  B.  866. 

3  In  Parkhurst  i\  Smith,  supra,  Wil/es,  C.  J.,  further  said  :  "  I  admit  that  though  the 
intention  of  the  parties  be  never  so  clear,  it  cannot  take  place  contrary  to  the  rules  of 
law,  nor  can  we  put  words  in  a  deed  which  are  not  there,  nor  put  a  construction  on 
the  words  of  a  deed  directly  contrary  to  the  plain  sense  of  them."  And  see  Gibson  v. 
Minet,  1  H.  Bl.  569,  614,  per  Eipr,  C.  B. 

*  Benjamin  v.  McCouncU,  4  Gilm.  536 ;  Strohccker  v.  The  Farmers'  Bank,  6  Barr, 
41. 


16  ELEMENTS   OF  MEKCANTILE   LAW.  [CH.  II. 

for  substituting  the  contract  they  had  not  made,  but  intended  to, 
for  that  which  they  had  made  and  had  not  intended  to  make. 

On  this  subject  there  is  another  rule  of  frequent  application  ; 
namely,  that  when  any  written  instrument  does  not  express  the 
real  intention  of  the  parties  in  consequence  of  some  mistake  in 
the  language  used,  as  by  the  use  of  one  word  when  the  parties 
intended  another,  such  instrument  will  be  corrected  by  a  court 
of  equity,  and  made  to  conform  to  what  the  parties  intended.' 

Bat  only  mistakes  of  fact  can  be  corrected  ;  no  man  being  per- 
mitted to  take  advantage  of  a  mistake  of  the  law,  either  to  en- 
force a  right,  or  avoid  an  obligation  ;  for  it  would  be  obviously 
dangerous  and  unwise  to  encourage  ignorance  of  the  law,  by 
permitting  a  party  to  profit,  or  to  escape,  by  his  ignorance.^  But 
the  law  which  one  is  required  at  his  peril  to  know,  is  the  law  of 
his  own  country.  Ignorance  of  the  law  of  a  foreign  state  is 
ignorance  of  fact.  In  this  respect  the  several  States  of  the  Union 
are  foreign  to  each  other.  Hence,  money  paid  through  ignorance 
or  mistake  of  the  law  of  another  State  may  be  recovered  back.^ 

Fraud  annuls  all  obligation  and  all  contracts  into  which  it  en- 
ters, and  the  law  relieves  the  party  defrauded.  But  if  both  of  the 
parties  are  fraudulent,  neither  can  take  advantage  of  the  fraud 
of  the  other.^ 

1  Beaumout  v.  Bramley,  Tyr.  &  Russ.  41 ;  Rogers  v.  Earl,  1  Dick.  294  ;  Simmons  v. 
North,  3  S.  &  M.  67  ;  Tiltou  v.  Tilton,  9  N.  H.  385  ;  Craig  i-.  Kittretlge,  3  Fost.  231. 

-  Storrs  V.  Barker,  6  Johns.  Ch.  16G  ;  Shatwell  v.  Murray,  1  Joiins.  Ch.  512  ;  Campbell 
V.  Carter,  14  111.  28G ;  Hall  v.  Reed,  2  Barb.  Ch.  501  ;  Dupre  v.  Thompson,  4  Barb.  279. 

3  Haven  v.  Foster,  9  Pick.  112  ;  Norton  v.  Harden,  3  Shepley,  45. 

*  In  Hoitt  V.  Holcomb,  3  Fost.  554,  Bell,  J.,  said  :  "  Frand  vitiates  every  thing,  con- 
tracts, obligations,  deeds  of  conveyance,  and  even  the  records  and  judgments  of  courts." 
And  see  Wilson  v.  Green,  25  Vt.  450;  Munn  v.  Worrall,  16  Barb.  221  ;  Spindles  v. 
Atkinson,  3  Md.  409;  Ford  v.  Aikin,  4  Rich.  121  ;  Harris  v.  Ranson,  24  Miss.  504. 
But  no  party  can  avail  himself  of  his  own  fraud,  either  in  maintaining  or  defending 
a  suit.  Jones  v.  Yates,  9  B.  &  C.  532;  Taylor  v.  Weld,  5  Mass.  116;  Ayers  v.  Hew- 
ett,  9  Maine,  281  ;  HoUis  v.  Morris,  2  Harring.  128.  And  one  who  gives  a  fraudulent 
bill  of  sale  to  defraud  his  creditors  cannot  set  it  aside.  Bessey  v.  Windham.  6  Q.  B. 
166;  Nichols  v.  Patten,  18  Maine,  231.  For  the  law  where  both  parties  are  fraudulent, 
see  Gondy  v.  Gebhart.  1  Ohio  St.  262;  Warburtou  v.  Aker,  I  McLean,  460;  Nellis  v. 
Clark,  20"  Wend.  24;  Smith  v.  Hubbs,  1  Fairf.  71. 


CH.   II.]  OF    AGREEMENT  AND   ASSENT.  17 


SECTION  II. 


WHAT   IS   AN  ASSENT. 


The  most  important  application  of  the  rule  stated  at  the  begin- 
ning of  this  chapter,  is  the  requirement  that  an  acceptance  of  a 
proposition  must  be  a  simple  and  direct  affirmative,  in  order  to 
constitute  a  contract.  For  if  the  party  receiving  the  proposition 
or  offer,  accepts  it  on  any  condition,  or  with  any  change  of  its 
terms  or  provisions  which  is  not  altogether  immaterial,  it  is  no 
contract  until  the  party  making  the  offer  consents  to  these  mod 
ifications.' 

Therefore,  if  a  party  offers  to  buy  certain  goods  at  a  certain 
price,  and  directs  that  the  goods  shall  be  sent  to  him,  and  the 
owner  accepts  the  offer  and  sends  the  goods  as  directed,  and  they 
are  lost  on  the  way,  it  is  the  buyer's  loss,  because  the  goods  were 
his  by  the  sale,  which  was  completed  when  the  offer  was  accepted. 
But  if  the  owner  accepts  the  offer  with  any  material  modifica- 
tion of  its  terms,  and  then  sends  the  goods  and  they  are  lost, 
it  is  his  loss  now,  because  the  contract  of  sale  was  not  com- 
pleted.2 

Nor  will  a  voluntary  compliance  with  the  conditions  and  terms 
of  a  proposed  contract  make  it  a  contract  obligatory  on  the  other 
party,  unless  there  have  been  an  accession  to,  or  an  acceptance  of, 
the  proposition  itself.^  But  there  may  be  cases  in  which  an  offer 
may  come,  from  a  distance,  and  be  such  in  its  purpose  and  terms, 

1  See  Hutchinson  v.  Bowker,  5  M.  &  W.  535,  cited  a7ite,  p.  14;  Slaymaker  v.  Irwin, 
4  Whart.  369.  See  also  Siiydam  v.  Clark,  2  Sandf.  133,  where,  on  a  sale  of  one  thou- 
sand barrels  of  flour,  the  broker  stated  in  the  bought  note  that  seven  hundred  and  fifty 
barrels  were  to  be  delivered  when  it  arrived,  not  later  than  three  days  ;  and  in  the  sold 
note,  that  the  whole  was  to  be  delivered.  Held,  that  this  was  a  material  variance  in  the 
notes  of  sale,  and  that  no  contract  was  effected.  See  also  Peltier  v.  Collins,  3  Wend. 
459  ;■  Sivewright  v.  Archibald,  6  E.  L.  &  E.  286  ;  Jordan?;.  Norton, 4  M.  &  W.  155. 

2  See  Bruce  v.  Pearson,  3  Johns.  534,  cited  ante,  p.  14,  and  other  cases  there  cited. 

3  In  Johnston  v.  Fessler,  7  Watts,  48,  the  defendant  offered  to  pay  the  debts  of  third 
persons,  if  the  plaintiffs  would  forbear  to  sue  them,  either  by  giving  the  plaintiffs  iron 
immediately,  or  money  in  the  following  spring,  to  which  the  plaintiff's  did  not  assent, 
but  afterwards  complied  with  the  terms  proposed;  and  it  was  held  that  this  did  not  ren- 
der the  defendant  liable.  And  see  Beckwith  v.  Cheever,  1  Fost.  41.  So,  where  a 
guaranty  is  offered,  it  will  be  seen  in  our  chapter  on  Guaranty,  that  the  general  rule 
requires  that  the  party  receiving  it  shall  expressly  accept  it  before  he  acts  on  the  faith 
of  it.  See  Mclver  v.  Richardson,  1  M.  &  S.  557  ;  Mozlcy  v.  Tinker,  1  Cr.  M.  & 
K. 692. 


\ 


18  ELEMENTS    OP   MERCANTILE   LAW.  [CH.   II. 

that  an  immediate  compliance  with  it  may  be  the  only  or  at 
least  the  ready  and  proper  way  of  signifying  acceptance  and 
assent.! 


SECTION  ni. 

OF    OFFERS   GIVING   TIME. 

It  sometimes  happens  that  one  party  makes  another  a  certain 
offer  and  gives  him  a  certain  time  in  which  he  may  accept  it. 
The  law  on  this  subject  was  once  somewhat  uncertain,  but  may 
now  be  considered  as  settled.  It  is  this.  If  A  makes  an  offer  to 
B,  which  B  at  once  accepts,  there  is  a  bargain.  If  B  declines  or 
neglects  to  accept  it  at  once,  but  takes  time  to  consider,  and  then 
accepts,  A  may  say  he  has  changed  his  mind  and  does  not  make 
that  offer.  If  A  when  he  makes  the  offer,  says  to  B  that  he  may 
have  any  certain  time  wherein  to  accept  it,  and  is  paid  by  B  for 
thus  giving  him  time,  he  cannot  withdraw  the  offer,  or  rather,  if 
he  withdraws  it,  for  this  breach  of  his  contract,  the  other  party, 
B,  may  have  his  action  for  damages;  and  an  acceptance  by  B 
within  the  time  is  obligatory  upon  A.  If  A  is  not  paid  for  giv- 
ing the  time,  A  may  then  withdraw  the  offer  at  once  or  when- 
ever he  pleases,  provided  B  has  not  previously  accepted  it.  But 
if  B  has  accepted  the  offer  before  the  time  expired,  and  before  the 
offer  was  withdrawn,  then  A  is  bound  although  he  gave  the  time 
voluntarily  and  without  consideration.  For  his  offer  is  to  be 
regarded  as  a  continuing  offer  during  all  the  time  given,  unless  it 
be  withdrawn.^ 


1  See  Train  v.  Gould,  5  Pick.  380. 

*  In  Boston  &  Maine  Railroad  v.  Bartlett,  3  Cash.  224,  it  was  held  that  a  proposition 
in  writing  to  sell  land,  at  a  certain  price,  if  taken  within  thirty  days,  is  a  continuing 
otfer,  which  may  be  retracted  at  any  time;  but  if,  not  being  retracted,  it  is  accepted 
within  the  tin;)e,  such  offer  and  acceptance  constitute  a  valid  contract,  the  specific  per- 
formance of  which  may  be  enforced  in  equity.  Fletcher,  J.,  said  :  "  In  the  present  case, 
though  the  writing  signed  by  the  defendants  was  but  an  offer,  and  an  offer  which  might 
be  revoked,  yet  while  it  remained  in  force,  and  unrevoked,  it  was  a  continuing  offer, 
during  the  time  limited  for  acceptance;  and  during  the  whole  of  that  time  it  was  an 
offer  every  instant,  but  as  soon  as  it  was  accepted  it  ceased  to  be  an  offer  merely,  'ind 
then  ripened  into  a  contract.  The  counsel  for  the  defendants  is  most  surely  in  the 
right  in  saying  that  the  writing  when  made  was  without  consideration,  and  did  not 
therefore  form  a  contract.  It  was  then  but  an  offer  to  contract,  and  the  parties  making 
the  offer  most  undoubtedly  might  have  withdrawn  it  at  any  time  before  acceptance. 
But  wlion  the  offer  was  accepted,  the  minds  of  the  parties  met,  and  the  contract  was 
complete.     There  was  then  the  meeting  of  the  minds  of  the  parties,  which  constitutes 


CII.   II.]  OF  AGREEMENT   AND   ASSENT.  19 


SECTION  IV. 


OF   A    BARGAIN    BY   CORRESPONDENCE. 


When  a  contract  is  made  by  correspondence  the  question 
occurs,  at  what  time,  or  by  what  act  is  the  contract  completed. 
The  cases  on  this  subject  have  fluctuated  very  much  ;  but  the 
Jaw  may  now  be  considered  as  conclusively  settled  both  in  Eng- 
land and  in  this  country.  If  A  writes  to  B  proposing  to  him  a 
contract,  this  is  a  continued  proposition  or  offer  of  A  until  it 
reaches  B,  and  for  such  time  afterwards  as  would  give  him  a 
reasonable  opportunity  of  accepting  it.'  But  it  may  be  with- 
drawn by  A  at  any  time  before  acceptance.  It  is  not  however 
withdrawn,  in   law,  until   a  notice  of  withdrawal   reaches  B.^ 

and  is  the  definition  of  a  contract.  The  acceptance  by  the  plaintiffs  constituted  a  suffi- 
cient legal  consideration  for  the  engagement  on  the  part  ef  the  defendants.  There  was 
then  nothing  wanting,  in  order  to  perfect  a  valid  contract  on  the  part  of  the  defend- 
ants. It  was  precisely  as  if  the  parties  had  met  at  the  time  of  the  acceptance,  and  the 
offer  had  then  been  made  and  accepted  and  the  bargain  completed  at  once."  In 
Wright  V.  Brigg,  21  Eng.  L.  &  Eq.  591,  an  agent  was  authorized  by  the  defendant  to 
make  a  proposal  of  sale  of  some  land  to  the  phiintitf,  to  be  accepted  within  a  week. 
The  phiiutiif  wrote  to  the  agent  within  that  time,  accepting  the  offer,  but  the  agent  did 
not  communicate  the  acceptance  to  the  defendant  until  long  after.  Held,  that  there  was 
a  valid  contract,  which  was  not  destroyed  by  the  neglect  of  the  agent  to  communicate 
the  acceptance  to  the  defendant.  In  Payne  v.  Cave,  3  T.  li.  148,  it  was  held  that  at 
a  sale  by  auction,  every  bid  is  an  offer  which  may  be  withdrawn  at  any  time  before  it 
is  accepted  by  tiie  fall  of  the  hammer  or  otherwise. 

1  This  doctrine  was  first  laid  down  in  England  in  Adams  v.  Lindsell,  1  B.  &  Aid.  681. 
In  that  case  the  defendants  by  letter  offered  to  sell  to  the  plaintiffs  a  certain  quantity  of 
wool,  on  certain  specified  terms.  This  letter  reached  the  plaintiffs  on  the  5th  of  Sep- 
tember at  7  P.  M.  On  that  evening  the  plaintiffs  wrote  an  answer,  agreeing  to  accept 
the  wool  on  the  terms  proposed.  This  letter  reached  the  defendants  in  due  course  of 
mail,  on  the  9th  of  September;  but  they  had  sold  the  wool  in  question  on  the  day  preceding 
to  another  person.  The  action  was  brought  to  recover  damages  of  the  defendants  for 
not  delivering  the  wool  to  the  plaintiffs.  The  court  held  that  the  contract  was  complete 
from  the  moment  the  offer  was  accepted,  and  therefore  the  plaintiffs  were  entitled  to 
recover.  It  was  contended  for  the  defendants,  that  there  could  be  no  binding  contract 
betwTcen  the  parties,  until  the>  plaintiffs'  answer  was  actually  received.  But  the  court 
said,  "If  that  were  so,  no  contract  could  ever  be  completed  by  the  post.  For  if  the 
defendants  were  not  bound  by  their  offer  when  accepted  by  the  plaintiffs  till  tlie  answer 
was  received,  then  the  plaintiffs  ought  not  to  be  bound  till  after  they  had  received  the 
notification  that  the  defendants  had  received  their  answer  and  assented  to  it.  And  so 
it  might  go  on  ad  infi.idtuin.  The  defendants  must  be  considered  in  law  as  making, 
during  every  instant  of  the  time  their  letter  was  travelling,  the  same  identical  offer  to 
the  plaintiffs,  and  then  the  contract  is  completed  by  the  acceptance  of  it  by  the  latter." 
And  see  Averiil  v.  Hed<ie,  12  Conn.  436;  Moctier  v.  Frith,  6  Wend.  103;  Brisban  v. 
Boyd,  4  Paige,  17  ;  Stocken  v.  Collen,  7  M.  «&  W.  515  ;  Dunlop  v.  Higgins,  1  House  of 
Lords  Cases,  381. 

2  Routledge  v.  Grant,  4  Bing.  653.  In  the  case  of  The  Palo  Alto ;  Daveis,  R. 
344,  Ware,  J.,  says,  "In  all  engagements  in'er  alu-entes,  when  the  negotiations  are 
carried   on   by   letters    or    messengers,   an   offer  by    one    party,  until    it    is    made 


20  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  II. 

This  is  the  important  point.  Thus  if  A,  in  Boston,  writes  to 
B,  in  New  Orleans,  ofTering  him  a  certain  price  for  one  hundred 
bales  of  cotton  ;  and  the  next  day  alters  his  mind  and  writes  to 
B,  withdrawing  liis  offer ;  if  the  first  letter  reaches  B  after  the 
second  is  written,  but  before  the  second  reaches  him,  B  has  a 
right  to  accept  the  offer,  and  by  his  acceptance  bind  A.  But  if 
B  delays  his  acceptance  until  the  second  letter  reaches  him,  the 
offer  is  then  effectually  withdrawn.  It  is  a  sufficient  acceptance 
if  B  writes  to  A  declaring  his  acceptance,  and  puts  his  letter 
into  the  post-office.  It  seems  now  quite  clear  that  as  soon  as  the 
letter  leaves  the  post-office,  or  is  beyond  the  reach  of  the  writer, 
the  acceptance  is  complete.^ 

The  cases  above  cited  would  indicate,  that  if  the  letter  of 
withdrawal  reaches  B  after  he  has  put  his  letter  of  acceptance 
into  the  post-office,  but  before  it  has  gone,  and  while  he  could 
still  take  it  back  if  he  chose,  he  may  disregard  the  withdrawal  of 
the  offer,  and  let  his  letter  go  on  its  way.     This  certainly  is  not 


known  to  the  other,  is  but  an  intention  not  expressed,  propositum  in  mente  retentum. 
If  the  messenger  or  letter  can  be  overtaken  before  it  arrives  at  its  destination,  it  may  be 
revoked ;  but  if  tlie  revocation  docs  not  arrive  until  after  the  offer  is  received  and 
accepted,  and  especially  not  until  it  has  been  acted  upon,  then  it  is  too  late.  For  the 
revocation  is  but  a  simple  act  of  the  will,  a  propositum,  not  res  gesta,  an  act  done,  until 
after  it  is  known,  and  of  course  can  have  no  more  effect  than  an  intention  not 
expressed,  but  confined  within  the  breast  of  the  party.  It  is  a  remark  of  one  of  the  most 
profound  jurists  of  the  last  age  that  an  act  of  the  will  not  known  is,  in  jurisprudence, 
as  if  it  did  not  exist.  Une  volont(5  qui  n'est  pas  comme  est  en  jurisprudence  comme  ei 
elle  n'existit  pas.  C.  Toul.  Droit  Civil,  No.  29."  So  also,  in  Tayloe  v.  Merchants' 
Fire  Ins.  Co.  9  How.  390,  400,  where  the  question  arose  upon  a  letter  from  the  defend- 
ants to  the  plaintiffs,  stating  the  terms  upon  which  they  would  insure  his  property, 
Nelson,  J.,  said:  "We  are  of  opinion  that  an  offer  under  the  circumstances  stated, 
prescribing  the  terms  of  insurance,  is  intended,  and  is  to  be  deemed,  a  valid  undertaking 
on  the  part  of  the  company,  that  they  will  be  bound,  according  to  the  terms  tendered, 
if  an  answer  is  transmitted  in  due  course  of  mail,  accepting  them.  And  that  it  cannot 
be  withdrawn,  unless  the  withdrawal  reaches  the  party  to  v/hom  it  is  addressed  before 
his  letter  of  reply,  announcing  the  acceptance,  has  been  transmitted.  But  in  Falls  v. 
Gaither,  9  Porter,  605,  614,  a  different  opinion  is  declared.  Collier,  C.  J.,  there  says  : 
"  Since  a  proposition  to  sell  imposes  no  obligation  till  accepted,  it  is.  in  general,  com- 
petent for  the  party  offering  to  withdraw  if,  any  time  previous  to  acceptance ;  and  if  he 
does  so,  a  subsequent  acceptance  will  not  bind  him,  though  made  before  the  accepting 
party  had  notice  of  the  withdrawal.  To  exemplify:  suppose  A  has  offered  by  letter  to 
sell  B  a  slave  —  B  accepts  the  offer  by  addressing  a  letter  to  A,  assenting  to  his 
terms ;  if  the  latter  did  not,  previous  to  the  date  of  B's  letter,  recall  the  offer,  he  is 
bound  by  the  contract;  but  if  he  withdrew  it  by  a  letter  sent  to  B,  before  B's  letter  was 
written,  the  acceptance  of  the  latter  would  be  unavailing  for  any  legal  purpose ;  and 
this  too,  though  the  letter  of  withdrawal  was  not  received.  This  example  rests  upon 
the  well  settled  rule,  that  the  concurrence  of  both  parties  is  essential  to  a  contract  of 
sale,  though  given  at  different  times." 

1  See  Potter  v.  Sanders,  6  Hare,  1  ;  Dunlop  v.  Higgins,  1  House  of  Lords  Cases,  381 ; 
Tayloe  v.  Merchants'  Fire  Ins.  Co.  9  How.  390;  Duncan  v.  Topham,  8  C.  B.  225 ; 
Vassar  v.  Camp,  14  Barb.  341  ;  Levy  v.  Cohen,  4  Geo.  1  ;  Chiles  v.  Nelson,  7  Dana, 
281  ;  Hamilton  v.  Lycoming  Mutual  Ins.  Co.  5  Barr.  339. 


en.  II.]  OF  AGREEMENT  AND  ASSENT.  21 

settled;  but  the  dicta  of  judges,  and  the  principles  on  which  the 
later  decisions  rest,  would  seetn  to  lead  to  the  conclusion  that  the 
contract  is  entirely  complete  as  soon  as  the  letter  is  in  the  post- 
office. 

The  party  making  the  offer  by  letter  is  not  bound  to  use 
the  same  means  for  withdrawing  it,  which  he  uses  for  making  it. 
Thus,  if  A  in  the  case  just  supposed,  a  week  after  he  has  sent 
his  ofl'er  by  letter,  telegraphs  a  withdrawal  to  B,  and  this  with- 
drawal reaches  him  before  he  accepts  the  offer,  this  withdrawal  is 
effectual.' 


SECTION  V. 

WHAT   EVIDENCE   MAY  BE   RECEIVED   IX   REFERENCE    TO   A   WRITTEN 

CONTRACT. 

If  an  agreement  upon  which  a  party  relies  be  oral  only,  it 
must  be  proved  by  evidence,  and  any  evidence  tending  to  show 
what  the  contract  was  is  admissible.  But  if  the  contract  be 
reduced  to  writing,  it  proves  itself;  and  now,  no  evidence  what- 
ever is  receivable  for  the  purpose  of  varying  the  contract  or 
affecting  its  obligations.  The  reasons  are  obvious.  The  law 
prefers  written  to  oral  evidence,  from  its  greater  precision  and 
certainty,  and  because  it  is  less  open  to  fraud.  And  where  parties 
have  closed  a  negotiation  and  reduced  the  result  to  writing,  it  is 
to  be  presumed  that  they  have  written  all  they  intended  to  agree 
to,  and  therefore,  that  what  is  omitted  was  finally  rejected  by 
them.2 

1  In  Sheffield  Canal  Co.  v.  Sheffield  &  Rotherham  Rail.  Co.  3  Rail.  Cas.  121,  where  a 
treaty  was  commenced  by  letter,  and  in  the  course  of  the  treaty  an  offer,  made  by  letter, 
was  verbally  rejected  ;  held^  that  the  party  who  made  the  offer  was  relieved  from  his 
liability,  notwitlistanding  a  subsequent  acceptance  in  writing. 

-  In' Kane  v.  Old,  2  B.  &  C.  634,  Ahbott,  C.  J.,  said  :  "  Where  the  whole  matter  passes 
in  parol,  all  that  passes  may  sometimes  be  taken  together  as  forming  parcel  of  the 
contract,  though  not  always,  because  matter  talked  of  at  the  commencement  of  a  bar- 
gain may  be  excluded  by  the  language  used  at  its  termination.  But  if  the  contract  be 
in  the  end  reduced  into  writing,  nothing  which  is  not  found  in  the  writing  can  be  con- 
sidered as  a  part  of  the  contract.  A  matter  antecedent  to  and  dehors  the  writing  may 
in  some  cases  be  received  in  evidence,  as  showing  the  inducement  to  the  contract,  such 
as  a  representation  of  some  particular  quality  or  incident  to  the  thing  sold.  But  the 
buyer  is  not  at  liberty  to  show  such  a  representation,  unless  he  can  also  show  that  the 
seller  by  some  fraud  prevented  him  from  discovering  a  fault  which  he,  the  seller,  knew 
to  exist."  See  also  Pickering  v.  Dowson,  4  Taunt.  786  ;  Preston  v.  Mercean,  2  Wm. 
Bl.  1249;  Carter  v.  Hamilton,  11  Barb.  147;  The  Troy  Iron  and  Nail  Factory  v. 
Corning,  1  Blatch.  C.  C.  467  ;  Meres  v.  Ansell,  3  Wils.  275 ;  Hakes  v.  Hotchkiss,  23 
Vt.  231 ;  Vt.  Central  R.  R.  Co.  v.  Estate  of  Hills,  id.  681. 


22  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  II. 

But  some  evidence  may  always  be  necessary,  and  therefore 
admissible;  as  evidence  of  the  identity  of  the  parties  to  the 
contract  or  of  the  things  which  form  its  subject-matter.  And 
upon  the  yv'hole,  we  cannot  state  the  rule  on  this  subject  better 
than  that,  while  no  evidence  is  receivable  to  contradict  or  vary  a 
written  contract,  all  evidence — not  otherwise  inadjnissible  — 
may  be  received  to  explain  its  meaning  and  show  what  the  con- 
tract is  in  fact.i 

There  are  some  obvious  limitations  to  this  rule.  The  first  is, 
that  as  evidence  is  admissible  only  to  explain  the  contract,  if 
the  contract  needs  no  explanation,  that  is,  if  it  be  by  itself 
perfectly  explicit  and  unambiguous,  evidence  is  inadmissible, 
because  it  is  wholly  unnecessary  excepting  to  vary  the  meaning 
and  force  of  the  contract,  and  that  is  not  permitted.^  Another, 
following  from  this,  is,  that  if  the  evidence  purports,  under  the 
name  of  explanation,  to  give  to  the  contract  a  meaning  which  its 
words  do  not  fairly  bear,  this  is  not  permitted,  because  such 
evidence  would  in  fact  make  a  new  contract.^ 

A  frequent  use  of  oral  evidence  is  to  explain,  by  means  of 
persons  experienced  in  the  subject-matter  of  the  contract,  the 
meaning  of  technical  or  peculiar  words  and  phrases;  and  such 
witnesses  are  called  experts,  and  are  very  freely  admitted.* 


1  'I  "When  there  is  a  devise  of  the  estate  purchased  of  A,  or  of  the  farm  in  the  occu- 
pation of  B,  nobody  can  tell  what  is  given  till  it  is  shown  by  extrinsic  evidence  what 
estate  it  was  that  was  purchased  of  A,  or  what  farm  was  in  the  occupation  of  B." 
Per  Sir  William  Grant,  in  Sanford  v.  Raikes,  1  Mer.  653.  Again,  in  Clayton  v.  Lord 
Nugent,  1.3  M.  &  W.  201,Rolfe,  B.,  says:  "Speaking  philosophically,  you  must  always 
look  beyond  the  instrument  itself  to  some  extent,  in  order  to  ascertain  who  is  meant; 
for  instance,  you  must  iook  to  names  and  places.  There  may  indeed  be  no  difficulty 
in  ascertaining  who  is  meant,  when  a  person  who  has  five  or  six  names,  and  some  of 
them  unusual  ones,  is  described  in  full ;  while  on  the  other  hand,  a  devise  simply  to 
John  Smith  would  necessarily  create  some  uncertainty."  See  also  Owen  v.  Thomas,  3 
Mylne  &  K.  3.53. 

-  In  Pierson  v.  Hooker,  3  Johns.  68,  one  of  several  partners  executed  a  deed  of  release 
in  due  form  in  the  name  of  the  partnership,  whereby  he  released  the  defendant  from  all 
debts  and  demands  of  every  nature  and  kind  whatsoever  ;  held,  that  parol  evidence  was 
inadmissible  to  show  that  a  particular  debt  was  not  intended  to  be  released. 

^  In  Doe  V.  Oxendcn,  3  Taunt.  147,  a  testator  made  a  devise,  using  these  words  —  "my 
estate  of  Ashton.''  He  had  a  maternal  estate  comprehending  several  distinct  estates  in 
Ashton  parish,  and  some  others  in  adjacent  parishes,  some  ten  or  fifteen  miles  distant ; 
held,  that  evidence  was  not  admissible  to  show  that  he  was  accustomed  to  call  all  his 
maternal  estate  his  Ashton  estate  ;  and  intended  to  devise  the  same  by  that  name. 
And  see  Doe  v.  Greening,  3  M.  &  S.  171  ;  Doe  v.  Lyford,  4  M.  &  S.  550;  Miller  v. 
Travers,  8  Bing.  244 ;  Hunt  v.  Adams,  7  Mass.  518. 

*  In  Coblet  v.  Bachcy,  3  Sim.  24,  a  statuary  bequeathed  articles  used  in  his  business 
by  their  technical  names,  some  of  which  were  very  obscurely  written  ;  and  persons  who 
were  skilled  in  writing  and  acquainted  with  articles  used  by  statuaries,  were  called  to 
explain  the  meaning  of  the  will.     If  a  contract  contains  words  used  in  a  technical 


en.  II.]  OF   AGREEMENT   AND    ASSENT.  23 

It  may  be  remarked  too,  that  a  written  receipt  for  money  is  not 
within  the  general  rule  as  to  written  contracts,  being  always 
open,  not  only  to  explanation,  but  even  to  contradiction  by 
extrinsic  evidence.  But  this  is  true  only  of  a  simple  receipt.  If 
a  written  instrument  not  only  recites  or  acknowledges  the 
receiving  of  money  or  goods,  but  contains  also  a  contract  or 
grant,  such  instrument  as  to  the  contract  or  grant,  is  no  more  to 
be  affected'by  extrinsic  evidence  than  if  it  contained  no  receipt; 
but  as  to  the  receipt  itself,  it  may  be  varied  or  contradicted  in  the 
same  manner  as  if  it  contained  nothing  else.' 

A  certain  legal  inference  from  a  written  promise,  can  no  more 
be  rebutted  by  evidence,  than  if  it  were  written.  Thus,  it  is  not 
only  true  that  if  A,  by  his  note,  promises  to  pay  B  a  sum  of  money 
in  sixty  days,  he  cannot  when  called  upon  resist  the  claim  by 
proving  that  B,  when  the  note  was  made,  agreed  to  wait  ninety 
days;  but  if  A  promise  to  pay  money  and  no  time  is  set,  this  is 
by  force  of  law  a  promise  to  pay  on  demand,  and  evidence  is  not 
receivable  to  show  that  a  distant  period  was  agreed  upon.^ 
Still,  where  a  contract  is  entire^  and  a  part  only  is  reduced  to 
waiting,  and  the  law  does  not  supply  the  residue,  evidence  may 
be  received  to  prove  that  residue;  but  not  if  it  materially  changes 
or  contradicts  what  is  written.^ 


sense;  Shore  v.  Wilson,  9  CI.  &  Fin.  511,  568;  Smith  v.  Wiison,  3  B.  &  Ad.  728;  or 
words  of  a  foreign  hinguage  ;  Cabarga  v.  Seeger,  1 7  Penn.  St.  514  ;  Sheldon  v.  Beiiham, 
4  Hill,  129  ;  or  characters  which  are  difficult  to  be  deciphered;  Norman  v.  Morrell,  4 
Ves.  769  ;  Masters  v.  Masters,  1  P.  Wms.  425  ;  an  expert  may  be  admitted  to  explaia 
them. 

1  Bell  V.  Bell,  12  Penn.  St.  235;  Button  v.  Tilden,  13  id.  46;  Kirkpatrick  v.  Smith, 
10  Humph.  188;  Cole  v.  Taylor,  2  N.  Jer.  59;  Fuller  u.  Crittenden,  9  Conn.  401 ; 
Straton  v.  Rostall,  2  T.  R.  366.  Thus,  a  bill  of  lading,  in  the  usual  form,  is  a  receipt 
for  the  quantity  of  goods  shipped,  and  also  a  promise  to  transport  and  deliver  the 
same;  and  so  far  as  such  a  bill  of  lading  is  a  recei])t  it  may  be  controlled  by  parol 
proof.  Therefore,  in  a  suit  by  the  shipper  upon  such  a  bill  for  the  non-delivery  of  goods 
sliipi)ed,  it  is  competent  for  the  defendant  to  prove  that  the  quantity  of  goods  received 
was  less  than  that  acknowledged  in  the  bill.  O'Brien  v.  Gilchrist,  34  Maine,  554.  In 
Tisloe  V.  Gracter,  1  Blackf.  353,  where  in  a  receipt  money  was  acknowledged  to  have 
been  received  ''for  safe  keeping,"  it  was  held  that  evidence  was  not  admissible  to  show 
that  the  money  was  not  deposited  for  safe  keeping,  but  was  in  discharge  of  a  debt. 
See  also  Egleston  v.  Knickerbacker,  6  Barb.  458;  Smith  v.  Brown,  3  Hawks,  580;  May 
V.  Babcock,  4  Ohio,  346;  Stone  v.  Vance,  6  Ham.  (Ohio,)  246;  Wood  v.  Perry, 
Wright,  (Ohio,)  240;  Graves  v.  Harwood,  9  Barb.  477;  Wayland  v.  Mosely,  5  Ala. 
430. 

^  Thomp=;on  v.  Ketchum,  8  Johns.  189;  Warren  v.  Wheeler,  8  Mete.  97  ;  Atwood  v. 
Cobb,  16  Pick.  227;  Ryan  v.  Hall,  13  Mete.  520 ;  Barringer  u.  Sneed,3  Stew.  201; 
Simpson  v.  Hendeison,  M.  &  Malk.  300. 

^  In  Jeffrey  v.  Walton,  1  Stark.  267,  in  an  action  for  not  taking  proper  care  of  a 
horse  hired  by  the  defendant  of  the  plaintiff,  the  following  memorandum,  made  at  the 
time  of  hiring,  was  offered  in  evidence :  '•  Six  weeks  at  two  guineas,  Wm.  Walton, 


24  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  II. 

The  construction  or  interpretation  of  a  written  contract  may 
sometimes  be  very  material  to  the  interests  or  rights  of  third 
parties,  who  had  nothing  to  do  with  writing  it,  and  were  in  no 
way  privy  to  it.  In  such  case,  these  parties  may  show  by  evi- 
dence what  the  contract  which  purports  to  have  been  written, 
really  was  as  between  the  parties  to  it.^ 

Generally  speaking,  all  written  instruments  are  construed  and 
interpreted  by  the  law  according  to  the  simple,  customary,  and 
natural  meaning  of  the  words  used. 

It  should  be  added  that  when  a  contract  is  so  obscure  or 
uncertain,  that  it  must  be  set  wholly  aside,  as  no  contract  what- 
ever, it  can  have  no  force  or  effect  upon  the  rights  or  relations  of 
the  parties,  but  they  are  remitted  to  their  original  rights  and 
obligations. 

.  Jr."  Lord  EUcnhoroiigh  regarded  the  memorandum  as  incomplete,  but  conclusive  as  far 
as  it  went.  "  The  written  agreement,"  said  he,  "  merely  regulates  the  time  of  hiring 
and  the  rate  of  payment,  and  I  shall  not  allow  any  evidence  to  be  given  by  the  plaintiff 
in  contradiction  of  tliese  terms  ;  but  I  am  of  opinion  that  it  is  competent  to  the  plaintiff 
to  "■ive  in  evidence  suppletory  matter  as  a  part  of  the  agreement."  See  Edwards  v. 
Gotdsmith,  16  Penn.  St.  43;  Knapp  v.  Harden,  6  C.  &  P.  745;  Deshon  v.  Merchants' 
Ins.  Co.  11  Mete.  199. 

1  Parol  evidence  may  be  introduced  to  contradict  a  written  instrument  when  both  or 
only  one  of  the  parties  to  the  suit  are  strangers  to  the  instrument.  Reynolds  v. 
Magness,  2  Ircd.  26  ;  Krider  v.  Laffcrty,  1  Whart.  303  ;  Strader  v.  Lambeth,  7  B.  Mon. 
589  ;  Venable  v.  Thompson,  11  Ala.  147  ;  Taylor  v.  Baldwin,  10  Barb.  582 ;  The  King 
V.  Laindon,  8  T.  R.  379. 


CH.  III.]  OF   CONSIDERATION.  25 


•   CHAPTER   III. 
OF  CONSIDERATION. 

SECTION  I. 

OF    THK   NEED    OF   A   CONSIDERATION. 

It  is  an  ancient  and  well-established  rule  of  the  common  law 
of  England  and  of  this  country,  that  no  promise  can  be  enforced 
at  law,  unless  it  rests  upon  a  consideration.  If  it  do  not,  it  is 
called  a  nudum  pactum ;  and  the  promisor,  even  if  he  admits  his 
promise,  is  under  no  legal  obligation  to  perform  it.^ 

There  are  two  exceptions  to  this  rule.  One  is  when  the 
promise  is  made  by  a  sealed  instrument,  or  deed ;  for  every  writ- 
ten instrument  which  is  sealed  is  a  deed.  Here  the  law  is  said 
to  imply  a  consideration;  the  meaning  of  which  is  that  it  does 
not  require  that  any  consideration  should  be  proved.  The  seal 
itself  is  said  to  be  a  consideration,  or  to  import  a  consideration.^ 

1  Bro.  Abr.  action  stir  le  case,  40  ;  3  Hen.  6,  36,  pi.  33  ;  17  Ed.  4,  pi.  4  ;  2  Bl.  Comm- 
445  ;  Eastwood  v.  Kenyon,  11  Ad.  &  E.  438  ;  Cook  v.  Bradley,  7  Conn.  57  ;  Dodge 
V.  Burdell,  13  Conn.  170 ;  Bean  v.  Burbank,  16  Maine,  458  ;  Burnet  i'.  Bisco,  4  Johns. 
235;  People  y.  Shall,  9  Cow.  778.  And  see  Araericar  Law  Eegister,  vol.  2,  (1854,) 
pp.  257,  385,  449.  This  rule  is  said  to  have  been  borrowed  from  the  civil  law,  in 
which  the  maxim,  "  Ex  nudo  pacta  non  oritur  actio,"  was  applied  to  all  contracts.  2 
Bl.  Comm.  445.  But  the  nudum  pactum  of  the  civil  law  was  not  the  same  as  that 
now  recognized  by  our  common  law.  The  civilians  only  applied  the  term  to  those 
contracts  which  had  not  been  entered  into  with  the  requisite  formalities,  without  refer- 
ence to  the  duties  imposed  upon  one  party,  which  were  to  be  performed  without  recom- 
pense by  the  other.  Vin.  Comm.  de  Inst.  lib.  3,  tit.  14,  p.  659. 

2  See  Irons  v.  Smallpiece,  2  B.  &  Aid.  551.  In  Sharington  v.  Strotton,  PI.  Com.  308, 
Ploirden,  arguendo,  says :  —  "  Words  pass  from  men  lightly  and  inconsiderately,  but 
where  the  agreement  is  by  deed,  there  is  more  time  for  deliberation.  For  when  a 
man  passes  a  thing  by  deed,  first  there  is  the  determination  of  the  mind  to  do  it,  and 
upon  that  he  causes  it  to  be  written,  which  is  one  part  of  deliberation,  and  afterwards 
he  puts  his  seal  to  it,  which  is  another  part  of  deliberation,  and  lastly  he  delivers  the 
writing  as  his  deed,  which  is  the  consummation  of  his  resolution  ;  and  by  the  delivery 
of  the  deed  from  him  that  makes  it  to  him  to  whom  it  is  made,  he  gives  his  assent  to 
part  with  the  thing  contain^  in  the  deed  to  him  to  wlaom  he  delivers  the  deed,  and 
this  delivery  is  a  ceremony  in  law,  signifying  fully  his  good  will  that  the  thing  in 
the  deed  should  pass  from  him  to  the  other.  So  that  there  is  great  deliberation  used 
in  the  making  of  deeds,  for  which  reason  they  are  received  as  a  lien  final  to  the  party, 
and  are  adjudged  to  bind  the  party,  without  examining  upon  what  cause  or  consider- 

3 


26  ELEMENTS   OF  MERCANTILE  LAW.  [CH.   III. 

The  second  exception  relates  to  negotiable  paper ;  and  is  an 
instance  in  which  the  law  merchant  has  materially  qualified  the 
common  law.  We  shall  speak  more  fully  of  this  exception 
when  we  treat  of  negotiable  paper. 

The  word  "  consideration,"  as  it  is  used  in  this  rule,  has  a 
peculiar  and  technical  meaning.  It  denotes  some  substantial 
cause  for  the  promise.  This  cause  must  be  one  of  two  -things  ; 
either  a  benefit  to  the  promisor,  or  else  an  injury  or  loss  to  the 
promisee,  sustained  by  him  at  the  instance  and  request  of  the 
promisor.  Thus,  if  A  promises  B  to  pay  him  a  thousand  dollars 
in  three  months,  and  even  promises  this  in  writing,  the  promise 
is  worthless  in  law,  if  A  makes  it  as  a  merely  voluntary  prom- 
ise, without  consideration.  But  if  B,  or  anybody  else,  gives  to 
A  to-day  a  thousand  dollars  in  goods  or  money,  and  this  was 
the  ground  and  cause  of  the  promise,  then  it  is  enforceable. 
And  if  A  got  nothing  for  his  promise,  but  B,  at  the  request  of 
A,  gave  the  same  goods  or  money  to  C,  this  would  be  an  equally 
good  consideration,  and  the  promise  would  be  equally  valid  in 
law.^ 

This  rule  sometimes  operates  harshly  and  unjustly,  and  per- 
mits promisors  to  break  their  word  under  Qircumstances  calling 
strongly  for  its  fulfilment.  Courts  have  been  led,  perhaps,  by  this 
to  moderate  the  rule,  by  saying  that  the  consideration  is  suffi- 
cient if  it  be  a  substantial  one,  although  it  be  not  an  adequate 
one.     This  is  the  unquestionable  rule  now.^ 

ation  they  were  made."  See  also  Shubrick  v.  Salmond,  3  Burr.  1639;  Fallowes  v. 
Taylor,  7  T.  R.  477  ;  Morley  v.  Boothby,  3  Bing.  Ill ;  Sumner  v.  Williams,  8  Mass. 
200 ;  Page  v.  Trufant,  2  Mass.  159  ;  Green  v.  Thomas,  2  Fairf.  318;  Belden  v.  Davies, 
2  Hall,  433  ;  Dale  v.  Roosevelt,  9  Cow.  307.  In  some  of  the  United  States,  however, 
cither  by  usage  or  statute,  a  want  or  failure  of  consideration  is  a  good  defence  to  an 
action  upon  a  sealed  agreement.  See  Walker  v.  Walker,  13  Ire.  335  ;  Peebles  v.  Ste- 
phens, 1  Bibb,  500  ;  Coyle  v.  Fowler,  3  J.  J.  Marsh.  473 ;  Case  v.  Boughton,  1 1 
Wend.  106  ;  Leonard  v.  Bates,  1  Blackf.  173  ;  Swift  v.  Hawkins,  1  Dallas,  17  ;  Gray  v. 
Handkinson,  1  Bay,  278  ;  State  v.  Gaillard,  2  Bay,  11  ;  Solomon  v.  Kimmel,  5  Binn. 
232.  And  an  exception  to  the  general  rule  also  exists  in  the  case  of  contracts  in  re- 
straint of  trade,  which,  although  under  seal,  require  a  consideration.  See  Homer  v. 
Ashford,  3  Bing.  322  ;  Mitchel  v.  Reynolds,  1  P.  Wms.  181. 

1  Either  of  these  causes  constitutes  a  suiBcient  consideration  to  uphold  a  contract. 
Com.  Dig.,  Action  upon  the  case  upon  assumpsit,  (B.  1) ;  Pillans  v.  Van  Mierop,  3 
Burr.  1673  ;  Nerot  v.  Wallace,  3  T.  R.  24  ;  Bunn  v.  Guy,  4  East,  194 ;  Willatts  v.  Ken- 
nedy, 8  Bing.  5;  Miller  v.  Drake,  1  Cains,  45;  Powell  v.  Brown,  1  Johns.  100;  Le- 
master  v.  Buckhart,  2  Bibb,  30 ;  Chick  v.  Trevett,  20  Maine,  462 ;  Sampson  v.  Swift, 
11  Vt.  315.  See  also  Forster  <;.  Fuller,  6  Mass.  58 ;  Townslcy  v.  Sumrall,  2  Pet. 
182  ;  Leonard  v.  Vredenburgh,  8  Johns.  29  ;  Bailey  v.  Freeman,  11  Johns.  221  ;  Stadt 
V.  Lill,  9  East,  348  ;  Tenney  v.  Prince,  4  Pick.  385. 

2  Hubbard  v.  Coolidge,  1  Met.  84.  And  in  Clark  v.  Sigourney,  17  Conn.  511,  it  was 
held,  that  any  act  done  by  the  promisee,  at  the  request  of  the  promisor,  by  which  the 


CH.  III.]  OF  CONSIDERATION.  27 


SECTION  n. 


■WHAT   IS   A   SUFFICIENT   CONSIDERATION. 

The  law  detests  litigation ;  and  considers  any  thing  a  suffi- 
cient consideration  which  arrests  and  suspends  or  terminates 
litigation.^  Thus  the  compromise,^  or  forbearance,^  or  refer- 
ence to  arbitration'*  ^or  any  similar  settlement  of  a  suit,  or 
of  a  claim, ^  is  a  good  consideration  for  a  promise  founded 
upon  it.  And  it  is  no  defence  to  a  suit  on  this  promise,  to  show 
that  the  claim  or  suit  thus  disposed  of  would  probably  have  been 

former  sustains  any  loss,  trouble,  or  inconvenience,  even  of  ther  most  trifling  descrip- 
tion, if  not  utterly  worthless  in  fact  and  in  law,  constitutes  a  sufficient  consideration 
for  a  promise,  although  the  promisor  derives  no  advantage  therefrom.  Therefore  where 
B,  at  the  request  of  A,  and  at  his  sole  risk,  executed  to  him  a  deed  of  release,  without 
covenants,  of  all  B's  right  in  certain  land  therein  described,  in  consideration  of  which, 
A  gave  his  promissory  note  to  B  for  $300 ;  and  it  afterwards  appeared  that  B  had  no 
title  to  the  land  so  conveyed  ;  it  was  held,  that  the  consideration  of  the  note  was  suffi- 
cient. So,  in  Sanborn  v.  French,  2  Fost.  246,  where  the  cases  were  examined  with 
much  learning  and  ability  by  Perley,  J.,  it  was  held  that,  in  the  absence  of  fraud  and 
mistake,  the  separate  deed  of  a  married  woman,  purporting  to  convey  her  land,  though 
inoperative  and  void  as  a  conveyance,  is  yet  a  sufficient  consideration  for  a  promissory 
note  made  payable  to  her.  And  the- learned  judge  said  :  —  "  The  court  cannot  inquire 
into  the  amount  and  adequacy  of  the  consideration.  If  the  contract  is  fairly  made,  with 
a  full  understanding  of  all  the  facts,  the  '  smallest  spark  '  of  consideration  is  sufficient." 
See  also  Speed  v.  Phillips,  3  Anst.  732;  Skeate  v.  Beale,  11  A.  &  E.  983;  Hitch- 
cock V.  Coker,  6  A.  &  E.  43S  ;  Whittle  v.  Skinner,  23  Vt.  532  ;  Low  v.  Barchard,  8 
Ves.  133  ;  McGhee  v.  Morgan,  3  Sch.  &  Lef.  395,  n.  (a)  ;  Floyer  v.  Sherard,  Amb.  18  ; 
Coles  V.  Trecothick,  9  Vesey,  246  ;  Kirwan  v.  Kirwan,  2  C.  «&  M.  623 ;  Phillips  v.  Bate- 
man,  16  East,  272  ;  Bedell  v.  Loomis,  II  N.  H.  9  ;  Johnson  v.  Titus,  2  Hill,  606.  But 
gross  inadequacy  of  consideration,  in  connection  with  other  circumstances,  may  help  to 
sustain  a  charge  of  fraud.  See  Prebble  v.  Bogherst,  1  Swanst.  329  ;  Cockell  v.  Tavlor, 
15  E.  L.  &  E.  101  ;  Edwards  v.  Burt,  15  E.  L.  &  E.  435  ;  Johnson  v.  Dorsey,  7  Gill, 
269  ;  Judge  v.  Wilkins,  19  Ala.  765 ;  Milnes  v.  Cowley,  8  Pri«e,  620. 

'  Penn  v.  Lord  Baltimore,  1  Ves.  444 ;  Stopilton  r.  Stopilton,  1  Atk.  3 ;  Wise- 
man V.  Roper,  1  Chan.  Rep.  158. 

"^  As  in  liarlow  v.  Ocean  Ins.  Co.  4  Met.  270,  where  it  was  held,  that  the  compromise 
of  an  action  upon  a  policy  of  insurance,  the  result  of  a  trial  of  the  case  being  doubtful, 
was  a  sufficient  consideration  to  uphold  a  promise.  And  see  Zane  v.  Zane,  6  Munf. 
406  ;  Fisher  v.  May,  2  Bibb,  448;  Taylor  v.  Patrick,  I  Bibb,  168 ;  Durham  v.  Wadling- 
ton,  2  Strobh.  Eq.  258;  Hoge  v.  Hoge,  1  Watts,  216;  Rice  v.  Bixler,  1  W.  &  S. 
456. 

^  Atkinson  v.  Bayntun,  1  Bing.  N.  C.  444.  See  also  1  Roll.  Abr.  24,  pi.  33  ;  Com. 
Dig.,  Action  upon  the  case  upon  assumpsit,  (B.  11)  ;  Willatts  v.  Kennedy,  8  Bing.  5  ; 
Morton  v.  Burn,  7  Ad.  &  E.  19;  King  v.  Upton,  4  Greenl.  387  ;  Elting  v.  Vanderlyn, 
4  Johns.  237. 

*  Jones  V.  Boston  Mill  Corp.  4  Pick.  507  ;  Hodges  v.  Saunders,  17  Pick.  470. 

5  Waterman  v.  Barrett,  4  Harring.  311  ;  Stebbins  v.  Smith,  4  Pick.  97;  Smith  r. 
Weed,  20  Wend.  184;  Hinman  v.  Moulton,  14  Johns.  466  ;  Haigh  v.  Brooks,  2  Per. 
&  Dav.  477 ;  Whitbeck  v.  Whitbeck,  9  Cowen,  266  ;  Brealey  v.  Andrew,  2  Nev.  &  P. 
114  ;  Davis  v.  Morgan.  4  B.  &  C  8. 


28  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  III. 

found  to  have  no  foundation  or  substance.'  If  the  claim  or 
suit  be  a  mere  pretence,  or  oppression,  and  have  no  reality  what- 
ever, and  there  is  no  rational  possibility  of  enforcing  it,  then 
indeed  it  is  nothing,  and  any  settlement  of  it  is  also  nothing, 
and  a  promise  founded  upon  such  settlement  rests  upon  no  con- 
sideration.2  g,j|  jf  f^ere  be  any  honest  claim,  which  he  who 
advances  it  believes  to  be  well  grounded,  and  which  within  a 
rational  possibility  may  be  so,  this  is  enough ;  the  court  will  not 
go  on  and  try  the  validity  of  the  claim  or  of  the  suit  in  order  to 
test  the  validity  of  a  promise  which  rests  upon  their  settlement ; 
for  the  very  purpose  for  which  it  favors  this  settlement  is  the 
avoidance  of  all  necessity  of  investigating  the  claim  by  litiga- 
tion.3     But  for  reasons  of  public  policy,  no  promise  can  be  en- 


1  In  Stapilton  v.  Stapilton,  1  Atk.  10,  it  was  decided  by  Lord  HardwicJce,  "  that 
an  agreement  entered  into  upon  a  supposition  of  rights,  or  of  a  doubtful  right,  though  it 
after  comes  out  that  the  right  was  on  the  other  side,  shall  be  binding,  and  the  right 
shall  not  prevail  against  the  agreement  of  the  parties  ;  for  the  right  must  ijlways  be  on 
one  side  or  the  other ;  and  therefore  the  compromise  of  a  doubtful  right  is  a  sufficient 
foundation  for  an  agreement."  And  in  O'Kesson  i;.  Barclay,  2  Penn.  531,  it  was  held 
that  the  compromise  of  an  action  of  slander,  in  which  the  words  laid  in  the  declara- 
tion were  not  actionable,  was  a  sufficient  consideration  to  sustain  a  promise.  And  see 
also,  Bennet  v.  Paine,  5  Watts,  259  ;  Moore  v.  Fitzwatei-,  2  Rand.  442;  Ex  parte  Lucv, 
21  E.  L.  &  E.  199. 

2  This  principle  is  well  illustrated  by  the  case  of  Wade  v.  Simeon,  2  C.  B.  548.  The 
declaration  stated  that  the  plaintiff  had  brought  an  action  against  the  defendant  in 
the  Exchequer,  to  recover  certain  moneys,  which  action  was  about  to  be  tried,  and  that 
in  consideration  that  the  plaintiff  would  forbear  proceeding  in  that  action  until  a  cer- 
tain day,  the  defendant  promised  on  that  day  to  pay  the  amount,  but  that  he  had 
made  default,  &c.  Plea,  that  the  plaintiff  never  had  any  cause  of  action  against  the 
defendant  in  respect  to  the  subject-matter  of  the  action  in  the  Exchequer,  which  he  the 
plaintiff  well  knew.  Upon  general  demurrer,  this  plea  was  held  sufficient,  and  Tindal, 
C.  J.,  said  :  '■  By  demurring  to  that  plea  the  plaintiff  admits  that  he  had  no  cause  of 
action  against  the  defendant  in  the  action  therein  mentioned,  and  that  lie  knew  it.  It 
appears  to  me,  therefore,  that  he  is  estopped  from  saying  that  there  was  any  valid  con- 
sideration for  the  defendant's  promise.  It  is  almost  contra  bonos  mores,  and  certainly 
contrary  to  all  the  principles  of  natural  justice,  that  a  man  should  institute  proceedings 
against  another,  when  he  is  conscious  that  he  has  no  good  causd  of  action.  In  order  to 
constitute  a  binding  promise,  the  plaintiff  must  show  a  good  consideration,  something 
beneficial  to  the  defendant,  or  detrimental  to  the  plaintiff.  Detrimental  to  the  plaintiff 
it  cannot  be,  if  he  has  no  cause  of  action  ;  and  beneficial  to  the  defendant  it  cannot  be, 
for,  in  contemplation  of  law,  the  defence  upon  such  an  admitted  state  of  facts  must  be 
successful,  and  tlie  defendant  will  recover  costs,  which  must  be  assumed  to  be  a  full 
consideration  for  all  the  legal  damage  he  may  sustain.  The  consideration,  therefore, 
altogether  fails.  On  the  part  of  the  plaintiff,  it  has  been  urged,  that  the  cases  cited  for 
the  defendant  were  not  cases  where  actions  had  already  been  brouglit,  but  only  cases  of 
promises  to  forbear  commencing  proceedings.  I  must  however  confess,  that,  if  it  were 
so,  I  do  not  see  that  it  would  make  any  substantial  difference."  And  see  Gould  v. 
Armstrong,  2  Hall,  26G  ;  Lowe  v.  Weatherley,  4  Dev.  &  Bat.  212;  Jones  v.  Ashburn- 
ham,  4  East,  455 ;  Smith  v.  Algar,  1  B.  &  Ad.  G04. 

^  Longridge  v.  Dorville,  5  B.  &  Aid.  117  ;  Thornton  v.  Fairlie,  2  Moore,  397  ;  Rich- 
ardson V.  Mellish,  2  Bing.  229  ;  Atlee  v.  Backhouse,  3  M.  &  W.  648;  Wilbur  v.  Crane, 
13  Pick.  284 ;  Mills  v.  Lee,  6  Monroe,  97 ;  Union  Bank  r.  Geary,  5  Pet.  114 ;  Bennet 
V.  Paine,  5  Watts,  259 ;  Stracy  v.  Bank  of  England,  6  Bing.  754. 


CH.  III.]  OF  CONSIDEKATION.  29 

forced  of  which  the  consideration  was  the  discontinuance  of  crim- 
inal proceedings,  or  of  any  in  which  the  public  are  interested.' 

If  any  work  or  service  is  rendered  to  one,  or  for  one,  and  he 
requested  the  same,  it  is  a  good  consideration  for  a  promise  of 
payment ;  and  not  only  so,  but  the  law  will  imply  the  promise.^ 
The  rule  is  the  same  as  to  goods,  or  property  of  any  kind  deliv- 
ered to  any  one  at  his  request.^  No  person  can  make  another 
his  debtor  against  that  other's  will,  by  a  voluntary  offer  of  work, 
or  service,  or  money,  or  goods.^  But  if  that  other  accept  what 
is  thus  offered,  and  retain  the  benefit  of  it,  the  law  will,  generally, 
imply  or  presume  that  it  was  offered  at  the  request  of  that  other 
party,  and  will  also  imply  his  promise  to  pay  for  it,  and  will 
enforce  the  promise.^ 

If  A  agrees  with  B  to  work  for  him  one  year,  or  any  stated 
time,  for  so  much  a  month,  or  so  much  for  the  whole  time,  and 
after  working  a  part  of  the  time,  leaves  B  without  good  cause, 
the  question  arises  whether  A  can  recover  any  thing  from  B  for 
the  service  he  has  rendered.  It  is  universally  conceded  that  he 
cannot  on  the  contract,  because  that  is  entire,  and  is  broken  by 

A,  and  therefore  A  has  no  claim  under  it.  And  it  is  the  ancient 
and  still  prevailing  rule,  that  A  can  recover  nothing  in  any  form.^ 
It  has  however  been  held  in  New  Hampshire,  that  A  can  still 
recover  whatever  his  services  are  worth,  B  having  the  right  to 

1  Coppock  V.  Bower,  4  M.  &  W.  361. 

-  1  Rol.  Abr.  11,  pi.  2,  3  ;  Hunt  v.  Bate,  Dyer,  272  ;  Taylor  v.  Jones,  1  Ld.  Eaym. 
312;  Newel  v.  Keith,  11  Vt.  214;  Tipper  v.  Bicknell,  3  Bing.  N.  C.  710;  1  Wms. 
Saund.  264,  n.  (1) ;  Abbot  v.  Hermon,  7  Gi-eenl.  118. 

3  Brackett  v.  Norton,  4  Conn.  524  ;  Pichards  v.  Sears,  6  Ad.  &  El.  474. 

*  In  Frear  v.   Hardenburgh,  5  Johns.  272,  where  A  entered  on  land  belonging  to 

B,  and  without  his  knowledge  or  authority,  cleared  it,  made  improvements,  erected 
buildings,  &c.,  and  B  afterwards  promised  to  pay  A  for  the  improvements  he  had  made, 
it  was  held  that  the  promise  to  pay  for  the  work  done  and  impi'ovements  made,  without 
the  request  of  B,  was  a  nudum  jmctum  on  which  no  action  could  be  maintained.  And 
sec  1  llol.  Abr.  11,  pi.  1 ;  Hunt  v.  Bate,  Dyer,  272,  a;  Hayes  v.  Warren,  2  Str.  933  ; 
Dogget  y.  Vowell,  Moore,  643;  Jeremy  v.  Goochman,  Cro.  Eliz.  442;  Eoscorla  v. 
Thomas,  3  Q.  B.  234 ;  Bartholomew  v.  Jackson,  20  Johns.  28. 

5  As  in  Abbott  v.  Hermon,  7  Greenl.  118,  where  one  built  a  school-house  under  a 
contract  with  persons  assuming  to  act  as  a  district  committee,  but  who  had  no  author- 
ity ;  and  a  district  school  was  afterwards  kept  in  it  by  direction  of  the  school  agent. 
This  was  held  to  be  an  acceptance  of  the  house  on  the  part  of  the  district,  binding  the 
inhabitants  to  pay  the  reasonable  value  of  the  building.  And  see  Weston  v.  Davis.  24 
Maine,  374  ;  Law  v.  Wilkin,  6  Ad.  &  E.  718  ;  Nicholc  v.  Allen,  3  C.  &  P.  36.  But  see 
as  to  this  last  case,  Mortimore  v.  Wright,  6  M.  &  W.  485. 

^  Thorpe  v.  White,  13  Johns.  53  ;  M'Millan  v.  Vanderlip,  12  Johns.  165 ;  Jennings  v. 
Camp,  13  Johns.  94;  Mullen  v.  Gilkinson,  19  Vt.  503;  Davis  r.  Maxwell,  12  Met. 
286  ;  Stark  v.  Parker,  2  Pick.  267  ;  Olrastead  r.  Bealc,  19  Pick.  528  ;  Shaw  v.  Turnp. 
Co.  2  Penn.  454;  Eldridgc  v.  Rowe,  2  Oilman,  91;  Lantry  y.  Parks,  8  Cowen,  63; 
Marsh  v.  Rulesson,  1  Wend.  514;  Monell  v.  Burns,  4  Denio,  121. 

3* 


30  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  III. 

set  off  or  deduct  the  amount  of  any  damage  lie  may  have  sus- 
tained from  A's  breach  of  the  contract.'  We  think  this  view  just 
and  reasonable,  although  it  has  not  been  supported  by  adjudica- 
tion in  other  States.  If  A  agrees  to  sell  to  B  five  hundred  bar- 
rels of  flour  at  a  certain  price,  and  after  delivering  one  half  refuses 
to  deliver  any  more,  B  can  certainly  return  that  half,  and  pay  A 
nothing.  But  if  B  chooses  to  retain  that  half,  or  if  he  has  so 
disposed  of  or  lost  it  that  he  cannot  return  it,  he  must,  generally 
at  least,  pay  what  it  is  worth,  deducting  all  that  he  loses  by  the 
breach  of  the  contract.  And  this  case  we  think  analogous  to 
that  of  a  broken  contract  of  service.^ 

A  difficulty  sometimes  arises  where  A,  at. the  request  of  B, 
undertakes  to  do  something  for  B,  for  which  he  is  to  be  paid  a 
certain  price  ;  and  in  doing  it  he  departs  materially  from  the 
directions  of  B  and  from  his  own  undertaking.  What  are  now 
the  rights  of  the  parties  ?  This  question  arises  most  frequently 
in  building-contracts,  in  which  there  is  perhaps  usually  some 
departure  from  the  original  undertaking.  The  general  rules  are 
these.  If  B  assent  to  the  alteration,  it  is  the  same  thing  as  if  it 
were  a  part  of  the  original  contract,^  He  may  assent  expressly, 
by  word  or  in  writing,  or  constructively,  by  seeing  the  work,  and 
approving  it  as  it  goes  on,  or  being  silent ;  for  silence  under  such 
circumstances  would  generally  be  equivalent  to  an  approval."* 
But  if  the  change  be  one  which  B  had  a  right,  either  from  the 
nature  of  the  change,  or  the  appearance  of  it,  or  A's  language 
respecting  it,  to  suppose  would  add  nothing  to  the  cost,  then  no 

'«In  Britton  v.  Turner,  6  N.  H.  481,  this  whole  subject  was  ably  examined  by  Parker^ 
J.,  and  the  court  came  to  the  conclusions  stated  in  the  text. 

^  In  New  York,  however,  it  is  held  that  B  cannot  be  compelled  to  pay  any  thing  in 
this  last  case.  See  Champlin  v.  Kowley,  13  Wend.  258,  18  Id.  l87  ;  Mead  v.  Degol- 
yer,  IG  Wend.  632  ;  McKnight  v.  Dunlop,  4  Barb.  36  ;  Paige  v.  Ott,  5  Denio,  406. 

3  See  Dubois  v.  Del.  &  Hud.  Canal  Co.  12  Wend.  334 ;  Preston  v.  Finney,  2  W.  & 
S.  53;  Albany  Dutch  Church  v.  Bradford,  8  Cowen,  457. 

*  Hayward  v.  Leonard,  7  Pick.  181.  In  this  case,  A  contracted  in  writing  to  build  a 
house  for  B,  within  a  certain  time,  of  certain  dimensions,  and  in  a  certain  manner,  and 
afterwards  built  the  house  within  the  time,  and  of  the  dimensions  agreed  upon,  but 
in  workmanship  and  materials  varying  from  •the  contract.  B  was  present  almost 
evei-y  day  during  the  building,  and  had  an  opportunity  of  seeing  the  materials  and 
labor,  and  objected  at  times  to  part  of  the  materials  and  work,  but  continued  to  give 
directions  about  the  house,  and  ordered  some  variations  from  the  contract.  He  ex- 
pressed himself  satisfied  with  parts  of  the  work  from  time  to  time,  though  professing 
to  be  no  judge  of  it.  Soon  after  the  house  was  done,  he  refused  to  accept  it,  but  A  had 
no  knowledge  that  he  intended  to  refuse  it  until  after  it  was  finished.  It  was  held  that 
A  might  maintain  an  action  against  B  on  a  quantum  meruit  for  his  labor,  and  on  a  quan- 
tum valebant  for  the  materials.  See  also  Norris  v.  Windsor,  4]  Fairf.  293  ;  Wilhelm  r. 
Caul,  2  W.  &  S.  27  ;  Adams  v.  Hill,  16  Maine,  215. 


en.  III.]  OF   CONSIDERATION.  31 

promise  to  pay  an  increased  price  would  be  inferred  from  either 
an  express  or  tacit  approval.^  Generally,  as  we^  have  seen,  if  A 
does  or  makes  what  B  did  not  order  or  request,  B  can  refuse  to 
accept  it,  and  if  he  does,  he  will  not  then  be  held  to  pay  for  it. 
But  if  he  accepts  it,  he  must  pay  for  it.  This  consequence 
results,  however,  only  from  a  voluntary  acceptance.  For  if  A 
choose,  without  any  request  from  B,  to  add  something  to  B's 
house,  or  make  some  alteration  in  it,  which  being  done  cannot  be 
undone  or  taken  away  without  detriment  to  the  house,  B  may 
hold  it,  and  yet  not  be  liable  to  pay  for  it ;  and  A  has  no  right  to 
take  it  away,  unless  he  can  do  so  without  inflicting  any  injury 
whatever  on  B.^  This  rule  would  apply  whether  the  addition  or 
alteration  were  larger  or  smaller. 

It  is  sometimes  provided  in  building  contracts  that  B  shall  pay 
for  no  alteration  or  addition  unless  previously  ordered  by  him  in 
writing.  But  if  there  be  such  provision,  B  would  be  liable  for 
any  alteration  or  addition  he  ordered  in  any  way,  or  voluntarily 
accepted. 

So  it  is  sometimes  agreed  that  any  additions  or  alterations 
shall  be  paid  for  at  the  same  rate  as  the  work  contracted  for. 
But  we  think  that  the  law  would  imply  this  agreement  if  the 
parties  did  not  make  it  expressly.^ 

1  In  Lovelock  v.  King,  1  Moo.  &  R.  60,  a  very  important  and  wholesome  principle 
was  laid  down  by  Lord  Tenterden  upon  the  subject  of  extra  work.  The  action  was  as- 
sumpsit upon  a  carpenter's  bill  for  alterations  in  a  house  of  the  defendant.  In  sum- 
ming up  to  the  jury,  his  lordship  said  :  "  That  the  case,  although  vei-y  common  in  its 
circumstances,  involved  a  very  important  principle,  and  required  their  very  serious  con- 
sideration. In  this  case,  as  in  most  others  of  the  kind,  the  work  was  originally  under- 
taken on  a  contract  for  a  fixed  sum.  A  person  intending  to  make  alterations  of  this 
nature  generally  consults  the  person  whom  he  intends  to  employ,  and  ascertains,  from 
him  the  expense  of  the  undertaking ;  and  it  will  very  frequently  depend  upon  this  esti- 
mate whether  he  proceeds  or  not.  It  is  therefore  a  great  hardship  upon  him  if  he  is  to 
lose  the  protection  of  this  estimate,  unless  he  fully  understands  that  such  consequences 
will  follow,  and  assents  to  them.  In  many  cases  he  will  be  completely  ignorant  whether 
the  particular  alterations  suggested  will  produce  any  increase  of  labor  and  expendi- 
tures ;  and  I  do  not  think  that  the  mere  fact  of  assenting  to  them  ought  to  deprive 
him  of  the  protection  of  his  contract.  Sometimes,  indeed,  the  nature  of  the  alterations 
will  be  such  that  he  cannot  fail  to  be  aware  that  they  must  increase  the  expense,  and 
cannot  therefore  suppose  that  they  arc  to  be  done  for  the  contract  price.  But  where 
the  departures  from  the  original  scheme  are  not  of  that  character,  I  think  the  jury 
would  do  wisely  in  considering  that  a  party  does  not  abandon  the  security  of  his  con- 
tract by  consenting  that  such  alterations  shall  be  made,  unless  he  is  also  informed  at 
the  time  of  the  consent,  that  the  effect  of  the  alteration  will  be  to  increase  the  expense 
of  the  work." 

'  -  It  was  held  by  Lord  Tenterden,  in  Wilmot  v.  Smith,  3  C.  &  P.  453,  that  if  A  agree.? 
to  make  an  article  of  certain  materials  for  a  stipulated  price,  but  puts  in  materials  of  a 
better ^iind,  he  is  not  at  liberty  on  that  account  to  charge  more  than  the  stipulated 
price,  nor  can  he  require  the  article  to  be  returned  because  the  buyer  will  not  pay  an 
increased  price  on  account  of  the  better  materials. 

3  But  this  point  is  not  well  settled.  See  Jones  v.  Woodbury,  11  B.Mon.  167  ;  Farmer 


32  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  III. 

A  promise  is  a  good  consideration  for  a  promise  ;  and  it  is  one 
which  frequentl]j^occurs  in  fact.^  But  it  is  said  that- the  promises 
must  be  mutual ;  -  and  sometimes  questions  of  this  sort  have 
arisen  ;  if  A  promises  to  live  with  B  two  years,  for  the  purpose 
of  learning  a  certain  trade,  but  B  makes  no  express  promise,  and 
A  leaves  at  the  end  of  one  year,  it  has  been  said  that  B  can- 
not recover  damages,  because  there  was  no  consideration  for  A's 
promise,  inasmuch  as  B  made  no  promise.'^  But  we  should  rather 
say  in  such  cases,  that  if  A  performed  his  promise,  he  might 
have  an  action  against  B  on  his  constructive  or  implied  promise 
to  teach  ;  and  that  this  constructive  or  implied  promise  to  teach 
was  a  sufficient  consideration  for  A's  promise  to  stay  with  B.^ 

So,  if  A  says  to  B,  "  If  you  will  deliver  goods  to  C,  I  will  pay 

u.  Francis,  12  Iredell,  282;  Tebbetts  v.  Ilaskins,  16  Maine,  288;  McCorraick  v.  Con- 
noly,  2  Bay,  401  ;  Wright  v.  Wright,  1  Litt.  179  ;  Dubois  v.  Del.  &  Hud.  Canal  Co. 
12  Wend.  334. 

1  See  White  v.  Demilt,  2  Hall,  405,  which  was  assumpsit  for  breach  of  the  defend- 
ant's contract  to  sell  and  deliver  certain  goods  to  the  plaintiff.  It  was  held  that  the 
jyromise  of  the  latter  to  accept  the  goods  and  pay  for  them  was  a  good  consideration  for 
the  defendant's  promise  to  deliver  them.  And  inMcNiell  v.  Ecid,  2  Moore  &  S.  89,  which 
was  an  action  for  the  breach  of  an  agreement  entered  into  by  one  of  several  partners  to 
admit  a  stranger  into  the  firm,  it  was  held  that  it  Avas  a  sufficient  consideration  for  the 
defendant's  promise  that  the  plaintiff  had  promised  and  was  willing  to  become  a  part- 
ner. And  see  also  Howe  v.  O'Mally,  1  Murph.  287  ;  Miller  v.  Drake,  1  Caincs,  4.5  ; 
Gowcr  V.  Capper,  Cro.  Eliz.  543  ;  Wentworth  v.  Bullen,  9  B.  &  C.  840 ;  Cartwright  v. 
Cooke,  3  B.  &  Ad.  703. 

2  In  Lester  v.  Jewett,  12  Barb.  502,  the  plaintiff  brought  an  action  upon  an  instru- 
ment executed  by  defendant,  whereby  he  agreed,  at  the  expiration  of  one  year  from  its 
date,  to  purchase  of  the  plaintiff  thirty  shares  of  the  capital  stock  of  the  Southern  Life 
Insurance  and  Trust  Company,  for  the  sum  of  three  thousand  dollars.  It  was  held 
that  the  agreement  on  the  part  of  the  defendant  to  purchase  was  void  for  want  of 
mutuality,  there  being  no  corresponding  obligation  on  the  plaintiff  to  sell.  And  see 
Governor,  &c.  of  Copper  Miners  v.  Fox,  3  E.  L.  &  E.  420  ;  McKinly  v.  Watkins,  13  111. 
140;  Nichols  v.  Raynbred,  Hob.  88  ;  Biddel  v.  Dowse,  6  B.  &  C.  255  ;  Dorsey  v.  Pack- 
wood,  12  How.  12G. 

'^  Lees  V.  Whitcomb,  2  M.  &  P.  86,  which  was  assumpsit  for  the  breach  of  the  fol- 
lowing written  agreement:  "I  hereby  agree  to  remain  with  Mrs.  D.  (the  plaintiff's 
wife)  for  two  years  from  the  date  hereof,  for  the  purpose  of  learning  the  business  of  a 
dressmaker,  &c."  JJeld  that  such  agreement  was  nudum  pactum,  and  not  binding,  as  it 
contained  no  engagement  by  the  plaintiff  or  his  wife  to  teach.  And  see,  to  the  same 
effect,  Sykes  v.  Dixon,  9  Ad.  &  E.  693. 

*  In  Phelps  V.  Townsend,  8  Pick.  392,  the  defendant  gave  the  plaintiffs  a  written 
contract,  by  which,  after  reciting  that  he  placed  his  son  with  the  plaintiffs  to  learn  the 
art  of  printing,  "  to  stay  till  he  is  twenty-one  years  of  age,"  the  defendant  agreed,  in 
consideration  of  the  son's  being  so  old,  (he  was  then  eighteen)  to  pay  the  plaintiff  a 
stipulated  amount  if  the  son  did  not  continue  in  the  plaintiff's  employment  six  months 
after  he  was  twenty-one.  The  son  entered  into  the  plaintiff's  employment  in  pursu- 
ance of  the  agreement,  and  was  instructed  in  tlie  art  of  printing  for  some  months, 
when  ho  left  the  plaintiffs  without  cause.  Au  action  being  brought  upon  this  agree- 
ment, it  was  objected  that  the  contract  was  void  for  want  of  mutuality,  there  being  no 
obligation  on  the  plaintiffs  to  do  any  thing  which  miglit  form  a  consideration  for  the 
defendant's  promise.  But  the  court  said,  "that  the  acceptance  of  the  contractWby  the 
plaintiffs,  and  the  execution  of  it  in  part  by  receiving  the  apprentice,  created  an  obli- 
gation on  their  part  to  maintain  and  instruct  the  defendant's  son." 


CH.  III.]  OF   CONSIDERATION.  33 

for  them,"  although  there  is  no  obligation  upon  B  to  deliver  the 
goods,  and  therefore  no  mutuality  in  the  contract,  yet,  if  he  does 
deliver  them,  he  furnishes  a  consideration  for  the  agreement,  and 
may  enforce  it  against  AJ  There  is  also  an  exception  to  this 
requirement  of  mutuality  in  the  case  of  contracts  between  infants 
and  persons  of  full  age.  For  though  the  infant  may  avoid  his 
contract,  the  adult  is  bound.^ 

An  agreement  by  two  or  more  parties  to  refer  disputes  or 
claims  between  them  to  arbitration,  is  not  binding  upon  any  of 
the  parties  unless  all  have  signed  it.'^ 

This  principle,  that  a  promise  is  a  good  consideration  for  a 
promise,  has  been  sometimes  applied  to  subscription  papers ;  all 
who  sign  them  being  held  on  the  ground  that  the  promise  of 
each  is  a  good  consideration  for  the  promises  of  the  rest.'*  But 
they  are  not  often  promises  to  each  other ;  being  generally  the 
promise  of  all  the  subscribers  to  some  third  party  \Vho  makes 
no  promise.  The  law  on  the  subject  of  these  subscription  papers, 
and  of  all  voluntary  promises  of  contribution,  is  as  yet  somewhat 
unsettled,  the  cases  not  being  reconcilable.  The  prevailing  rule 
seems,  however,  to  be  this;  no  such  promises  are  binding,  unless 
somettiing  is  paid  for  them,  or  unless  some  party  for  whose  ben- 
efit they  are  made  —  and  this  party  may  be  one  or  more  of  the 
subscribers  —  at  the  request,  express  or  implied,  of  the  promisors, 
and  on  the  faith  of  the  subscriptions  incurs,  actual  expense  or 
loss,  or  enters  into  valid  contracts  with  other  parties  which  will 
occasion  expense  or  loss.^     As  the  objection  to  these  promises  is 

1  L'Amoreux  v.  Gould,  3  Scld.  349  ;  Parsons  on  Cont^pp.  375,  376.  But  see  Dor- 
sey  V.  Packwood,  12  How.  126. 

2  Warwick  v.  Bruce,  2  M.  &  S.  205  ;  Holt  v.  Ward  Clarencieux,  2  Str.  937  ;  Hunt  v. 
yeake,  5  Cow.  475 ;  Willard  v.  Stone,  7  Cow.  22. 

3  See  Antram  v.  Chace,  15  East,  212  ;  Biddell  v.  Dowse,  9  D.  &  K,404;  Kingston  v. 
Phelps,  Peake,  227. 

*  See  The  Congregational  Society  in  Troy  v.  Perry,  6  N.  H.  164.  In  this  case,  which 
was  assumpsit  upon  a  promissory  note,  whereby  the  defendant,  in  consideration  that_  a 
fund  of  one  thousand  dolLars  or  upwards  should  be  raised  for  the  support  of  the  minis- 
try in  the  Congregational  Society  in  Troy,  promised  to  pay  said  society  in  part  of  the 
fund  fifty  dollars  on  demand,  &c.  The  defendant  objected  that  the  note  was  void  for 
want  of  a  consideration  ;  but  the  court  held,  that  where  several  promise  to  contribute  to 
a  common  object,  which  they  wish  to  accomplish,  the  promise  of  each  is  a  good  con- 
sideration for  the  promise  of  the  others.  And  see  George  v.  Harris,  4  N.  H.  533  ;  per 
Walworth,  C,  in  Stewart  i-.^The  Trustees  of  Hamilton  College,  2  Denio,  416,  417. 

5  See  the  recent  case  of  Barnes  v.  Perine,  9  Barb.  202,  15  Id.  249,  2  Kern.  18,  where 
the  i-ule  is  declared  in  accordance^with  what  we  have  stated  in  the  text,  and  the  defend- 
ant hekl  liable  as  coming  within  the  terms  of  it.  Allen,  J.,  in  delivering  his  opinion  in 
the  Court  of  Appeals,  thus  remarks  upon  the  irreconcilable  conflict  in  the  authorities 
upon  this  question  :  "An  attempt  to  reconcile  all  the  cases  which  have  been  adjudged, 


34  '  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  III. 

the  want  of  consideration,  it  may  perhaps  be  cured  by  a  seal  to 
each  name,  or  by  one  seal  which  all  the  parties  agree  to  consider 
the  seal  of  each. 


SECTION  III. 


OF   ILLEGAL   CONSIDERATIONS. 

If  the  whole  of  a  consideration,  or  if  any  part  of  the  considera- 
tion of  an  entire  and  indivisible  promise,  be  illegal,  the  promise 
founded  upon  it  is  void.'  But  if  the  consideration  consists  of 
separable  parts,  and  the  promise  consists  of  corresponding  sepa- 
rable parts,  which  can  be  apportioned  and  applied,  part  to  part, 
there  each  illegality  will  affect  only  the  promise  resting  on  it ;  for 
in  fact  there  are  many  considerations  and  many  promises.^ 

If  the  consideration  be  entire  and  wholly  legal,  and  the  promise 
consists  of  separable  parts,  one  legal  and  the  other  illegal,  the 
promisee  can  enforce  that  part  which  is  legal.^     When  a  law 

touching  the  validity  of  voluntary  engagements  to  pay  money  for  charitable,  educa- 
tional, religious,  or  other  public  purposes,  would  be  fruitless  ;  for,  while  circumstantial 
differences  in  the  cases  will  explain  and  satisfactorily  account  for  some  of  the  diversi- 
ties in  the  decisions,  it  will  be  found  that  there  is,  to  some  extent,  a  want  of  harmony 
in  the  principles  and  rules  applied  as  tests  of  validity  to  that  class  of  undertakings. 
The  general  principle  is  recognized  in  every  case,  that  all  simple  contracts  executory, 
whether  in  writing  or  verbal,  must  be  founded  upon  a  good  consideration ;  that  the  want 
of  a  legally  adequate  consideration,  that  is,  a.  consideration  recognized  as  sufficient  in 
law,  will  vitiate  every  executory  contract  not  under  seal ;  still,  the  objection  of  a  want 
of  consideration  for  promises  like  the'  one  before  us  has  not  always  been  regarded  with 
favor ;  and  judges,  considering  defences  of  that  character  as  breaches  of  faith  towards 
the  public,  and  especially  towards  those  engaged  in  the  same  entcrprize,  and  an  unwar- 
rantable disappointment  of  the  reasonable  expectations  of  those  interested,  have  been 
willing,  nay,  apparently  anxious,  to  discover  a  consideration  whicii  would  uphold  the 
undertaking  as  a  valid  contract ;  and  it  is  not  unlikely  that  some  of  the  cases,  in  which 
subscriptions  have  been  enforced  at  law,  have  been  border  cases,  distinguished  by  slight 
circumstances  from  agreements  held  void  for  a  want  of  consideration."  These  con- 
flicting cases  will  be  found  fully  collected  in  1  Parsons  on  Cont.  pp.  377,  378. 

1  Thus,  in  HinesburgTi  v.  Sumner,  9  Vt.  23,  where  a  note  was  given  in  part  for  the 
compounding  of  penalties  and  suppressing  of  criminal  prosecutions,  it  was  held  to  be 
wholly  void  and  uncollectable.  And  in  Ueering  v.  Chapman,  22  Maine,  488,  where  a 
part  of  the  consideration  of  a  note  was  spirituous  liquors  sold  by  the  payee,  in  violation 
of  the  statute,  such  note  was  held  to  be  wholly  void.  And  sec  Collins  v.  Blantern,  2 
Wilson,  347  ;  Hall  v.  Dyson,  10  E.  L.  &  E.  424  ;  Gamble  v.  Grimes,  2  Cart.  (Ind.)  392  ; 
Coulter  V.  Robertson,  14  Sm.  «&  M.  18  ;  Filson  v.  Himes,  6  Barr,  452  ;  Woodruff  v.  Hin- 
raan,  11  Vt.  592;  Armstrong  v.  Toler,  11  Wheat.  258;  Brown  v.  Lan^ford,  3  Bibb, 
500  ;  Donallen  v.  Lennox,  6  Dana,  91 ;  Benyon  v.  Nettlcford,  2  E.  L.  &  JE.  113. 

"  See  Yundt  v.  Roberts,  5  S.  &  R.  141  ;  Frazier  v.  Thompson,  "2  W.  &  S.  235. 

^  In  Bishop  of  Chester  v.  Freeland,  Ley,  79,  Hitlton,  J.,  lays  down  the  rule  that  when 
a  good  thing  and  a  void  thing  are  put  together  in  the  same  grant,  the  common  law 
makes  such  construction  that  the  grant  shall  be  good  for  that  which  is  good,  and  void 
for  that  which  is  void.  And  see  to  the  same  effect,  Iverrison  v.  Cole,  8  East,  236  ;  Nor- 
ton V.  Simmes,  Hob.  14  ;  per  Bronson,  J.,  in  Leavitt  v.  Palmer,  3  Comst.  37  ;  Bank  of 


en.  III.]  OF   CONSIDERATION.  35 

provides   a  penalty  for  an  act,  that  act  is  held  to  be   illegal, 
although  it  is  not  expressly  prohibited.^ 


SECTION  IV. 

or   IMPOSSIBLE   COKSIDERATIONS. 

So  no  contract  or  promise  can  be  enforced  by  him  who  knew 
that  the  performance  of  it  was  wholly  impossible  ;  and  therefore 
a  consideration  which  is  obviously  and  certainly  impossible,  is 
not  sufficient  in  law  to  sustain  a  promise.^  But  if  one  makes  a 
promise,  he  cannot  always  defend  himself  when  sued  for  non-per- 
formance by  showing  that  performance  was  impossible ;  for  it 
may  be  his  own  fault,  or  his  personal  misfortune,  that  he  cannot 
perform  it.  He  had  no  right  to  make  such  a  promise,  and  must 
respond  in  damages ;  or  if  he  had  a  right  to  make  it  in  the  ex- 
pectation of  performance,  and  this  has  become  impossible  subse- 

Australasia  v.  Bank  of  Australia,  12  Jur.  189;  Chase's  Executors  r.  Burkliolder,  18 
Penn.  50  ;  Leavitt  v.  Blatchford,  5  Barb.  9  ;  Hook  v.  Gray,  6  Barb.  398. 

1  In  Seidenbender  v.  Charles's  Adm'rs,  4  S.  &  R.  160,  'Tilghman,  C.  J.,  said  that  he 
considered  it  as  perfectly  settled  that  an  action  cannot  be  sustained  founded  on  a  trans- 
action prohibited  by  statute,  although  it  be  not  expressly  declared  that  the  contract  is 
void;  and  this  principle  is  sustained  by  numerous  cases.  See  1  Parsons  on  Cont.  382, 
n^(«),  where  they  will  be  found  collected.  As  to  the  etFect  of  the  repeal  of  a  prohibit- 
ing statute  upon  existing  contracts,  see  Milne  v.  Huber,  3  McLean,  212. 

^  See  Nerot  v.  Wallace,  3  T.  R.  17.  In  this  case  a  promise  was  made  by  the  de- 
fendant to  the  assignees  of  a  bankrupt,  when  the  latter  was  on  his  last  examination, 
that  in  consideration  that  the  assignees  would  forbear  to  have  the  bankrupt  examined, 
and  that  the  commissioners  would  desist  from  taking  such  examination,  touching  mon- 
eys alleged  to  have  been  received  by  the  bankrupt  and  not  accounted  for,  he,  the  de- 
fendant, Avould  pay  such  moneys  to  the  assignees.  This  promise  was  held  by  the  court 
to  be  illegal,  as  being  against  the  policy  of  the  bankrupt  laws.  And  Lord  Kenyan  said : 
"  I  do  not  say  that  this  is  nudum  pactum ;  but  the  ground  on  which  I  found  my  judg- 
ment is  this  ;  that  every  person  who  in  consideration  of  some  advantage,  either  to  him- 
self or  to  another,  promises  a  benefit,  must  have  the  power  of  conferring  that  benefit  up 
to  the  extent  to  which  that  benefit  professes  to  go ;  and  that  not  only  in  fact,  but  in 
law.  Now  the  promise  made  by  the  assignees  in  this  case,  which  was  the  consideration 
of  the  defendant's  promise,  was  not  in  their  power  to  perform  ;  because  the  commis- 
sioners had  nevertheless  a  right  to  examine  the  bankrupt ;  and  no  collusion  of  the 
assignees  could  deprive  the  creditors  of  the  right  of  examination  which  the  commis- 
sioners would  procure  them."  And  Ashurst,  J.,  said :  "  In  order  to  found  a  consider- 
ation for  a  promise,  it  is  necessary  that  the  party  by  whom  it  is  made  should  have  the 
power  of  carrying  it  into  effect;  and,  secondly,  that  the  thing  to  be  done  skould  in 
itself  be  legal.  Now  it  seems  to  me  that  the  consideration  for  this  promise  isA-oid  on 
both  these  grounds.  The  assignees  have  no  right  to  control  the  discretion  of  the  com- 
missioners ;  and  it  would  be  criminal  in  them  to  enter  into  such  an  agreement ;  because 
it  is  their  duty  to  examine  the  bankrupt  fully,  and  the  creditors  may  call  on  them  to 
perform  it.  And  for  the  same  reason  the  thing  to  be  done  is  also  illegal,"  And  see 
Shep.  Touch.  164 ;  2  Bl.  Com.  341  ;  22  Am.  Jur.  20:  Co.  Litt.  20,  6  a;  Bates  v.  Cort, 
2  B.  &  C.  474. 


36  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  in. 

quently —  as  by  loss  of  property,  for  example  —  this  is  his  mis- 
fortune, and  no  answer  to  a  suit  on  the  promise.'  There  are, 
however,  obviously  promises  or  contracts,  which,  from  their  very 
nature,  must  be  construed  as  if  the  promisor  had  said,  "  I  will  do 
so  and  so,  if  I  can."  For  example,  if  A  promises  to  work  for  B 
one  year,  at  $20  a  month,  and  at  the  end  of  six  months  is  wholly 
disabled  by  sickness,  he  is  not  liable  to  an  action  by  B  for  breach 
of  his  contract ;  and  there  is  authority  for  saying  that  he  can 
recover  his  pay  for  the  time  that  he  has  spent  in  B's  service.^ 


SECTION  V. 

OF    FAILURE    OF   CONSIDERATION. 

If  a  promise  be  made  upon  a  consideration  which  is  apparently 
valuable  and  sufficient,  but  which  turns  out  to  be  nothing;  or  if 
the  consideration  was  originally  good,  but  becomes  wholly  value- 
les9»before  part  performance  on  either  side,  there  is  an  end  of  the 
contract,  as  the  promise  cannot  be  enforced.^  And  if  money 
were  paid  on  such  a  consideration,  it  can  be  recovered  back.* 
But  it  is  said  that  only  the  sum  paid  can  be  so  recovered,  with- 
out any  increase  or  addition  as  compensation  for  plaintiff's  loss 
and  disappointment.^ 

1  Blight  V.  Page,  3  B.  &  P.  296,  note;  Worsley  i-.  Wood,  6  T.  K.  718  ;  Tufnell  f. 
Constable,  7  Ad.  &  El.  793.  In  the  recent  case  of  Harmony  v.  Bingham,  1  Duer,  209, 
2  Kern.  99,  where  the  defendant  agreed  to  transport  merchandise  from  New  York,  and 
deliver  it  at  Independence,  in  Missouri,  within  twenty-six  days,  which  he  failed  to  ac- 
complish within  that  time,  it  was  held  by  the  Court  of  Appeals,  affirming  the  decision  of 
the  Superior  Court  of  the  city  of  New  York,  that  the  fact  that  a  public  canal,  upon 
which  the  goods  were  intended  to  be  transported  a  part  of  the  distance,  was  rendered 
impassable  by  an  unusual  freshet,  and  that  this  occasioned  the  detention,  was  not  a  legal 
excuse  therefor.  So  it  has  been  held  that  it  is  not  a  valid  excuse  for  the  non-perform- 
ance of  an  agreement  to  deliver  goods  of  a  certain  quality,  that  goods  of  that  quality 
were  not  to  be  had  at  the  particular  season  when  the  contract  was  to  be  executed. 
Youqua  v.  Nixon,  1  Pet.  C.  C.  221 ;  Gilpins  v.  Consequa,  1  Pet.  C.  C.  91.  And  see 
Huliiig  V.  Craig,  Addison,  342. 

'^  Dickey  v.  Linscott,  20  Maine,  453;  Fenton  v.  Clark,  11  Vt.  557  ;  Seaver  v.  Morse, 
20  Vt.  620;  Fuller  y.  Brown,  11  Met.  440.  But  see  Lord  r.  Wheeler,  1  Gray,  282; 
Oakley  v.  Morton,  1  Kern.  25. 

3  Treat  t'..Orono,  26  Maine,  217  ;  Murray  v.  Carret,  3  Call,  373  ;  Woodward  v.  Cow- 
ing, 13  Mass.  216  ;  Moses  v.  Macferlan,  2  Burr.  1012  ;  Wharton  v.  O'Hara,  2  N.  &  Mc- 
Cord,  65.;  Boyd  v.  Anderson,  1  Overton,  438. 

■*  As  in  Boyd  v.  Anderson,  supra,  where  A  purchased  a  land-warrant,  and  being  ig- 
norant of  its  invalidity,  sold  it  to  B  for  a  valuable  consideration.  The  warrant  after- 
wards being  adjudged  invalid,  it  was  held  tha't  B  might  recover  back  the  price  in 
assumpsit.  And  see  Sandford  v.  Dodd,  2  Day,  437  ;  Colville  v.  Besley,  2  Denio,  139. 
But  the  failure  of  consideration  must  be  total  in  order  to  warrant  such  recovery.  Dean 
V.  Mason,  4  Conn.  428  ;  Charlton  v.  Lay,  5  Humph.  496. 

"  See  Neel  v.  Deens,  1  N.  &  McCord,  210. 


CH.  III.]  OF   CONSIDERATION.  37 

If  the  failure  of  consideration  be  partial  only,  leaving  a  sub- 
stantial, though  far  less  valuable  consideration  behind,  this  may 
still  be  a  sufFicient  foundation  for  the  promise,  if  that  be  entire.^ 
But  the  promisor  will  then  be  entitled,  by  deduction,  set-olT,  or  in 
some  other  proper  way,  to  due  allowance  or  indemnity  for  what- 
ever 'loss  he  may  sustain  as  to  those  other  parts  of  the  bar- 
gain, or  as  to  the  whole  transaction,  from  the  partial  failure  of 
the  consideration.^  And  if  the  promise  be  itself  separable  into 
parts,  and  a  distinct  part  or  proportion  of  the  consideration  failed, 
to  which  part  some  distinct  part  or  proportion  of  the  promise 
could  be  applied,  that  part  can  not  be  enforced,  although  the  resi- 
due of  the  promise  may  be. 


SECTION  VI. 

OF   THE    RIGHTS   OF   OXE   WHO   IS   A   STRANGER   TO    THE   CONSIDERATION. 

Formerly  it  was  held  that  no  one  who  was  a  stranger  to  the 
consideration  could  enforce  a  promise  resting  upon  it.^     But  this 

1  Sec  Franklin  v.  Miller,  4  Ad.  &  El.  599 ;  Eoberts  v.  Havelock,  3  B.  &  Ad.  404  ; 
Ritchie  v.  Atkinson,  10  East,  295  ;  Boone  v.  Eyre,  1  H.  BI.  273,  n.  (a) ;  Cutler  v.  Close, 
5  C.  &  P.  337  ;  Lucas  v.  Goodwin,  3  Bing.  N.  C.  737  ;  Mondel  v.  Steel,  8  M.  &  W.  870. 

-  It  was  formerly  held,  that  the  only  remedy  was  by  cross-action.  Morridge  v. 
Jones,  3  Camp.  38 ;  *^Tye  v.  Gwynne,  2  Camp.  346.  But  it  is  now  at  the  election  of  the 
party  to  resort  to  the  cross-action  or  not.  In  Farnsworth  v.  Garrard,  1  Camp.  38, 
Lord  Ellenhorough  laid  down  the  rule,  that  where  tiie  plaintiff  declares  on  a  quantum 
meruit  for  work  and  labor  done  and  materials  found,  the  defendant  may  reduce  the 
damages  by  showing  that  the  work  was  improperly  done,  and  may  entitle  himself  to  a 
verdict  by  showing  that  it  was  wholly  inadequate  to  answer  the  purpose  for  which  it 
was  undertaken.  Sec  also  Mondell  v.  Steel,  8  M.  &  W.  858.  This  whole  subject  was 
ably  considered  by  Dewey,  J.,  in  Harrington  v.  Stratton,  22  Pick.  510,  which  was  an 
action  by  the  payee  against  the  maker  of  a  promissory  note  given  for  the  price  of  a 
chattel ;,  and  it  was  held  competent  for  the  defendant  to  prove  in  reduction  of  damages, 
that  the  sale  was  effected  by  means  of  false  representations  of  the  value  of  the  chattel 
on  the  part  of  the  payee,  although  the  chattel  had  not  been  returned  or  tendered  to  him. 
And  in  delivering  the  opinion  of  the  court,  the  learned  judge  said  :  "  It  is  always  desir- 
able to  prevent  a  cross-action  where  full  and  complete  justice  can  be  done  to  the  par- 
tics  in  a  single  suit,  and  it  is  upon  this  ground  that  the  courts  have  been  disposed  to 
extend  to  the  greatest  length,  compatible  with  the  legal  rights  of  the  parties,  the  prin- 
ciple, allowing  evidence  in  defence  or  in  reduction  of  damages,  to  be  introduced  rather 
than  to  compel  the  defendant  to  resort  to  his  cross-action.  As  it  seems  to  us  the  same 
purpose  will  be  further  advanced,  and  with  no  additional  evils,  by  adopting  a  rule  on 
this  subject  eqjially  broad  in  its  application  to  cases  of  actions  on  promissory  notes, 
between  the  original  parties  to  the  same,  as  to  actions  on  the  original  contract  of  ^le, 
and  holding  that,  in  either  case,  evidence  of  false  representations  as  to  the  quality  or 
character  of  the  article  sold  may  be  given  in  evidence  to  reduce  the  damages,  although 
the  article  has  not  been  returned  to  the  vendor."  And  see  Spalding  v.  Vandercook,  2 
Wend.  431  ;  Coburn  v.  Ware,  30  Maine,  202;  Hammat  v.  Emerson,  27  Maine,  308; 
Perlcy  v.  Balch,  23  Pick.  286 ;  Mixer  v.  Coburn,  1 1  Met.  559 ;  Chapel  v.  Hickcs,  2  C.  &  M. 
214.    But  see  Pulsifer  v.  Hotchkiss,  12  Conn.  234  ;  Scudder  i;.  Andrews,  2  McLean,  464. 

3  Bourne  v.  Mason,  1  Vent.  6,  2  Keb.  457  ;  Crow  v.  Rogers,  1  Str.  592  ;  Bull.  N.  P. 
134  ;  Parke,  B.,  in  Jones  v.  Robinson,  1  Exch.  454  ;  Price  v.  Easton,  4  B.  &  Ad.  433. 

4 


38  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  III. 

rule  has  been  considerably  relaxed,  at  least  in  this  country.  Thus, 
if  A  pays  to  B  a  consideration,  and  B  thereupon  promises  to  pay 
C  a  sum  of  money,  it  has  been  held  that  C  may  sue  B  upon  this 
promise,  whether  the  promise  were  made  to  A  or  to  C.^  So 
where  B  gave  to  the  lessee  of  certain  premises  a  written  promise 
to  take  the  lease  and  pay  to  A,  the  lessor,  the  rent,  with  the  taxes, 
according  to  the  terms  of  the  lease ;  and  B  afterwards  entered 
into  possession  of  the  premises,  and  occupied  them  with  the 
knowledge  of  A,  it  was  held  that  A  might  recover  against  B  on 
this  promise.^  So  if  A,  B,  and  C,  give  a  consideration  jointly  to 
D,  whereupon  D  makes  a  promise  to  A,  or  B,  or  C,  or  any  two 
of  them,  an  action  can  be  maintained  on  the  promise  by  the 
party  to  whom  it  is  given.^ 


SECTION  YII. 

OF   THE   COXSIDEKATIOX   ARISING   FROM    DISCHARGIXG   THE   DEBT   OF 

ANOTHER. 

If  A  is  compelled  to  do  for  B  that  which  B  should  have  done, 
and  was  under  an  obligation  to  do,  himself,  A  can  now  demand 
from  B  full  indemnity  or  compensation ;  and,  to  enable  him  to 
enforce  this  claim,  the  law  will  imply  or  presume  a  request  from 
B  that  A  should  do  this  thing,  and  also  a  promise  from  B  to  A 
of  repayment  or  indemnity,  which  promise  rests  upon  the  suffi- 
cient consideration  of  A's  doing,  or  undertaking  to  do,  that  thing.* 

'  Carnegie  v.  Morrison,  2  Met.  401.  But  wliere  one  person  covenants  witli  another  to 
do  an  act  for  the  benefit  of  a  third,  the  action  must  be  brought  in  the  name  of  the  party 
with  whom  tlie  covenant  is  made.  Hinkley  v.  Fowler,  15  Maine,  285  ;  Johnson  v.  Fos- 
ter, 12  Met.  167;  Saunders  v.  Filley,  12  Pick.  554;  Lord  Southampton  v.  Brown,  6  B. 
&  C.  718  ;  Union  India  Eubber  Co.  v.  Tomlinson,  1  E.  D.  Smith,  364. 

2  See  Brewer  v.  Dyer,  7  Cush.  337. 

3  Cabot  V.  Haskins,  3  Pick.  83.  And  see  also  Farrow  v.  Turner,  2  A.  K.  Marsh. 
496 ;  Crocker  v.  Higgins,  7  Conn.  347  ;  Miller  v.  Drake,  1  Caines,  45.  In  the  recent 
case  of  Mellen  v.  Whipple,  1  Gray,  317,  the  Supreme  Court  of  Massachusetts  mani- 
fested a  strong  inclination  to  adhere  to  the  old  rule  in  all  cases  where  an  exception  had 
not  been  firmly  established  by  previous  decisions.  It  was  accordingly  held  in  that 
case,  that  on  a  promise  made  to  the  vendor  by  the  purchaser  of  an  equity  of  redemption, 
to  assume  and  cancel  the  mortgage  on  the  premises,  with  the  note  for  which  it  was  given, 
no  action  lies  by  the  mortgagee.  And  see  Union  India  Rubber  Co.  v.  Tomlinson,  1  E. 
D.  Smith,  364  ;  Blunt  v.  Boyd,  3  Barb.  209  ;  Bigelow  v.  Davis,  16  Barb.  561. 

*  Pownall  V.  Ferrand,  6  B.  &  C.  439  ;  Exall  v.  Patridge,  8  T.  R.  308.  And  in  Gris- 
sell  V.  Robinson,  3  Bing.  N.  C  10,  the  plaintiffs  having  agreed  with  the  defendant  to 
give  iiim  a  lease  of  certain  premises,  caused  their  attorney  to  prepare  a  lease,  and  paid 
him  for  it,  and  afterwards  brought  tlicir  action  against  the  defendant  to  recover  the 
amount  so  paid,  as  for  money  paid  l)y  them  for  defendant's  use.    And  the  evidence 


en.  III.]  OF   CONSIDERATION.  39 

This  rule  applies  to  all  cases  in  which  a  surety  or  guarantor  pays 
or  does  for  his  principal  that  which  the  principal  undertook  to 
do,  and  the  surety  undertook  that  he  would  do  for  the  principal 
if  the  principal  did  not.  The  law  considers  that  this  request  of 
the  principal  to  the  surety,  and  also  this  promise  of  indemnity, 
belong  necessarily  to  such  a  relation.' 

But  the  rale  is  quite  otherwise  where  A  without  compulsion 
does  for  B  what  B  was  under  an  obligation  to  do  for  himself; 
as  if  A  voluntarily  pays  to  C  a  debt  due  from  B  to  C.  Here  the 
law  will  not  presume  or  imply  both  the  request  and  the  promise. 
If,  therefore,  neither  be  proved,  A  cannot  enforce  repayment  from 
B ;  and  the  reason  is  that  A  cannot,  as  was  before  remarked, 
make  himself  the  creditor  of  B  without  B's  assent.^  And  this 
reason  is  more  than  merely  technical,  for  B  may  have  good 
ground  for  preferring  to  be  the  debtor  of  C,  rather  than  of  A. 
But  if  A  can  prove  either  the  request  or  the  promise,  the  law  will 
conclusively  presume  the  other.  Thus,  if  A  can  prove  that  B 
requested  him  to  pay  his  debt  to  C,  the  law  will  presume  B's 
promise  of  repayment ;  or  if  A  can  prove  that  B  promised  to  A 
a  repayment,  the  law  will  consider  this  as  an  acknowledgment 
and  acceptance  of  the  payment  as  a  service  rendered  to  him,  and 

showing  that  it  was  the  custom  for  the  landlord's  attorney  to  draw  the  lease,  and  for 
the  lessee  to  pay  for  it,  it  was  held  that  the  plaintiffs  were  entitled  to  recover.  And 
Parlce,  J.,  said :  "As  the  plaintiffs  were  liable  to  their  own  attorney,  in  the  first  instance, 
and  all  the  evidence  shows  that,  according  to  the  custom,  the  defendant  is  ultimately 
bound  to  pay  for  the  lease,  he  must  be  taken  to  have  impliedly  assented  to  the  payment 
made  by  the  plaintiffs,  and  the  action  lies  for  money  paid  to  his  use."  See  also  Davies 
V.  Humphreys,  6  M.  &  W.  153  ;  Jefferys  v.  Gurr,  2  B.  &  Ad.  833. 

1  Kemp  V.  Finden,  12  M.  &  W.  421 ;  Fletcher  v.  Grover,  11  N.  H.  36S ;  Johnson  v. 
Johnson,  11  Mass.  359 ;  Horbach  w.  Elder,  18  Penn.  33.  And  see  farther  as  to  this 
subject,  1  Parsons  on  Cont.  32. 

2  Paynter  v.  Williams,  1  Cr.  &  M.  810.  In  this  case  a  pauper,  whose  settlement  was 
in  the  parish  of  A,  resided  in  the  parish  of  B,  and  whilst  there  received  relief  from  the 
parish  of  A,  which  relief  was  afterwards  discontinued,  the  overseers  objecting  to  pay 
any  more  unless  the  pauper  removed  into  his  own  parish.  The  pauper  \vas  subse- 
quently taken  ill  and  attended  by  an  apothecary,  who,  after  attending  him  nine  weeks, 
sent  a  letter  to  the  overseers  of  A,  upon  the  receipt  of  which  they  directed  the  allow- 
ance to  be  renewed,  and  it  was  continued  to  the  time  of  the  pauper's  decease.  It  was 
held,  that  the  overseers  of  A  were  liable  to  pay  so  much  of  the  apothecary's  bill  as  was 
incurred  after  the  letter  was  received.  And  Bayley,  B.,  in  delivering  judgment,  said  : 
"I  am  of  opinion  that  the  parish  is  liable,  and  that  the  plaintiff  can  maintain  the  pres- 
ent action.  The  legal  liability  is  not  alone  suflicient  to  enable  the  party  to  maintain 
the  action,  without  a  retainer  or  adoption  on  the  part  of  the  parish.  The  legal  liability 
of  the  parish  does  not  give  any  one  who  chooses  to  attend  a  pauper,  and  supply  him 
with  medicines,  a  right  to  call  on  them  for  payment.  It  is  their  duty  to  see  that  a 
proper  person  is  employed,  and  they  are  to  have  an  option  who  the  medical  man  shall 
be.  Wing  v.  Mill  does  not  go  the  length  of  saying  that  a  mere  legal  liability  is  enough; 
there  must  be  a  retainer  or  adoption.  In  tliat  case,  the  parish  officers  were  aware  of 
the  attendance  and  sanctioned  it,  because  they  applied  to  him  to  send  in  his  bill." 


40  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  III. 

will  thereupon  presume  a  previous  request  to  A.     And  in  either 
case  A  can  recover  from  B  on  this  promise.^ 

1  Thus,  in  Wing  v.  Mill,  1  B.  &  Aid.  104,  a  pauper  residing:  in  the  parish  of  A  re- 
ceived during  illness  a  weekly  allowance  from  the  parish  of  B,  where  he  was  settled. 
It  was  held,  that  an  apothecary  who  had  attended  the  pauper  might  maintain  an  action 
for  the  amount  of  his  bill  against  the  overseers  of  B,  who  expressly  promised  to  pay 
the  same.  But  without  the  express  promise  il  would  have  been  held  otherwise.  Sec 
Paynter  v.  Williams,  in  the  preceding  note. 


CH.  IV.]        OF  SALES  OF  PERSONAL  PROPERTY.  41 


CHAPTER   IV. 

OF   SALES   OF  FERSONAL   PROPERTY. 

SECTION    I. 

WHAT   COXSTITUTES    A    SALE. 

It  is  important  to  distinguish  carefully  between  a  sale  and  an 
agreement  for  a  future  sale.  This  distinction  is  sometimes  over- 
looked ;  and  hence  the  phrase,  an  executory  contract  of  sale,  has 
come  into  use;  but  it  is  not  quite  accurate.  Every  actual  sale 
is  an  executed  contract,  although  payment  or  delivery  may 
remain  to  be  made.  There  may  be  an  executory  contract  for 
sale,  or  a  bargain  that  a  future  sale  shall  be  made ;  but  such  a 
bargain  is  not  a  present  sale;  nor  does  it  confer  upon  either  party 
the  rights  or  the  obligations  which  grow  out  of  the  contract  of 
sale. 

A  sale  of  goods  is  the  exchange  thereof  for  money.  More  pre- 
cisely, it  is  the  transfer  of  the  property  in  goods  from  a  seller  to  a 
buyer  for  a  price  paid  or  to  be  paid  in  money.^  It  differs  from 
an  exchange  in  law;  for  that  is  the  transfer  of  chattels  for  other 
chattels;  while  a  sale  is  the  transfer  of  chattels  for  that  which  is 
the  representative  of  all  value.^ 

1  Blackstone  defines  a  sale  to  be  "  a  transmutation  of  pi-opcrty  from  one  man  to 
another  in  consideration  of  some  price  or  recompense  in  value."  2  Com.  246.  Chan- 
cellor K(^t  says :  "  A  sale  is  a  contract  for  the  transfer  of  property  from  one  person  to 
another  for  a  valuable  consideration."  2  Com.  46.3.  But  neither  of  these  definitions 
seems  to  give  the  precise  legal  import  of  a  sale,  for  the  former  applies  equally  well  to 
an  exchange  or  barter,  and  the  latter  relates  more  particularly  to  executory  contracts, 
or  mere  agreements  to  sell.  A  sale  is  not  so  much  "  a  contract  for  the  transfer  of  prop- 
erty," as  it  is  tlic  actual  transfer  of  the  r'ujht  to  property,  and  this  right  passes  as  soon 
as  the  parties  have  agreed  to  the  terms  and  conditions  of  the  sale  ;  for  when  the  con- 
tracting parties  clearly  manifest  their  assent  to  a  sale,  the  law  immediately  carries  the 
intention  into  effect,  and  transfers  the  right  of  property  from  one  to  the  other.  Whether 
a  sale  has  been  completed,  is  a  question  of  fact  for  the  jury.  De  Ridder  v.  M'Night,  13 
Johns.  294.     See  also  Thurston  v.  Thornton,  1  Cush.  89. 

-  The  distinction  between  sales  and  exchanges  is  thus  stated  in  3  Salk.  157  :  —  '^  Per- 
muiatio  vicina  est  empitoni,  but  exchanges  were  the  original  and  natural  way  of  com- 

4* 


/ 


42  ELEMENTS   OF  MERCANTILE    LAW.  [CH.   IV. 

To  constitute  a  sale  at  common  law,  all  that  is  necessary  is 
the  agreement  of  competent  parties  that  the  property  in  the  sub- 
ject-matter shall  then  pass  from  the  seller  to  the  buyer  for  a  fixed 
price. 

The  sale  is  made  when  the  agreement  is  made.  The  comple- 
tion of  the  sale  does  not  depend  upon  the  delivery  of  the  goods 
by  the  seller,  nor  upon  the  payment  of  the  price  by  the  buyer. 
By  the  mutual  assent  of  the  parties  to  the  terms  of  the  sale,  the 
.buyer  acquires  at  once  the  property  and  all  the  rights  and  liabili- 
ties of  property  ;  so  that  in  case  of  any  loss  or  depreciation  of  the 
articles  purchased  the  buyer  will  be  the  sufferer,  as  he  will  be  the 
gainer  by  any  increase  in  their  value.' 

It  is  however  a  presumption  of  the  law,  that  the  sale  is  to  be 

merce,  precedent  to  buying,  for  tjiere  was  no  buying  till  money  was  invented.  Now  in 
exchanging  both  parties  are  buyers  and  sellers,  and  both  equally  warrant ;  and  as  this 
is  a  natural  rather  than  a  civil  contract,  so  by  the  ciril  law  upon  a  bare  agreement  to 
exchange,  without  a  delivery  on  both  sides,  neither  of  the  parties  could  have  an  action 
upon  such  agreement,  as  they  may  in  cases  of  selling ;  but  if  there  was  a  delivery  on 
one  side  and  not  of  the  other,  in  such  case  the  deliverer  might  have  an  action  to  recover 
the  thing  which  he  delivered,  but  he  could  have  no  action  to  enforce  the  other  to  deliver 
what  he  agreed  to  deliver  and  which  the  deliverer  was  to  have  in  lieu  of  that  thing 
which  he  delivered  to  the  other."  And  see  Mitchellr.  Gile,  12  N.  H.  390;  Vail  v. 
Strong,  10  Vt.  457 ;  Herring  v.  Marvin,  5  Johns.  393.  The  remedy  upon  a  contract 
of  exchange  is  by  an  action  for  damages  for  not  delivering  the  goods  according  to 
the  contract.  Harrison  v.  Luke,  14  M.  &  "W.  139.  In  this  case  the  plaintiff  and  defend- 
ant agreed  to  barter  goods  for  goods,  and  the  defendant,  having  received  the  plaintiff's 
goods,  omitted  for  nearly  three  years  to  send  goods  in  return,  whereupon  the  plaintiff 
brought  this  action,  and  declared  for  goods  sold  and  delivered.  Held,  that  the  lapse  of 
time  did  not  entitle  the  plaintiff  to  maintain  such  an  action,  but  that  his  remedy  was  by 
action  against  the  defendant  for  not  delivering  the  goods  pursuant  to  the  contract 
between  them.  And  Pollock,  C.  B.,  said :  "  Where  there  is  a  contract  of  barter,  and  one  of 
the  parties  omits  to  send  goods  in  return,  it  cannot  be  contended  that  the  other  may 
bring  an  action  for  goods  sold.  No  mere  lapse  of  time  will  turn  a  contract  of  barter 
into  a  contract  for  goods  sold." 

1  Potter  V.  Coward,  1  Meigs,  22;  Hurlbut  v.  Simpson,  3  Ired.  233  ;  Olyphant  u.  Baker, 
5  Denio,  379;  Bowen  v.  Burk,  13  Penn.  St.  146;  Frazcr  v.  Hilliard,  2  Strobh.  309; 
Wing  V.Clark,  24  Maine,  3CG;  Hooban  t'.  Bidwell,  IC  Ohio,  509;  Willis  r.  Willis,  6 
Dana,  48;  Crawford  v.  Smith,  7  ibid,  60;  Simmons  i'.  Smith,  5  B.  &  C.862;  Dixon  v. 
Yates,  2  Nev.  &  Mann.  202  ;  Gale  v.  Burnell,  7  Q.  B.  850;  Logan  v.  Le  Mesurier,  11 
Jurist,  1091  ;  Bloxam  v.  Sanders,  4  B.  &  C.  948;  Ilinde  v.  Whitehouse,  7  East.  558; 
Com.  Dig.  Agreement,  (B.  3);  Atkin  v.  Barwick,  1  Strange,  167,  where  Furtescue,  J., 
observes:  — "  Property  by  oi(r  law  may  he  devested  without  an  actual  delilfery;  as  a 
horse  in  a  stable."  The  principle  of  the  Roman  civil  law  was  different.  The  property 
{dominium)  did  not  pass  until  delivery,  and  a  perfect  contract  of  sale  had  no  effect  upon 
the  property,  it  being  merely  a  personal  contract  binding  the  vendor,  but  not  the  specific 
goods.  The  common  law  rule  is  well  stated  in  Noys's  Maxims,  p.  88.  "If  I  sell  my 
horse  for  money,  I  may  keep  liim  until  I  am  paid;  but  I  cannot  have  an  action  of 
debt  until  he  is  delivered ;  yet  the  property  of  the  horse  is,  by  (he  bargain,  in  the  bar- 
gainor or  buyer.  But  if  he  do  presently  tender  me  my  money,  and  I  do  refuse  it,  he 
may  take  the  horse  and  have  an  action  of  detainment.  And  if  the  horse  die  in  my 
stable  between  the  bargain  and  the  delivery,  I  may  have  an  action  of  debt  for  my 
money,  because,  by  the  bargain,  the  property  was  in  the  buyer."  '  See  also  Macomber  v. 
Parker,  13  Pick.  183;  Farnum  v.  Perry,  4  Law  Ilej)orter,  27G;  Willis  v.  Willis,  6 
Dana,  48;  Lansing  v.  Turner,  2  Johns.  13;  Tarling  v.  Baxter,  6  B.  &  C.  360. 


en.  IV.]        OF  SALES  OF  PERSONAL  PROPERTY.  43 

immediately  followed  by  payment  and  delivery,  unless  otherwise 
agreed  upon  by  the  parties.  If  therefore  nothing  appears  but  a 
proposal  and  an  acceptance,  and  the  vendee  departs  without  pay- 
ing or  tendering  the  price,  the  vendtr  may.elect  to  consider  it  no 
sale,  and  may,  therefore,  if  the  buyer  comes  at  a  later  period  and 
offers  the  price  and  demands  the  goods,  refuse  to  let  him  have 
them.i  But  a  credit  may  be  agreed  on  expressly,  and  the  seller 
will  be  bound  by  it ;  and  so  he  will  be  if  the  credit  is  inferred  or 
implied  from  usaga  or  from  the  circumstances  of  the  case.  And 
if  there  be  a  delivery  and  acceptance  of  the  goods,  or  a  receipt  by 
the  seller  of  earnest,  or  of  part  payment,  the  legal  inference  is 
that  both  parties  agree  to  hold  themselves  mutually  bound  by  the 
bargain.  Then  the  buyer  has  either  the  credit  agreed  upon,  or 
such  credit  as  from  custom  or  the  nature  or  circumstances  of  the 
case  is  reasonable.  But  neither  delivery,  nor  earnest,  nor  part- 
payment,  are  essential  to  the  completion  of  a  contract  of  sale.^ 
They  prevent  the  seller  from  rescinding  the  contract  without  the 
consent  of  the  purchaser.  Their  effect  upon  sales  under  the  pro- 
visions of  the  Statute  of  Frauds  will  be  considered  in  the  chapter 
on  that  subject. 

SECTION  II. 

OF    THE    RIGHTS    OF    PUOPERTY    AND    OF    POSSESSION. 

The  word  property  is  used  in  law  in  a  strict  and  peculiar 
sense.  It  does  not  mean  the  thing  owned,  but  the  interest  in  the 
thing  or  the  ownership  of  it.  Hence  property,  or  the  right  of 
property  is  often  severed  from  the  right  of  possession.     This  is 

1  This  principle  was  regarded  as  settled  law  so  long  ago  as  the  time  of  the  Year  Books. 
Thus,  in  14  H.  8,  176,  216,  (A.  D.  1523),  in  the  Common  Pleas,  Pollard,  J.,  said: 
"Bargains  and  sales  all  depend  upon  communication  and  words  between  the  parties  ; 
for  all  bargains  can  be  to  take  effect  instantly,  or  upon  a  tiling  to  be  done  tliereafter. 
They  can  be  upon  condition,  and  they  can  also  be  perfect;  and  yet  no  quid  pro  quo  im- 
mediately. And  all  this  depends  upon  the  communication  between  you  and  me ;  as 
that  I  shall  have  .£20  for  my  horse,  and  I  agree ;  now  if  you  do  not  pay  the  money 
immediately,  this  is  not  a  bargain  ;  for  my  agreement  is  for  the  £20,  and  if  you  do  not 
pay  the  money  straightway,  you  do  not  act  according  to  my  agreement.  I  ought,  how- 
ever, in  this  case,  to  wait  convenient  leisure,  to  wit,  until  you  counted  your  money. 
But  if  you  go  to  your  house  for  money,  am  I  obliged  to  wait?  No,  truly;  for  I  would 
be  in  no  certainty  of  my  money  or  of  your  return ;  and  therefore  it  is  no  contract  unless 
this  (delav)  be  agreed  at  the  communication." 

-  Per  Holt,  C.  J.,  in  Langfort  i'.  Tiler,  1  Salk.  il3;  Buller's  N.  P.  50;  Knight  v. 
Hopper,  Skinner,  647;  Hinde  v.  Whiteliouse,  7  East,  571;  Hurlburt  v.  Simpson,  3 
Ircd.  23C. 


44  ,  ELEMENTS   OF  MERCANTILE  LAW.  [CH.   IV. 

sometimes  obvious ;  as  where  the  owner  of  a  horse  lets  him  out 
on  hire  for  a  week;  the  ownership  or  property  of  the  owner  is 
unaffected  by  this,  but  the  hirer  has  for  that  week  the  right  of 
possession.  When  a  sale  is  Completely  made  i\\e  property  in  the 
goods  passes,  as  we  have  seen,  from  the  seller  to  the  buyer ;  that 
is,  the  buyer  becomes  at  once  the  owner  of  the  goods.  But  the 
possession  may  not  pass  to  the  buyer ;  and  the  right  of  possession 
does  not  pass  to  him,  until  he  pays  the  price,  unless  it  be  a  sale 
on  credit.^  If  there  be  no  credit,  the  seller  acquires  at  once  a 
right  to  the  price ;  the  buyer  acquires  at  once  the  right  of  prop- 
erty, and  the  right  to  unite  the  right  of  possession  to  his  right  of 
property  by  paying  or  offering  to  pay  the  price.  The  seller,  on 
the  other  hand,  if  he  desires  to  enforce  payment  of  the  price, 
must  deliver  or  offer  to  deliver  the  goods.  Thus  either  party 
may  compel  the  other  to  a  performance  of  his  part  of  the  agree- 
ment by  first  performing  or  offering  to  perform  his  own.^ 

This  right  of  the  seller  to  retain  possession  of  the  property 
sold  until  the  price  is  paid  is  called  a  lien.  By  this  word  lien, 
which  is  of  frequent  use'  in  the  law,  is  meant  the  right  of  retain- 
ing possession  of  property  until  some  charge  upon  it  or  some 
claim  on  account  of  it,  is  satisfied.  It  rests  therefore  on  posses- 
sion. Hence  the  seller  (and  every  other  who  has  a  lien,)  loses  it 
by  voluntarily  parting  with  the  possession,  or  by  a  delivery  of 
the  goods.^  And  it  is  a  delivery  for  this  purpose,  if  he  delivers  a 
part  without  any  purpose  of  severing  that  part  from  the  remain- 
der;^ or  if  he  make  a  symbolical  delivery  which  vests  this  right 
and  power  of  possession  in  the  buyer,  as  by  the  delivery  of  the 

iThus,  in  Miles  v.  Gorton,  2  Cr.  &  M.  504,  511,  Bayleij,  B.,  said:  "The  general  rule 
of  law  is,  that  where  there  is  a  sale  of  goods,  and  nothing  is  specified  as  to  delivery  or 
payment,  although  every  tiling  may  have  been  done  so  as  to/levest  the  property  out  of 
the  vendor,  and  so  as  to  throw  upon  the  vendee  all  risk  attendant  upon  the  goods,  still 
there  results  to  the  vendor  out  of  the  original  contract  a  right  to  retain  the  goods  until 
payment  of  the  price."     And  see  Parks  v.  Hall,  2  Pick.  212. 

'^  This  is  according  to  the  fifth  rule  laid  down  by  Sergeant  Williams,  in  his  learned 
note  to  Pordage  v.  Cole,  1  Wms.  Saund.  319. 

2  Sumner  v.  Hamlet,  12  Pick.  81  ;  Wilson  v.  Balfour,  2  Campb.  579. 

*  Brewer  v.  Salisljury,  9  Barb.  51 1 ;  Chamberlain  v.  Parr,  23  Vt.  265 ;  Slubey  v.  Hey- 
ward,  2  H.  Bl.  504  ;  Hammond  v.  Anderson,  4  B.  &  P.  69  ;  Elliott  v.  Thomas,  3  M.  & 
W.  170  ;  Scott  V.  Tiie  Eastern  Counties  Bailway  Co.  12  M.  &  W.  33;  Biggs  v.  Wisking, 
25  E.  L.  &  E.  257;  Mills  v.  Hunt,  20  Wend.  431;  Davis  v.  Moore,  13  Maine,  424; 
Boynton  v.  Vcazie,  24  Maine,  286.  A  delivery  of  part,  however,  will  not  devest  the 
vendor  of  his  lien  as  to  the  whole,  if  any  thing  remains  to  be  done  by  the  vendor  to  the 
portion  undelivered.  Simmons  v.  Swift,  5  B.  &  Cress.  857.  And  if  the  vendee  obtain 
possession  by  fraud,  the  vendor  will  lose  none  of  his  rights  by  such  a  delivery.  Earl 
of  Bristol  V.  Wilsmore,  1  B.  &  C.  514;  Hussev  i'.  Thornton,  4  Mass.  405}  Litterel  v. 
St.  John,  4  Blackf.  326. 


en.  IV.]         OF  SALES  OF  PERSONAL  PROPERTY.  45 

key  of  a  warehouse  in  which  they  are  locked  up.^  Whether  the 
delivery  of  an  order  on  the  warehouseman  is  of  itself  delivery, 
before  presentation  to  the  warehouseman,  may  not  be  certain.^ 
We  think  however  that  such  presentation  is  necessary,  and  that 
until  it  is  made  there  is  no  complete  transfer  of  possession.^  If 
the  warehouseman  consented,  and  agreed  to  hold  the  goods  as 
the  buyer's,  there  could  be  no  further  question.  And  we  think 
such  a  presentation  makes  a  delivery  whether  the  warehouseman 
gives  or  withholds  his  consent,  unless  he  had  a  right  to  withhold 
it,  and  exercised  his  right* 

If  the  seller  delivers  the  goods  to  the  buyer,  as  he  thereby  loses 
his  lien,  he  cannot  afterwards,  by  virtue  of  this  lien,  retake  the 
goods  and  hold  them.^  But  if  the  delivery  was  made  with  an 
express  agreement  that  non-payment  of  the  price  should  revest 

• 

'  Wilkes  I'.  Ferris,  5  Johns.  335.  A  delivery  of  the  key,  the  property  being  locked 
up,  is  so  far  a  delivery  of  the  goods,  that  it  will  support  an  action  of  trespass  against  a 
second  purchaser  from  the  original  owner  who,  by  borrowing  the  key  from  the  shop  of 
a  third  person  with  whom  it  was  left,  thus  obtains  possession  of  the  goods.  Chappel 
V.  Marvin,  2  Aikens,  79. 

2  See  Wilkes  v.  Ferris,  5  Johns.  335;  Spear  u.  Travers,  4  Campb.  251 ;  Lucas  v.  Dor- 
rien,  7  Taunt.  278. 

^Bcntall  V.  Burn,  3  B.  &  Cr.  423;  Farina  v.  Home,  16  M.  &  W.  119;  Carters. 
Willard,  19  Pick.  1. 

*  In  Harman  v.  Anderson,  2  Campb.  243,  the  buyer  having  received  a  delivery  order 
from  the  seller,  sent  it  to  the  wharfingers,  in  whose  possession  the  goods  were ;  but 
they  neither  made  any  transfer  in  their  books  to  the  name  of  the  buyer,  nor  did  any 
thing  to  testify  that  they  accepted  the  delivery  order,  or  held  the  goods  on  the  buyer's 
account.  And  Lord  Ellenhorough  said :  "  After  the  note  was  delivered  to  the  wharfin- 
gers, they  were  bound  to  hold  the  goods  on  account  of  the  purchaser.  I'he  delivery 
note  was  sufficient,  without  any  actual  transfer  being  made  in  their  books.  From 
thenceforth  they  became  the  agents  of  Dudley,  the  bankrupt.  They  themselves  might 
have  a  lien  on  the  goods,  and  be  justified  in  detaining  them  till  that  was  satisfied;  but 
as  between  vendor  and  vendee  the  delivery  was  complete."  And  see  Carter  v.  Willard, 
19  Pick.  1  ;  Tuxworth  v.  Moore,  ibid.  347  ;  Tucker  v.  Ruston,  2  C  &  P.  86  ;  Lackin- 
ton  V.  Atherton,  7  M.  &  Gr.  360.  But  latterly  the  English  courts  are  inclined  to  hold 
that  the  delivery  is  not  complete  imtil  the  warehouseman  consents  to  hold  the  property 
on  account  of  the  buyei*.  And  the  rule  holds  equally  even  where  the  warehouseman  is 
bound  to  give  such  consent,  and  will  render  himself  liable  to  an  action  by  refusing. 
Thus,  in  Bentall  v.  Burn,  3  B.  &  Cr.  423,  where  the  property  was  in  the  custody  of  the 
London  Dock  Company,  the  Court  of  King's  Bench  said :  "  It  has  been  said  that  the 
London  Dock  Company  were  bound  by  law,  when  required,  to  hold  the  gopds  on 
account  of  the  vendee.  That  may  be  true,  and  they  might  render  themselves  liable  to 
an  action  for  refusing  so  to  do ;  but  if  they  did  wrongfully  refuse  to  transfer  the  goods 
to  the  vendee,  it  is  clear  that  there  could  not  then  be  any  actual  acceptance  of  them  by 
him  until  he  actually  took  possession  of  them."  This  case  arose  under  the  17th  sec- 
tion of  the  Statute  of  Frauds,  and  the  question  was,  whether  the  vendee  had  "  accepted 
and  actually  received  "  the  goods  purchased  within  the  meaning  of  that  sectioii.  And 
see  Farina  v.  Home,  16  M.  &.  W.  119. 

*  Smith  V.  Lynes,  3  Sandf  Sup.  Ct.  203.  The  court,  in  giving  judgment  in  this 
case,  thus  remark:  "  Where  goods  are  sold,  to  be  paid  for  on  delivery,  either  in  cash 
or  commercial  paper,  and  the  goods  are  delivered  without  exacting  money  or  the 
securities,  such  delivery  is  absolute,  and  a  complete  title  vests  in  the  purchaser,  unless 
the  delivery  was  procured  by  fraud."     See  further,  Carleton  v.  Sumner,  4  Pick.  516  ; 


46  ELEMENTS   OF   MERCANTILE  LAW.  [CH.   IV. 

the  property  in  the  seller,  this  agreement  may  be  valid,  and  the 
seller  can  reclaim  the  goods  from  the  buyer  if  the  price  be  not  paid.' 

If  the  buyer  neglect  or  refuse  to  take  the  goods  and  pay  the 
price  within  a  reasonable  time,  the  seller  may  resell  them  on 
notice  to  the  buyer,  and  look  to  him  for  the  deficiency  by  way  of 
damages  for  the  breach  of  the  contract.^  The  seller,  in  making 
such  resale,  acts  as  agent  or  trustee  for  the  buyer;  and  his  pro- 
ceedings will  be  regulated  and  governed  by  the  rules  usually  ap- 
plicable to  persons  acting  in  those  capacities.^ 

Certain  consequences  flow  from  the  rules  and  principles  already 
stated,  which  should  be  noticed.  Thus,  if  the  party  to  whom 
the  offer  of  sale  is  made,  accepts  the  offer,  but  still  refuses  or  neg- 
lects to  pay  the  price,  and  there  are  no  circumstances  indicating 
a  credit  or  otherwise  justifying  the  refusal  or  neglect,  the  seller 
may  disregard  the  acceptance  of  his  9ffer,  and  consider  the  con- 
tract as  never  made,  or  as  rescinded.  It  would,  however,  be 
proper  and  prudent  on  the  part  of  the  seller,  expressly  to  demand 
payment  of  the  price  before  he  treated  the  sale  as  null ;  and  a 
refusal  or  neglect  would  then  give  him  at  once  a  right  to  hold 
and  treat  the  goods  as  his  own.  So,  too,  if  the  seller  unreason- 
ably neglected  or  refused  to  deliver  the  goods  sold,  and  especially 
if  he  refused  to  deliver  them,  the  buyer  thereby  acquires  the  right 
to  consider  that  no  sale  was  made,  or  that  it  has  been  avoided. 
But  neither  party  is  bound  to  exercise  the  right  thus  acquired  by 
the  refusal  or  neglect  of  the  other ;  but  may  consider  the  sale  as 
complete,  and  may  sue  the  other  for  non-payment,  or  non-delivery. 

As  a  sale  of  goods  necessarily  passes  the  property  in  them  from 
the  seller  to  the  buyer,  only  he  who  has  in  himself  the  property 
in  the  goods  can  make  a  valid  sale  of  them.*     But  a  sale  may  be 

Bowen  v.  Burke,  13  Penn.  146;  Mixer  v.  Cook,  31  Maine,  340  ;  Dresser  Manuf.  Co.  v. 
Watcrson,  3  Mete.  18;  Hennequin  v.  Sands,  25  Wend.  640;  Smith  v.  Dennie,  6  Pick. 
266,  per  Parker,  C.  J. 

'  See  Allen  v.  Ford,  19  Pick.  217.    And  see  preceding  note. 

2  Langfort  v.  Tiler,  1  Salk.  113;  Sands  v.  Taylor,  5  Johns.  395  ;  Crooks  i\  Moore, 
1  Saiidf.  297 ;  Maclean  v.  Dunn,  4  Bing.  722.  But  see  Graves  v.  Ashlin,  3  Campb. 
426  ;  Martindale  v.  Smith,  1  Q.  B.  389. 

^  Thus,  the  seller  must  dispose  of  the  goods,  on  the  resale,  in  good  faith,  and  in  the 
mode  best  calculated  to  produce  their  value.  If  the  usual  mode  of  selling  the  partic- 
ular goods  in  the  market,  be  at  public  auction,  tlie  seller  ought  to  dispose  of  them  in 
that  manner.  If  the  custom  be  to  sell  them  through  a  broker,  it  is  the  seller's  duty  to 
offer  them  in  the  market  through  a  broker's  agency.  Crooks  v.  Moore,  1  Sandf.  297. 
And  see  Sands  v.  Taylor,  5  Jolms.  395. 

*  Stanley  r.  Gaylord,  1  Cush.  536 ;  McMahon  v.  Sloan,  12  Penn.  St.  229:  Everett 
V.  Saltus,  15  Wend.  475;  Covil  v.  Hill,  4  Denio,  323. 


en.  IV.]         OF  SALES  OF  PERSONAL  PROPERTY.  47 

made  by  him  who  has  the  properly  in  the  goods,  but  not  the  pos- 
session; especially  if  they  are  withheld  from  him  by  a  wrong- 
doer. By  such  sale  there  passes  to  the  buyer  not  a  mere  right  to 
sue  the  wrongdoer,  but  the  property  in  the  goods,  with  whatever 
rights  belong  to  them.^ 

If  the  seller  has  merely  the  right  of  possession,  as  if  he  hired 
the  goods,  or  the  possession  only,  or  as  if  he  stole  thern,  or  found 
them,  he  cannot  sell  them  and  give  good  title  to  the  buyer  against 
the  owner;  and  the  owner  may  therefore  recover  them  even  from 
an  honest  purchaser,  who  was  wholly  ignorant  of  the  defect  in 
the  title  of  him  from  whom  he  bought  them.  This  follows  from 
the  rule  above  stated,  that  only  he  who  has  in  himself  a  right  of 
property  can  sell  a  chattel,  because  the  sale  must  transfer  the 
right  of  property  from  the  seller  to  the  buyer.  In  England  a 
sale  in  a  "market  overt,"  passes  the  property  in  a  stolen  chattel 
to  an  honest  purchaser.  In  this  country  we  have  no  markets  overt, 
and  the  only  exception  to  the  above  rule  is  \vhere  money  is  sold 
or  paid  away,  or  negotiable  paper  transferable  by  delivery,  which 
is  considered  as  money.  In  either  case,  he  who  takes  it  in  good 
faith,  and  for  value,  from  a  thief  or  finder,  holds  it  by  good  title.^ 

The  transfer  of  the  right  of  property  in  the  thing  sold  is  so  far 
a  necessary  and  immediate  consequence  of  a  completed  sale,  and 
essential  thereto,  that  where  it  cannot  take  place,  or  by  agree- 
ment does  not  take  place,  there  is  no  sale.  Therefore,  while 
there  may  be  a  delay  agreed  upon  e;xpressly  or  impliedly,  either 
as  to  the  payment  of  the  money  or  the  delivery  of  the  goods,  or 
both,  and  yet  the  sale  be  complete  and  valid,  still,  if  when  there 
is  such  delay,  any  thing  remains  {o  be  done  by  the  seller,  to  or  in 
relation  to  the  goods  sold,  for  their  ascertainment,  identification, 
or  completion,  the  property  in  the  goods  does  not  pass  until  that 
thing  is  done ;  and  there-  is  as  yet  no  completed  sale.  Therefore, 
if  there  be  a  bargain  for  the  sale  of  specific  goods,  but  there 
remains  something  material  which  the  seller  is  to  do  to  them, 
and  they  are  casually  burnt  or  stolen,  the  loss  is  the  seller's,  be- 
cause the  property  had  not  yet  passed  to  the  buyer.^ 


1  Sarah  Ann,  2  Sumner,  211  ;  CartlancI  v.  Morrison,  32  Maine,  190;  Hall  v.  Eobin- 
son,  2  Comst.  293. 

"  Miller  f.  Eace,  1  Burr.  452;  Peacock  v.  Eliodes,  2  Doug.  G33;  Grant  v.  Vaugban, 
3  Burr.  1516 ;  Wheeler  v.  Guild,  20  Pick.  551. 

^Zagurj  V.  Furnell,  2  Camp.  240;  Shepley  v.  Davis,  5  Taunt.  617;  Wallaces. 


48  ELEMENTS   OF  MERCANTILE   LAW.  [CH.   IV. 

So,  if  the  goods  are  a  part  of  a  large  quantity,  they  remain  the 
seller's  until  selected  and  separated  ;  and  even  after  that,  until 
recognized  and  accepted  by  the  buyer,  unless  it  is  plain  from 
words  or  circumstances,  that  the  selection  and  separation  by 
the  buyer  are  intended  to  be  conclusive  upon  both  parties.' 

If  repairing,  or  measuring,  or  counting,  must  be  done  by  the 
seller,  before  the  goods  are  fitted  for  delivery,  or  the  price  can 
be  determined,  or  their  quantity  ascertained,  they  remain,  until 
this  be  done,  the  seller's.  But  if  the  seller  delivers  them  and 
the  buyer  accepts  them,  and  any  of  these  acts  remain  to  be 
done,  these  acts  will  not  be  considered  as  belonging  to  the  con- 
tract of  sale,  for  that  will  be  regarded  as  completed,  and  the  prop- 
erty in  the  goods  will  have  passed  to  the  buyer  with  the  pos- 
session ;  and  these  acts  will  be  taken  only  to  refer  to  the 
adjustment  of  the  final  settlement  as  to  the  price.^ 

Questions  of  this  kind  have  given  rise  to  much  litigation, 
and  caused  some  perplexity.  Whatever  rule  be  adopted  it  may 
be  sometimes  difficult  to  apply  it ;  but  we  cannot  doubt  that  the 
true  principle  is  this :  Every  sale  transfers  the  property,  and  that 
is  not  a  sale  which  does  not  transfer  the  property  in  the  thing 
sold ;  but  this  property  cannot  pass,  and  therefore  the  thing  is  not 
sold,  unless,  first,  it  is  completed  and  wholly  finished  so  as  to  be 
in  fact  and  in  reality  the  thing  purporting  to  be  sold.^  And  in 
the  second  place,  it  must  be  so  distinguished  and  discriminated 

Breeds,  13  East,  522  ;  Busk  v.  Davis,  2  M.  &  S.  397  ;  Gillett  v.  Hill,  2  C  &  M.  535 
Rhode  V.  Thwaites,  6  B.  &  C.  388  ;  Simmons  v.  Swift,  5  B.  &  C.  857 ;  Tarling  v.  Baxter 
6  B.  &  C.  360;  Alexander  v.  Gardner,  1  Bing.  N.  C.  676  ;  Stone  v.  Peacock,  35  Maine 
385  ;  Dixon  v.  Myers,  7  Grattan,  240 ;  Crawford  v.  Smith,  7  Dana,  61  ;  Rapelye  v 
Mackie,  6  Cowen,  250  ;  Outwatcr  v.  Dodge,  7  Cowen,  85  ;  Stevens  v.  Eno,  10  Barb,  95 
Riddle  V.  Varnum,  20  Pick.  280;  Golder  u.  Ogden,  15  Penn.  St.  528;  Lester  y.  Mc 
Dowell,  18  Penn.  St.  91  ;  Messer  v.  Woodman,  2  Foster,  172;  Warren  v.  Buckmins 
ter,  4  Foster,  337. 

1  Dutton  V.  Solomonson,  3  B.  &  P.  582  ;  Fragano  v.  Long,  4  B.  &  Cr.  219  ;  Atkinson 
V.  Bell,  8  B.  &  Cr.  277. 

-  Cushman  v.  Holyoke,  34  Maine,  289;  Macomber  v.  Parker,  13  Pick.  175,  183,  per 
Wilde,  J. ;  Scott  v.  Wells,  6  W.  &  S.  357,  where  Gibson,  C.  J.,  says  :  "  A  sale  is  imper- 
fect, only  where  it  is  left  open  for  the  addition  often  necessary  to  complete  it,  or  where 
it  is  deficient  in  some  indispensable  ingredient  which  cannot  be  supplied  from  an 
extrinsic  source.  But  when  possession  is  delivered  pursuant  to  a  contract  which  con- 
tains no  provision  for  additional  terms,  the  parties  evince,  in  a  way  not  to  be  mistaken, 
that  they  suppose  the  bargain  to  be  consummated."  But  if  it  is  certain  that  the  parties 
intended  that  the  sale  should  be  complete  before  the  article  sold  is  weighed  or  measured, 
■  the  property  may  pass  before  this  is  done,  though  there  be  no  delivery.  Riddle  v. 
Varnum,  20  Pick.  280. 

3  Mucklow  V.  Mangles,  I  Taunt.  318;  Goode  v.  Langley,  7  B.  &  C.  26;  Atkinson  v. 
Bell,  8  B.  &  C.  277  ;  Elliott  v.  Pybus,  4  M.  &  S.  389,  10  Bing.  512  ;  Moody  v.  Brown, 
34  Maine,  109 ;  but  see  Bement  v.  Smith,  15  Wend.  493. 


CH.  IV.]        OF  SALES  OF  PERSONAL  PROPERTY.  49 

from  all  other  things,  that  it  is  certain,  or  can  be  made  certain, 
what  is  the  specific  thing,  the  property  in  which  is  changed  by  the 
sale.'  If  the  transaction  is  deficient  in  either  of  these  two  points, 
it  is  not  a  sale,  although  it  may  be  a  valid  contract  for  a  future 
sale  of  certain  articles  when  they  shall  be  completed,  or  when 
separated  from  others.  And  it  is  to  be  noticed  that  a  contract 
for  a  future  sale,  to  take  place  either  at  a  future  point  of  time,  or 
when  a  certain  event  happens,  does  not,  when  that  time  arrives, 
or  on  the  happening  of  the  event,  become  of  itself  a  sale, 
transferring  the  property.  The  party  to  whom  the  sale  was  to 
be  made  does  not  then  acquire  the  property,  and  cannot  by 
tendering  the  price  acquire  a  right  to  possession ;  but  he  may 
tender  the  price  or  whatever  else  would  be  the  fulfilment  of  his 
obligation,  and  then  sue  the  owner  for  his  breach  of  contract. 
But  the  property  in  the  goods  remains  in  the  original  owner. 

For  the  same  reason  that  the  property  in  the  goods  must  pass  j 
by  a  sale ;  there  can  be  no  actual  sale  of  any  chattel  or  goods  i 
which  have  no  existence  at  the  time.  It  may,  as  we  have  seen, 
be  a  good  contract  for  a  future  sale,  but  it  is  not  a  present  sale.^ 
Thus,  in  contracts  for  the  sale  of  articles  yet  to  be  manufactured, 
the  subject  of  the  contract  not  being  in  existence  when  the  parties 
enter  into  their  engagement,  no  property  passes  until  the  chattel 
is  in  a  finished  state,  and  has  been  specifically  appropriated  to 
the  person  giving  the  order,  and  approved  and  accepted  by  him.^ 

As  there  can  be  no  sale  unless  of  a  specific  thing,  so  there  is 
no  sale  but  for  a  price  which  is  certain,  or  which  is  capable  of 
being  made  certain  by  a  distinct  reference  to  a  certain  standard.^ 

1  See  ante,  p.  48,  n.  (1). 

-  Smith  V.  Atkins,  18  Vt.  461  ;  Brainard  v.  Burton,  5  Vt.  97 ;  Strickland  v.  Turner, 
14  E.  L.  &  E.  471 ;  Parsons  v.  Woodward,  2  N.  J.  196.  In  this  last  case  it  was  held 
tliat  a  contract  to  deliver  at  a  certain  price  a  quantity  of  trees  of  a  specified  kind  to  be 
<^rown  after  the  contract,  is  not  strictly  a  contract  of  sale,,  nor  would  it  be  valid  as  such, 
but  it  is  a  mere  executory  contract;  and  it  does  not  confine  the  vendor  to  deliver  any 
particular  individual  trees,  or  'only  trees  raised  by  himself,  but  a  tender  of  any  trees 
answering  the  description  in  the  contract  will  be  sufficient. 

3  In  Moody  v.  Brown,  34  Maine,  107,  it  was  held  that  neither  the  manufacture  of  an 
article,  pursuant  to  the  order  of  a  customer,  nor  the  tender  of  the  article  when  so  man- 
ufactured, nor  leaving  it  with  the  customer  against  his  will,  will  transfer  the  title.  To 
pass  the  title  there  must  be  an  acrcptance,  by  the  customer,  express  or  implied.  And 
Shepley,  C.  J.,  said,  "  To  effect  a  change  in  the  property  there  must  be  an  assent  of  both 
parties.  It  is  admitted  that  the  mere  order  given  for  the  manufacture  of  the  article 
does  not  affect  the  title.  It  will  continue  to  be  the  property  of  the  manufacturer  until 
completed  and  tendered.  There  is  no  assent  of  the  other  party  to  a  change  of  the  title 
exhibited  by  a  tender  and  refusal.  There  must  be  proof  of  an  acceptance  or  of  acts  or 
words  respecting  it,  from  which  an  acceptance  may  be  inferred,  to  pass  the  property." 

*  Brown  v.  Bellows.  4  Pick.  179,  189.    But  under  some  circumstances  a  cTontract  of 

5.  • 


50  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IV. 


SECTION  III. 


OF   DELIVERY   AND   ITS   INCIDENTS. 


What  is  a  sufficient  delivery  is  sometimes  a  question  of  diffi- 
culty. In  general,  it  is  sufficient,  if  the  goods  are  placed  in  the 
buyer's  hands  or  his  actual  possession,  or  if  that  is  done  which  is 
the  equivalent  of  this  transfer  of  possession.  Some  modes  and 
instances  of  delivery  we  have  already  seen.  We  add,  that  if  the 
goods  are  landed  on  a  wharf  alongside  of  the  ship  which  brings 
them,  with  notice  to  the  buyer  or  knowledge  on  his  part,  this 
may  be  a  sufficient  delivery,  if  usage,  or  the  obvious  nature  of 
the  case  make  it  equivalent  to  actually  giving  possession.  And 
usage  is  of  the  utmost  importance  in  determining  questions  of 
this  kind. 

In  general,  the  rule  may  be  said  to  be,  that  that  is  a  sufficient 
delivery  which  puts  the  goods  within  the  actual  reach  or  power 
of  the  buyer,  with  immediate  notice  to  him,  so  that  there  is 
nothing  to  prevent  him  from  taking  actual  possession. 

When  from  the  nature  or  situation  of  the  goods,  an  actual 
delivery  is  difficult  or  impossible,  as  in  case  of  a  quantity  of  tim- 
ber floating  in  a  boom,  slight  acts  are  sufficient  to  constitute  a 
delivery .1  So  if  the  property  which  is  the  subject  of 'the  sale  is 
at  sea,  the  indorsement  and  delivery  of  the  bill  of  lading,  or 
other  muniment  of  title,  is  sufficient  to  constitute  a  delivery.^ 

sale  may  be  complete  and  binding,  though  silent  as  to  the  price,  such  silence  being 
equivalent  to  a  stipulation  for  a  reasonable  price.  Valpy  r.  Gibson,  4  C.  B.  837,  864. 
In  this  case  Wilde,  C.  J.,  said,  "  Goods  may  be  sold,  and  frequentlj^  are  sold,  when  it 
is  the  intention  of  the  parties  to  bind  themselves  by  a  contract  wliicli  docs  not  specify 
the  price  or  the  mode  of  payment,  leaving  them  to  be  settled  by  some  future  agree- 
ment, or  to  be  determined  by  what  is  reasonable  under  the  circumstances.  And  sec 
Aeebal  v.  Levy,  10  Bing.  376;  Hoadly  i'.  M'Laine,  id.  482;  Dickson  z;.  Jordan,  12 
Ired.  79. 

1  Jewett  V.  Warren,  12  Mass.  300;  Boynton  v.  Veazie,  24  Maine,  286;  Gibson  v. 
Stevens,  8  How.  384  ;  Calkins  v.  Lockwood,  17  Conn.  154. 

-  Gardner  v.  Howland,  2  Pick.  599 ;  Pratt  v.  Parkman,  24  id.  42  ;  Dows  v.  Cobb,  12 
Barb.  310;  Brinley  u.  Spring,  7  Greenl.  241  ;  Richardson  v.  Kimball,  28  Maine,  463. 
The  sale  of  ships  and  merchandise  at  sea  is  governed  by  more  liberal  rules  than  the 
sale  of  goods  and  chattels  on  shore.  By  the  indorsement  and  delivery  of  the  bill  of 
lading,  which  is  the  documentary  evidence  of  title  to  the  merchandise,  the  property 
instantly  vests  in  the  vendee,  and  he  can  transfer  it  to  a  second  purchaser  by  another 
indorsement  and  delivery.  Lickbarrow  v.  Mason,  2  T.  R.  63,  6  East,  21,  note,  1  Smith's 
Lead.  Cas.  388,  which  gives  an  excellent  summary  of  the  law  relating  to  bills  of  lading. 
See  further,  Walter  v.  Ross,  2  Wash.  C.  C.  283  ;  Ryberg  v.  Suell,  id.  403. 


en.  IV.]        OF  SALES  OF  PERSONAL  PROPERTY.  51 

And  in  such  case  the  seller  should  send  or  deliver  the  bill  of 
lading  to  the  buyer  within  a  reasonable  time,  that  he  may  have 
the  means  of  offering  the  goods  in  the  market.  And  it  has  been 
held  that  a  refusal  of  the  bill  of  lading,  authorized  the  buyer  to 
rescind  the  sale.^ 

Until  delivery  the  seller  is  bound  to  keep  the  goods  with  ordi- 
nary care,  and  is  liable  for  any  loss  or  injury  arising  from  the 
want  of  such  care  or  of  good  faith.^ 

If  the  buyer  lives  at  a  distance  from  the  seller,  the  seller  must 
send  the  goods  in  the  manner  indicated  by  the  buyer.  If  no 
directions  are  given,  he  must  send  them  as  usage,  or  in  the 
absence  of  usage,  as  reasonable  care  would  require.  And 
generally  all  customary  and  proper  precautions  should  be  taken 
to  prevent  loss  or  injury  in  the  transit.^  If  these  are  taken,  the 
goods  are  sent  at  the  risk  of  the  buyer,  and  the  seller  is  not 
responsible  for  any  loss.  But  he  is  responsible  for  any  loss  or 
injury  happening  through  the  want  of  such  care  or  precaution. 
And  if  he  sends  them  by  his  own  servant,  or  carries  them  him- 
self, they  are  in  his  custody,  and  generally,  at  his  risk,  until 
delivery. 

This  question  of  delivery  has  a  very  great  importance  in 
another  point  of  view ;  and  that  is,  as  it  bears  upon  the  honesty, 
and  therefore  the  validity,  of  the  transaction.  As  the  owner  of 
goods  ought  to  have  them  in  his  possession,  and  as  a  transfer  of 
possession  usually  does  and  always  should  accompany  a  sale, 
the  want  of  this  transfer  is  an  indication,  more  or  less  strong, 
that  the  sale  is  not  a  real  one,  but  a  mere  cover.  The  law  on 
this  subject  has  fluctuated  considerably;  and  is  different  in  differ- 


1  Barber  v.  Taylor,  5  M.  &  W.  533. 

"  ^t  if  the  seller  exercises  ordinary  diligencfe  in  keeping  the  commodity,  he  is  not 
liablWor  its  loss  or  depreciation,  nnless  it  arises  from  a  defect  against  whicli  he  has 
warranted.  Thus,  in  Lansing  v.  Turner,  2  Johns.  13,  A  sold  to  B  a  certain  quantity 
of  beef,  B  paying  the  purchase-money  in  full ;  and  it  was  agreed  between  them  that 
the  beef  should  remain  in  the  custody  of  A  until  it  should  be  sent  to  another  place. 
Sometime  after,  B  received  a  part,  which  proved  to  be  bad,  and  the  whole  was  found, 
on  inspection,  to  be  unmerchantable:  Held,  that  as  the  beef  was  good  at  the  time  of  its 
sale,  the  vendee  must  bear  the  loss  of  its  subsequent  deterioration.  See  Black  v. 
Webb,  20  Ohio,  304. 

3  Buckman  v.  Levi,  3  Camp.  414;  Clark  v.  Ilutchins,  14  East,  475.  If  the  goods 
are  sent  by  ship  or  otherwise,  it  is  a  part  of  the  sellers  duty  to  give  such  notice  of  the 
sending  as  will  enable  the  buyer  to  insure  or  take  other  precautions.  Cothay  v.  Tutc, 
3  Camp.  129  ;  2  Kent's  Com.  500.  And  if  it  has  been  a  former  custom  with  the  parties 
for  the  vendor  to  insure,  he  is  bound  to  make  insurance  of  the  articles  sent.  Lond. 
Law  Mag.  vol.  4,  p.  359  ;  Smith  v.  Lascelles,  2  T.  R.  189. 


52  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IV. 

ent  parts  of  the  country.  Generally,  and  as  the  prevailing  rule, 
it  may  be  stated  thus :  Delivery  is  nowhere  essential  to  a  sale  at 
common  law  ;  but  if  there  is  no  delivery,  and  a  third  party,  with- 
out knowledge  of  the  previous  sale,  purchases  the  same  thing 
from  the  seller,  he  gains  an  equally  valid  title  as  the  first  buyer ; 
and  if  he  completes  this  title  by  acquiring  the  possession  before 
the  other,  he  can  hold  the  property  against  the  other.i  So,  also, 
unless  delivery  or  possession  accompany  the  transfer  of  the  right 
of  property,  the  things  sold  are  subject  to  attachment  by  the 
creditors  of  the  seller .^  And  if  the  sale  be  completed,  and  never- 
theless no  change  of  possession  takes  place,  and  there  is  no 
certain  and  adequate  cause  or  justification  of  the  want  or  delay 
of  this  change  of  possession,  the  transaction. will  be  regarded  as 
fraudulent  and  void  in  favor  of  a  third  party,  who,  either  by  pur- 
chase or  by  attachment,  acquires  the  property  in  good  faith,  and 
without  a  knowledge  of  the  former  sale.  In  this  country  the 
rules  of  law  on  this  point  are  hardly  so  strict  as  in  England ;  and, 
generally,  fraud  would  not  be  absolutely  inferred  from  the  want 
of  change  of  possession.  But  this  circumstance  might  be  ex- 
plained, and  if  shown  to  be  perfectly  consistent  with  honesty,  and 
to  have  occurred  for  good  reasons,  and  especially  if  the  delay  in 
taking  possession  was  brief,  the  title  of  the  first  buyer  would  be 
respected.^ 

If  goods  are  sold  in  a  shop  or  store,  separated,  and  weighed  or 
numbered  if  that  be  necessary,  and  put  into  a  parcel,  or  otherwise 
made  ready  for  delivery  to  the  buyer,  in  his  presence,  and  he 
request  the  seller  to  keep  the  goods  for  a  time  for  him,  this  is  so 
far  a  delivery  as  to  vest  the  property  in  the  goods  in  the  buyer, 
and  the  seller  becomes  the  bailee  of  the  buyer.  And  if  the  goods 
are  lost  while  thus  in  the  keeping  of  the  seller,  without  his  fault, 
it  is  the  loss  of  the  buyer.  ^ 

In  a  contract  of  sale  there  is  sometimes  a  clause  provraing 
that  a  mistake  in  description,  or  a  deficiency  in  quality  or  quan- 
tity, shall  not  avoid  the  sale,  but  only  give  the  buyer  a  right  to 

1  Lanfear  v.  Sumner,  17  Mass.  110;  Babl)  v.  Clcmson,  10  S.  &  R.  419;  Fletcher  v. 
Howard,  2  Aik.  115  ;  Hoofsmith  v.  Cope,  6  Wharton.  5.3 ;  Dawes  v.  Cope,  4  Binn.  258 ; 
Carter  v.  WiHard,  19  Pick.  1. 

^  See  cases  supra. 

^  Tlierc  is  a  great  diversity  of  opinion  upon  this  subject,  but  tlic  weight  of  authority, 
botli  here  and  in  England,  seems  to  sustain  the  doctrine  stated  in  the  text.  The  ques- 
tion is  ably  discussed  in  2  Kent's  Com.  515,  and  in  1  Smith's  Lead.  Cas.  1.  The  prin- 
cipal authorities  arc  fully  cited  in  1  Parsons  on  Contracts,  pp.441  and  442,  and  notes. 


en.  IV.]         OF  SALES  OF  PERSONAL  PROPERTY.  53 

deduction  or  compensation.  But  if  the  mistake  or  defect  be 
great  and  substantial,  and  affects  materially  the  availability  of  the 
thing  for  the  purpose  for  which  it  was  bought,  the  sale  is  never- 
theless void,  for  the  thing  sold  is  not  that  which  was  to  have 
been  sold.^ 

If  the  buyer  knowingly  receives  goods  so  deficient  or  so  differ- 
ent from  what  they  should  have  been  that  he  might  have  refused 
them,  he  will  be  held  to  have  waived  the  objection,  and  to  be  liable 
for  the  whole  price  ;  unless  he  can  show  a  good  reason  for  not  re- 
turning them,  as  in  the  case  of  materials  innocently  used  before 
discovery  of  the  defects  or  the  like.^  In  that  case,  when  the  price 
is  demanded,  he  may  set  off  whatever  damages  he  has  sustained 
by  the  seller's  breach  of  contract,  and  the  seller  shall  recover  only 
the  value  to  the  buyer  of  the  goods  sold  even  if  that  be  nothing.^ 
But  a  long  delay  or  silence  may  imply  a  waiver  of  such  right  on 
the  part  of  the  buyer. 

One  who  orders  many  things  at  one  time  and  by  one  bargain^ 
may,  generally,  refuse  to  receive  a  part  without  the  rest  ;*  but  if 
he  accepts  any  part,  he  severs  that  part  from  the  rest,  and  rebuts 
the  presumption  that  it  was  an  entire  contract;  the  buyer  will 
then  be  held  as  having  given  a  separate  order  for  each  thing,  or 
part,  and  as  therefore  bound  to  receive  such  other  parts  as  are 
tendered,  unless  some  distinct  reason  for  refusal  attaches  to  them.^ 
The  law  is  not  perhaps  quite  settled  on  this  point,  especially  if 
many  several  things  are  bought  at  one  auction,  but  by  different 
bids.6 


1  Flight  V.  Booth,  1  Bing.  N.  C.  370;  Dake  of  Norfolk  v.  Worthy,  1  Carapb.  340; 
Leach  v.  MuUett,  3  C.  &  P.  115  ;  Robinsou  v.  Musgrove,  2  M.  &  Rob.  92,  8  C.  &  P. 
469. 

-  As  in  Milncri'.  Tucker,  1  C.  &P.  15,  where  a  pei'son  contracted  to  supply  a  chande- 
lier, sufficient  to  light  a  certain  room,  and  the  purchaser  kept  the  article  six  months,  and 
then  returned  it;  it  was  held  that  he  was  liable  for  the  price  of  the  chandelier,  although 
it  was  not  according  to  the  contract.  See  also  Cash  v.  Giles,  3  ib.  407  ;  Elliott  v. 
Thomas,  3  M.  &  W.  177  ;  Jordan  v.  Norton,  4  id.  155  ;  Percival  v.  Blake,  2  C.  &  P. 
514.  In  this  case,  keeping  property  two  months  was  held  to  be  an  acceptance  aad  the 
purchaser  was  bound  to  pay  the  price.  See  Okell  v.  Smith,  1  Starkie,  107  ;  Groning 
r.  Mendham,  id.  257  ;  Hopkins  i'.  Appleby,  id.  477  ;  Goodiiue  i\  Butman,  8  Greenl.  116 ; 
Kellogg  V.  Denslow,  14  Conn.  411 ;  Poulton  r.  Lattimore,  9  B.  &  C.  259. 

3  Waring  v.  Mason,  18  Wend.  425;  Basten  v.  Butter,  7  East,  480;  Farnsworth  v. 
Garrard,  1  Camp.  38 ;  Chappel  v.  Hicks,  4  Tyrw.  43,  2  C.  &  M.  214  ;  Cousins  v.  Pad- 
don,  4  Uowl.  488. 

*  Champion  v.  Short,  1  Campb.  53;  Svmonds  v.  Carr,  id.  361 ;  Baldey  v.  Parker,  2 
B.  &  C.  37. 

^  Bowker  r.  Hoyt,  18  Pick.  555;  Miner  v.  Bradley,  22  Pick.  457. 

6  In  the  case  of  Roots  v.  Lord  Dormer,  4  B.  &  Ad.  77,  it  is  expressly  decided  that, 
where  several  lots  are  knocked  down  to  a  bidder  at  an  auction,  and  his  name  marked 

5* 


54  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IV. 

Probably,  the  question  whether  it  is  one  contract,  so  that  the 
buyer  shall  not  be  bound  to  receive  any  part  unless  the  whole  be 
tendered  to  him,  would  be  determined  by  an  inference  from  all 
the  facts,  as  to  whether  the  parts  so  belong  together,  that  it  may 
reasonably  be  supposed  that  none  would  have  been  purchased 
if  any  part  could  not  have  been. 

The  buyer  may  have,  by  the  terms  of  the  bargain,  the  right  of 
redelivery.  For  sales  are  sometimes  made,  and  it  is  agreed  that 
the  purchaser  may  return  the  goods  within  a  fixed,  or  within  a 
reasonable  time.  He  may  have  this  right  without  any  condition, 
and  then  has  only  to  exercise  it  at  his  discretion.  But  he  may 
have  the  right  to  return  the  thing  bought,  only  if  it  turns  out  to 
have,  or  not  to  have,  certain  qualities;  or  only  upon  the  happen- 
ing of  a  certain  event.  In  such  case  the  burden  of  proof  is  on  him 
to  show  that  the  circumstances  exist  which  are  necessary  to  give 
him  this  right.  In  either  case  the  property  vests  in  the  buyer  at 
once,  as  in  ordinary  sales ;  but  subject  to  the  right  of  return  given 
him  by  the  agreement.  If  he  does  not  exercise  his  right  within 
the  agreed  time,  or  within  a  reasonable  time  if  none  be  agreed 
upon,  the  right  is  wholly  lost,  the  sale  becomes  absolute,  and  the 
price  of  the  goods  may  be  recovered  in  an  action  for  goods  sold 
and  delivered.^ 


SECTION  IV. 

OF   CONTKACTS   VOID   FOR   ILLEGALITY   OR   FRAUD. 

As  the  law  will  not  compel  or  require  any  one  to  do  that 
which  it  forbids  him  to  do,  no  contract  can  be  enforced  at  law 
which  is  tainted  with  illegality.  It  may,  however,  be  necessary  to 
consider  whether  the  contract  be  entire  or  separable,  and  whether 
it  is^  wholly  or  partially  illegal.  If  the  whole  consideration,  or 
any  part  of  the  consideration,  be  illegal,  the  promise  founded 

against  them  in  the  catalogue,  a  distinct  contract  arises  for  each  lot.  See  also  Messer 
V.  Woodman,  2  Foster,  176;  Van  Eps  v.  Corporation  of  Schenectady,  12  Johns.  436; 
James  v.  Shore,  1  Starkie,  426 ;  Emmerson  v.  Hcelis,  2  Taunt.  38.  But  see  contra, 
Chambers  v.  Griffiths,  1  Esp.  150;  Coffman  v.  Hampton,  2  W.  &  S.  377  ;  Tompkins 
V.  Haas,  2  Barr,  74. 

1  Moss  V.  Sweet,  3  E.  L.  &  E.  31 1  ;  Beverly  i-.  The  Lincoln  Gas  Light  and  Coke  Co. 
6  Ad.  &E1.  829;  Bayley  v.  Gouldsmith,  Pcakc,  56  ;  Neate  v.  Ball,  2  East,  116  ;  Dear- 
born V.  Turner,  16  Maine,  17 ;  Johnson  v.  McLanc,  7  Blackf.  501. 


CH.  IV.]        OF  SALES  OF  PERSONAL  PROPERTY.  55 

upon  it  is  void.  If  a  whole  promise,  oi-  any  part  of  a  promise 
that  cannot  be  severed  into  substantial  and  independent  parts,  is 
illegal,  the  whole  promise  is  void.  But  if  the  consideration  is 
legal,  and  the  promise  is  legal  in  part  and  illegal  in  part,  and  that 
part  of  the  promise  which  is  legal  can  be  severed  from  that  part 
which  is  illegal,  and  there  be  a  substantial  promise  having  a  value 
of  its  own,  this  legal  part  can  be  enforced.'  For  further  remarks 
upon  this  subject,  however,  we  refer  to  the  previous  chapter  on 
consideration. 

Formerly,  an  agreement  to  sell  at  a  future  day  goods  which 
the  promisor  had  not  now,  and  had  not  contracted  to  buy,  and 
had  no  notice  or  expectation  of  receiving  by  consignment,  was 
considered  open  to  the  objection  that  it  was  merely  a  wager,  and 
therefore  void.^  But  later  cases  have  admitted  it  to  be  a  valid 
contract.^ 

"We  have  already  said,  in  our  second  chapter,  that  fraud  vitiates 
and  avoids  every  contract  and  every  transaction.  Hence,  a 
wilfully  false  representation  by  which  a  sale  is  affected  ;  *  or  a 
purchase  of  goods  with  the  design  of  not  paying  for  them;^  or 

1  Sec  2  Parsons  on  Con.  252,  note,  where  the  leading  authorities  for  this  well-settled 
principle  arc  collected. 

-  This  was  the  opinion  of  Loi'd  Tcntcrdcn.     Sec  Bryan  v.  Lewis,  Ey.  &  M.  386 
Lorymer  v.  Smith,  1  B.  &  C.  1. 

"  "See  Hihblewhite  v.  McMorinc,  5  M.  &  W.  462.  In  this  case  Farl-e,  B.,  in  deliver- 
ing the  judgment  of  the  court,  said,  "  I  have  always  entertained  considei*able  doubt  and 
suspicion  as  to  the  correctness  of  Lord  Tenterdeii's  doctrine  in  Bryan  v.  Lewis ;  it 
excited  a  good  deal  of  surprise  in  my  piiud  at  the  time ;  and  when  examined,  I  think  it 
is  untenable.  I  cannot  see  what  principle  of  law  is  at  all  affected  by  a  man's  being 
allowed  to  contract  for  the  sale  of  goods,  of  which  he  has  not  possession  at  the  time  of 
the  bargain,  and  has  no  reasonable  expectation  of  receiving.  Such  a  contract  does  not 
amount  to  a  wager,  inasmuch  as  both  the  contracting  parties  are  not  cognizant  of  the 
fact  that  the  goods  are  not  in  the  vendor's  possession  ;  and  even  if  it  were  a  wager,  it 
is  not  illegal,  because  it  has  no  tendency  to  injure  third  parties.  The  dictum  of  Lord 
Tenterdm  certainly  was  not  a  hasty  observation  thrown  out  by  him,  because  it  appears 
from  the  case  of  Lorymer  v.  Smith,  that  he  had  entertained  and  expressed  similar 
notions  four  yeai's  before.  He  did  not,  indeed,  in  that  case,  say  that  such  a  contract 
was  void,  but  only  that  it  was  of  a  kind  not  to  be  encouraged ;  and  the  strong  opinion 
he  afterwards  expressed  appears  to  have  gradually  formed  in  his  mind  during  the 
interval,  and  was  no  doubt  confirmed  by  the  cflects  of  the  unfortunate  mercantile 
speculations  throughout  the  country  about  that  time.  There  is  no  indication  in  any  of 
the  books  of  such  a  doctrine  having  ever  been  promulgated  from  the  bench,  until  the 
case  of  Lorymer  v.  Smith,  in  the  year  1822,  and  there  is  no  case  which  has  been  since 
decided  on  that  authority.  Not  only,  then,  Avas  the  doubt  expressed  by  Bosanquet,  J., 
in  Wells  v.  Porter,  well  founded,  but  the  doctrine  is  clearly  contrary  to  law."  And 
see  AVells  v.  Porter,  2  Bing.  N.  C.  722  ;  Stanton  v.  Small,  3  Sandf.  230. 

*  Frost  V.  Lowry,  15  Ohio,  200  ;  Cross  v.  Peters,  1  Greenl.  376  ;  Herrick  v.  Kingsley, 
3  Fairf.  278.  If  the  vendor  make  such  material  misrepresentations  of  matters  of  fact,  as 
essentially  affect  the  interests  of  the  other  party,  who  is  thereby  deceived,  the  sale  may 
be  repudiated.  Doggett  v.  Emerson,  3  Story'  700,  733  ;  Daniel  v.  Mitchell,  1  Story 
172;  Hammatt  v.  Emerson,  27  Maine,  308. 

^  See  2  Parsons  on  Con.  269,  270. 


56  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IV. 

hindering  others  from  bidding  at  auction  by  wrongful  means;  or 
selling  "with  all  faults"  and  then  purposely  concealing  and 
disguising  them  ;i  and  any  similar  act  will  avoid  a  sale.  No  title 
passes  to  the  buyer  by  such  sale,  which  he  can  himself  maintain, 
even  if  there  be  a  delivery  to  him.  But,  by  an  exception-  to  the 
general  rule  that  he  who  has  no  title  can  give  none,  if  such 
fraudulent  buyer  sells  to  a  third  party  who  is  wholly  without 
participation  in  or  knowledge  of  the  fraud,  such  innocent  buyer 
may  acquire  a  good  title,'- 

A  buyer  who  is  imposed  upon  by  a  fraud,  and  therefore  has  a 
right  to  annul  the  sale,  must  exercise  this  right  as  soon  as  may 
be  after  discovering  the  fraud.  He  does  not  lose  the  right  neces- 
sarily by  any  delay,  but  certainly  does  by  any  unexcused  delay.^ 

A  seller  may  rescind  and  annul  a  sale  if  he  were  induced  to 
make  it  by  fraud.  But  he  may  waive  the  right  and  sue  for  the 
price.  If,  however,  the  fraudulent  buyer  gets  the  goods  on  a 
credit,  and  the  seller  sues  for  the  price,  this  suit  is  a  confirmation 
of  the  whole  sale  including  the  credit,  or  rather  it  is  an  entire 
waiver  of  his  right  to  annul  the  sale,  and  the  suit  cannot  be 
maintained  until  the  credit  has  wholly  expired.* 

If  a  party  who  has  been  defrauded  by  any  contract,  brings  an 
action  to  enforce  it,  this  is  a  waiver  of  his  right  to  rescind,  and  a 
confirmation  of  the  contract.^  Or  if  with  knowledge  of  the 
fraud,  he  offers  to  perform  the  contract  on  conditions  which  he 
had  no  right  to  exact,  this  has  been  held  so  effectual  a  waiver  of 
the  fraud  that  he  cannot  set  it  up  in  defence  if  sued  on  the 
contract.^ 

1  Baglehole  v.  Walters,  3  Cainpb.  154. 

2  Load  V.  Green,  15  M.  &  W.  216;  White  v.  Garden,  10  C.  B.  919;  Powell  v.  Hoy- 
land,  6  Exch.  67;  Stevenson  v.  Newnham,  16  E.  L.  &  E.  401  ;  Hoffman  v.  Noble, 
6  Met.  68. 

3  See  Masson  v.  Bovet,  1  Denio,  69 ;  Selway  v.  Fogg,  5  M.  &  W.  83  ;  Saratoga  R.  R. 
r.  Row,  24  Wend.  74. 

*  Ferguson  v.  Carrington,  9  B.  &  Cr.  59. 

^  Ferguson  v.  Carrington,  9  B.  &  Cr.  59 ;  Kimball  v.  Cunningham,  4  Mass.  502. 

«  Blydenburg  y.  Welsh,  Baldwin,  331. 


en.  IV.]  OF   SALES   OF   PERSONAL  PROPERTY.  57 


SECTION   V, 
OF    SALES    WITH   WAURAXTY. 

A  sale  maybe  with  warranty;  and  this  may  be  general,  or 
particular  and  limited.  A  general  warranty  does  not  extend  to 
defects  which  are  known  to  the  purchaser;  or  which  are  open  to 
inspection  and  observation,  unless  the  purchaser  is  at  the  time 
unable  to  discover  them  readily,  and  relies  rather  upon  the  knowl- 
edge and  warranty  of  the  seller.^  A  warranty  may  also  be  either 
express  or  implied.  It  is  7iot  implied  by  the  law  generally  merely 
from  a  full,  or  as  it  is  said,  a  sound  price.  The  rule,  caveat  emp- 
tor, prevents  this.^  But  the  usage  of  the  trade  will  be  considered, 
and  if  that  require  a  declaration  of  certain  defects  whenever  they 
exist,  the  absence  of  such  declaration  is  a  warranty  against  such 
defects.^  Mere  declarations  of  opinion  are  not  a  warranty  ;  *  but 
if  they  are  intended  to  deceive  and  have  that  effect,  they  may 
avoid  the  sale  for  fraud.'^  And  affirmations  of  quantity  or  qual- 
ity, which  are  made  pending  the  negotiations  for  sale,  with  a 
view  to  procure  a  sale,  and  having  that  effect,  will  be  regarded 
as  a  warranty.'^     Goods  sold  by  sample  are  warranted  to  conform 

1  See  1  Parsons  on  Cont.  459,  n.  (i). 

2  Mixer  V.  Coburn,  11  Met.  559;  Wiiisor  v.  Lombard,  18  Pick.  59;  Parkinson  v. 
Lee,  2  East,  321 ;  Stuart  v.  Wilkins,  Dougl.  20 ;  Johnston  v.  Cope,  3  H.  &  Johns.  89 ; 
Seixas  i\  Woods,  2  Caines,  48 ;  Holden  v.  Dakin,  4  Johns.  421  ;  Moses  v.  Mead,  1 
Denio,  378.  But  in  Louisiana,  where  the  civil  law  prevails,  and  in  South  Carolina,  it 
is  held  that  the  sale  of  a  chattel  for  a  sound  price  creates  a  warranty  against  all  faults 
known  or  unknown  to  the  seller.  Tinirod  v.  Shoolbred,  1  Bay,  324 ;  State  v.  Gaillard, 
2  id.  19  ;  Dewces  v.  Morgan,  1  Martin,  1 ;  Melanr-on  v.  Robichaux,  17  Louis.  97  ;  Bar- 
nard V.  Yates,  1  N.  &  McC.  142 ;  Missroon  v.  Waldo,  2  id.  76. 

2  See  Jones  v.  Bowden,  4  Taunt.  847. 

■•  Thus,  in  Arnott  v.  Hughes,  Chitty  on  Con.  393,  n.,  an  action  was  brought  on  a 
warranty  that  certain  goods  were  fit  for  the  China  market.  The  plaintiff  produced  a 
letter  from  the  defendant,  saying  that  he  had  goods  fit  for  the  China  market,  which  he 
offered  to  sell  clicap.  Lord  Ellenhoroitgh  held  that  such  a  letter  was  not  a  warranty,  but 
merely  an  invitation  to  trade,  it  not  having  any  specific  reference  to  the  goods  actually 
bought  by  the  plaintiff.     And  see  1  Parsons  on  Cont.  463,  n.  (o). 

5  j\Iatthews  v.  Bliss,  22  Pick.  48 ;  Doggett  v.  Emerson,  3  Story,  700 ;  Hough  v.  Rich- 
ardson, id.  659;  Daniel  v.  IMitchell,  1  id.  172;  Small  v.  Attwood,  1  Y'ounge,  407; 
Warner  v.  Daniels,  1  W.  &  M.  90. 

"  Thus,  in  Carlcy  v.  Wilkins,  6  Barb.  557,  it  was  held  that  a  representation  made  by 
a  vendor,  upon  a  sale  of  flour  in  barrels,  that  it  was  in  quality  superfine  or  extra  super- 
fine, and  wortli  a  shilling  a  barrel  more  than  common,  coupled  with  the  assurance  to 
the  buyer's  agent  that  he  might  rely  upon  such  representation,  was  a  warranty  of  (he 
quality  of  the  flour.  So  in  Cave  v.  Coleman,  3  M.  &  R.  2,  where  upon  the  sale  of  a 
horse  the  vendor  said  to  the  vendee,  "  Y^ou  may  depend  upon  it,  the  horse  is  perfectly 
quiet  and  free  from  vice ;"  this  Avas  held  to  amount  to  an  express  warranty.  And  see 
1  Parsons  on  Cont.  463,  n.  (o). 


58  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IV. 

to  the  sample;^  but  there  is  no  warranty  that  the  sample  is  what 
it' appears  to  be.^ 

It  seems,  according  to  the  weight  of  authority,  that  a  breach 
of  warranty  does  not  generally  authorize  the  buyer  to  return  the 
article  sold,  unless  there  be  an  agreement  to  that  effect,  or  fraud.'^ 
But  if  one  orders  a  thing  for  a  special  purpose  known  to  the 
seller,  he  may  certainly  return  it  if  unfit  for  that  purpose,  if  he 
does  so  as  soon  as  he  ascertains  its  unfitness.'^ 

In  this  country,  the  seller  of  goods  actually  in  his  possession  is 
generally  held  to  warrant  his  own  title  by  the  fact  of  the  sale. 
This  we  consider  now  to  be  quite  well  established,  although  it 
has  been  doubted.^     But  if  the  property  be  not  in  the  possession 

1  Bradford  v.  Manly,  13  Mass.  139;  Oneida  Man.  Co.  v.  Lawrence,  4  Cow.  440; 
Andrews  v.  Kncelaud,  6  Cow.  354  ;  Gallagher  v.  Waring,  9  Wend.  20 ;  Webb  v.  Rob- 
erts, 11  Wend.  422  ;  Boorman  v.  Jenkins,  12  Wend.  566  ;  Moses  v.  Mead,  1  Denio,  386; 
Hargous  v.  Stone,  1  Seld.  73 ;  Beirne  v.  Dord,  id.  95,  2  Sandf.  89.  In  this  last  case  it  was 
Iield  that  the  mere  circumstance  that  the  seller  of  goods  exhibits  a  sample  at  the  time 
of  the  sale,  will  not  of  itself  make  it  a  sale  by  sample,  so  as  to  subject  the  seller  to  lia- 
bility on  an  implied  warranty  as  to  the  nature  or  quality  of  the  goods.  To  have  this 
effect,  the  evidence  must  show  that  the  parties  mutually  understood  that  they  were  deal- 
ing with  the  sample,  upon  an  agreement  on  the  part  of  the  seller  that  the  bulk  of  the 
commodity  corresponded  with  the  sample. 

^  Parkinson  v.  Lee,  2  East,  314,  is  the  leading  case  upon  this  point.  That  was  a 
case  of  a  sale  of  five  pockets  of  hops,  with  express  warranty  that  the  bulk  answered  the 
samples  by  which  they  were  sold.  The  sale  was  in  January,  1800;  at  that  time  the 
samples  fairly  answered  to  the  commodity  in  bulk,  and  no  defect  was  at  that  time  per- 
ceptible to  the  buyer.  In  July  following,  every  pocket  was  found  to  have  become  un- 
merchantable and  spoiled,  by  heating,  caused  probably  by  the  hops  having  been  fraud- 
ulently watered  by  the  grower,  or  some  other  person,  before  they  were  purchased  by 
the  defendant.  The  defendant  knew  nothing  of  this  fact  at  the  time  of  sale,  and  it  was 
then  impossible  to  detect  it.  It  was  held  that  there  was  here  no  implied  warranty  that 
the  bulk  of  the  commodity  was  merchantable  at  the  time  of  sale,  although  a  merchant- 
able price  was  given. 

3  Thornton  v.  Wynn,  12  Wheat.  183  ;  Voorhees  v.  Earl,  2  Hill,  288  ;  Gary  v.  Gru- 
man,  4  Hill,  625 ;  Kase  v.  John,  10  Watts,  107  ;  Street  v.  Blay,  2  B.  &  Ad.  456  ;  Gom- 
pertz  r.  Denton,  1  Cr.  &  M.  207  ;  Parson  v.  Sexton,  4  C.  B.  899  ;  OUivant  i-.  Bavley, 
5  Q.  B.  288  ;  Dawson  v.  Collis,  4  E.  L.  &  Eq.  338.  But  see  Taymon  v.  Mitchell,  1 
Md.  Ch.  Decis.  496. 

*  In  Street  v.  Blay,  2  B.  &  Ad.  456,  Lord  Tenterden  said  :  "Although  the  vendee  of 
a  specific  chattel,  delivered  with  a  warranty,  may  not  have  a  right  to  return  it,  the 
same  reason  does  not  apply  to  cases  of  executory  contracts,  where  an  article,  for  in- 
stance, is  ordered  from  a  manufacturer,  who  contracts  that  it  shall  be  of  a  certain  qual- 
ity, or  fit  for  a  certain  purpose,  and  the  article  sent  as  such  is  never  completely  accepted 
by  the  party  ordering  it.  In  tliis  and  similar  cases  the  latter  may  return  it  as  soon  as 
he  discovers  the  defect,  provided  he  has  done  nothing  more  in  the  mean  time  than 
was  necessary  to  give  it  a  fair  trial.  Okell  r.  Smith,  1  Stark.  107  ;  nor  would  the  pur- 
chaser of  a  commodity,  to  be  afterwards  delivered  according  to  sample,  be  bound  to 
receive  the  bulk,  which  may  not  agree  with  it;  nor  after  having  received  what  was  ten- 
dered and  delivered  as  being  in  accordance  with  the  sample,  will  he  be  precluded  by 
the  simple  receipt  from  returning  tlie  article  witiiin  a  reasonable  time  for  the  purpose 
of  examination  and  comparison."     And  see  cases  in  preceding  note. 

*  McCoy  V.  Artchcr,  3  Barb.  323  ;  Dresser  i'.  Ainsworth,  9  id.  619  ;  Edick  v.  Crim, 
10  id.  445:  Huntingdon  v.  Hall,  36  Maine,  501  ;  Coolidge  v.  Brigham,  1  Met.  551.  In 
this  last  case,  IFdVf/,  J.,  says :  '-In  contracts  of  sales,  a  warranty  of  title  is  implied. 
The  vendor  is  always  understood  to  affirm  that  the  property  he  sells  is  his  ovfn.    And 


en.  IV.]         OF  SALES  OF  PERSONAL  PROPERTY.  59 

of  the  vendor,  afcd  there  be  no  assertion  of  ownership  by  him,  no 
implied  warranty  of  title  arises.' 

If  a  thing  is  ordered  of  a  manufacturer  for  a  special  purpose, 
and  is  supplied,  there  is  an  implied  warranty  that  it  is  fit  for  that 
purpose."^  But  this  principle  must  not  be  applied  to  those  cases 
where  an  ascertained  article  is  purchased,  although  it  be  intended 
for  a  special  purpose.  For  if  the  thing  itself  is  specifically 
selected  and  purchased,  the  purchaser  takes  upon  himself  the 
risk  of  its  effecting  its  purpose.^ 

this  implied  affirmation  renders  him  responsible,  if  the  title  proves  defective.  This  re- 
sponsibility the  vendor  incurs,  although  the  sale  may  be  made  in  good  faith,  and  in 
ignorance  of  the  defect  of  his  title.  This  rule  of  law  is  well  established,  and  does  not 
trench  unreasonably  upon  the  rule  of  the  common  law,  caveat  emptor."  And  see  1  Par- 
sons on  Cont.  pp.  457,  458. 

1  See  authorities  in  preceding  note. 

^  Brown  v.  Edgington,  2  M.  &  Gr.  279.  In  this  case  the  defendant  was  a  dealer  in 
ropes,  and  represented  himself  to  be  a  manufacturer  of  the  article.  The  plaintiff,  a 
wine  merchant,  applied  to  him  for  a  crane  rope.  The  defendant's  foreman  went  to  the 
plaintiff 's  premises,  in  order  to  ascertain  the  dimensions  and  kind  of  rope  required. 
He  examined  the  crane  and  the  old  rope,  and  took  the  necessary  admeasurements,  and 
was  told  that  the  new  rope  was  wanted  for  the  purpose  of  raising  pipes  of  wine  out  of 
the  cellar,  and  letting  them  down  into  the  street ;  when  he  informed  the  plaintiff  that 
a  rope  must  be  made  on  purpose.  The  defendant  did  not  make  the  rope  himself,  but 
sent  the  order  to  his  manufacturer,  who  employed  a  third  person  to  make  it.  It  was 
held  that,  as  lietween  the  parties  to  the  sale,  the  defendant  was  to  be  considered  as  the 
manufactnrer,  and  that  there  was  an  implied  warranty  that  the  rope  was  a  fit  and  proper 
one  for  the  purpose  for  which  it  was  orcfered.  And  Tindal,  C.  J.,  said  :  "  It  appears  to 
me  to  be  a  distinction  well  founded,  both  in  reason  and  on  authority,  that  if  a  party 
purchases  an  article  upon  his  own  judgment,  he  cannot  afterwards  hold  the  vendor  re- 
sponsible, on  the  ground  that  the  article  turns  out  to  be  unfit  for  the  purpose  for  which 
it  was  required ;  but  if  he  relies  upon  the  judgment  of  the  seller,  and  informs  him  of 
the  use  to  which  the  article  is  to  be  applied,  it  seems  to  me  the  transaction  carries  with 
it  an  implied  warranty  that  the  thing  furnished  shall  be  fit  and  proper  for  the  purpose 
for  which  it  was  designed."     And  see  1  Parsons  on  Cont.  468,  n.  (v). 

3  Thus,  in  Keates  v.  Kadogan,  2  E.  L.  &  Eq.  320,  Maule,  J.,  says  :  "  If  a  man  says 
to  another,  '  Sell  me  a  hors^  fit  to  carrj'  me,'  and  the  other  sells  a  horse  which  he 
knows  to  be  unfit  to  ride,  he  may  be  liable  for  the  consequences  ;  but  if  a  man  says, 
'  Sell  me  that  gray  horse  to  ride,'  and  the  other  sells  it,  knowing  that  the  former  will 
not  be  able  to  ride  it,  that  would  not  make  him  liable."  And  see  Chanter  r.  Hopkins, 
4  M.  &  W.  399  :  Bluett  v.  Osborne,  1  Stark.  384 ;  Gray  v.  Cox,  4  B.  &  Cr.  108  ;  Dick- 
son V.  Jordan,  11  Ircd.  166. 


60  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  V. 

CHAPTER  V. 
STOPPAGE  IN  TRANSITU. 

A  SELLER,  who  has  sent  goods  to  a  buyer  at  a  distance,  and 
after  sending  them  finds  that  the  buyer  is  insolvent,  may  stop  the 
goods  at  any  time  before  they  reach  the  buyer.  His  right  to  do 
this,  is  called  the  right  of  Stoppage  in  Transitu. 

The  right  exists  only  between  a  buyer  and  a  seller.  A  surety 
for  the  price  of  the  goods,  bound  to  pay  for  them  if  the  buyer 
does  not,  has  not  this  right.^  But  one  who  is  suhstantially  a 
seller,  has ;  thiis  one  ordered  by  a  foreign  correspondent  to  buy 
goods  for  him,  and  then  buying  them  in  his  own  name  and  on 
his  own  credit  and  sending  them  as  ordered,  may  stop  them  in 
transitu.2  So  may  a  principal  who  sends  goods  to  his  factor,^  or 
one  who  remits  money  for  any  particular  purpose.*  The  fact 
that  the  accounts  are  unsettled  between  the  parties,  and  the 
balance  uncertain,  does  not  defeat  the  right;  ^  nor  does  the  recep- 
tion and  negotiation  of  a  bill  for  the  goods,*^  or  actual  part 
payment.'^  But  if  the  goods  are  sent  to  pay  a  precedent  and 
existing  debt  they  are  not  subject  to  this  right.^ 

The  right  exists  only  upon   actual   insolvency;  but  this  need 

not  be  formal  insolvency,  or  bankruptcy  at  law ;  an  actual  ina- 

• 

1  Siffken  v.  Wray,  6  East,  37  L 

2  Feisc  V.  Wray,  3  East,  93. 

3  Kinloch  V.  Craig,  3  T.  K.  119. 
*  Smith  V.  Bowles,  2  Esp.  578. 

5  Wood  V.  Jones,  7  D.  &  R.  126.  In  this  case  a  merchant  in  England  sent  goods  of 
a  given  value  to  a  merchant  at  Quebec  for  sale  on  his  account.  Before  the  goods  were 
sold  or  the  proceeds  ascertained,  tlie  latter  shipped  three  cargoes  of  timber  to  tlie 
former,  to  credit  in  his  account.  Two  of  them  arrived.  Against  the  third  the  con- 
signor drew  a  bill  for  ihe  amount,  whilst  it  was  in  transitu.  In  the  interval  the 
consignee  dishonored  the  bill  and  became  insolvent:  —  Held,  that  tlie  consignor  had  a 
perfect  right  of  stoppage  in  transitu,  and  was  not  bound  to  wait  until  the  mutual 
accounts  between  him  and  the  consignee  were  finally  adjusted. 

*^  And  this  is  true  although  tlie  bills  are  not  yet  mature.  Newhall  v.  Vargas,  13 
Maine,  93;  Bell  v.  Moss,  5  Whart.  189;  Feisc  v.  Wray,  3  East,  93;  Jenkyns  v. 
Usborne,  7  M.  &  Gr.  678,  698;  Donath  i'.  Broomhead,  7  Penn.  St.  301.  And  it  is  said 
that  the  vendor  need  not  tender  back  the  bill.  Edwards  v.  Brewer,  2  M.  &  W.  375  ; 
Hays  V.  Mouillc,  14  Penn.  St.  48. 

'  Hodgson  V.  Loy,  7  T.  R.  440  ;  Newhall  v.  Vargas,  13  Maine,  93. 

^  Smith  V.  Bowles,  2  Esp.  578;  Vertuc  v.  Jewell,  4  Campb.  31  ;  Clark  v.  Mauran,  3 
Paige,  373. 


en.  v.]  STOPPAGE   IN   TRANSITU.  61 

bility  to  pay  one's  debts  in  the  usual  way  being  enough.^  If  the 
seller,  in  good  faith,  stops  the  goods,  in  a  bejief  of  the  buyer's 
insolvency,  the  buyer  may  at  once  defeat  this  stoppage  and 
restore  the  sale,  by  payment  of  the  price.  So  he  may,  we  think, 
by  a  tender  of  adequate  security  if  the  sale  be  on  credit.  And 
if  the  sale  be  on  a  credit  without  security,  by  agreement,  then 
the  seller  can  stop  the  goods  and  demand  security,  only  for  actual 
and  sufficient  cause,  and  takes  this  risk  on  himself.  "We  consider 
these  rules  derivable  from  the  general  principles  of  the  law  of 
stoppage  in  transitu,  but  are  not  aware  that  precisely  these 
questions  have  come  before  the  courts. 

The  stoppage  must  be  effected  by  the  seller,  and  evidenced  by 
some  act;  but  it  is  not  necessary  that  he  should  take  actual  pos- 
session of  the  goods.^  If  he  gives  a  distinct  notice  to  the  party 
in  possession,  whether  carrier,  warehouseman,  middleman,  or 
whoever  else,  before  the  goods  reach  the  buyer,  this  is  enough.^ 
They  can  be  stopped,  however,  only  while  in  transitu;  and  they 
are  in  transit  until  they  come  into  the  possession  of  the  buyer. 
But  this  possession  need  not  be  actual, —  a  constructive  possession 
by  the  buyer  being  sufficient.'*     But  the  entry  of  the  goods  at  the 


1  Thompson  v.  Thompson,  4  Cush.  127,  134  ;  Eogers  v.  Thomas,  20  Conn.  53.  In 
this  last  case  the  point  is  critically  examined. 

2  Litt  V.  Cowley,  7  Taunt.  169  ;  Ilolst  v.  Pownal,  1  Esp.  240;  Ncwhall  v.  Vargas,  13 
Maine,  93. 

^  As  to  what  will  he  a  sufficient  notice,  see  1  Parsons  on  Con.  477,  n.  (I).  In  Whitc- 
licad  ?'.  Anderson,  9  M.  &  W.  518,  it  v/as  held  that  a  notice  of  stoppage  in  transitu,  to 
be  etfcctual,  must  be  given  either  to  the  person  who  has  the  immediate  custody  of  the 
goods,  or  to  the  principal  whose  servant  has  the  custody,  at  such  a  time,  and  under  such 
circumstances,  as  that  he  may,  by  the  exercise  of  reasonable  diligence,  communicate  it 
to  his  servant  in  time  to  prevent  the  delivery  to  the  consignee.  Therefore,  whei'e  tim- 
ber was  sent  from  Quebec,  to  be  delivered  at  Port  Fleetwood  in  Lancashire,  a  notice  of 
stoppage  given  to  the  ship-owner  at  Montrose,  while  the  goods  were  on  their  voyage, 
whereupon  he  sent  a  letter  to  await  the  arrival  of  the  captairt  at  Pleetwood,  directing 
him  to  deliver  the  cargo  to  the  agents  of  the  vendor,  —  was  held  not  to  be  a  sufficient 
notice  of  stoppage  in  transitu. 

*  Sawyer  v.  Joslin,  20  Vt.  172.  In  this  case  goods  were  shipped  at  Troy,  N.  Y., 
directed  to  the  purchaser  at  Vergennes,  Vt.  They  were  landed  upon  the  wharf  at 
Vergennes,  half  a  mile  from  the  purchaser's  place  of  business.  The  purchaser's  goods 
were  usually  landed  at  the  same  place,  and  it  was  not  customary  for  the  wharfinger,  or 
the  carrier,  or  any  one  for  them,  to  have  any  care  of  the  goods  after  they  were  landed ; 
but  the  consignee  was  accustomed  to  transport  the  goods  from  the  wharf  to  his  place 
of  business ;  as  was  also  the  custom  with  other  persons  having  goods  landed  there. 
The  goods,  while  on  the  whai'f,  were  not  subject  to  any  lien  for  frciglit  or  charges.  It 
was  held  that  a  delivery  on  the  wharf  was  a  constructive  delivery  to  the  vendee,  and 
that  the  right  of  stoppage  was  gone  when  the  goods  were  landed.  The  cases  on  this 
point  were  thus  classified  by  Ilall,  J.,  wlio  delivered  the  opinion  of  the  court :  "  The 
cases  cited  and  relied  i;ponby  the  plaintifi^'s  counsel,  where  the  transit  was  held  not  to 
have  terminated,  will,  I  think,  all  be  found  to  fall  within  one  or  the  other  of  the  follow- 
ing classes  :     1.  Cases  in  which  it  has  been  held  that  the  riglit  of  stoppage  existed, 

6 


62  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  V. 

custom-house,  without  payment  of  duties,  does  not  terminate  the 
transit.^  If  the  goods  are  marked  by  the  buyer  and  resold,  this 
may  defeat  the  right  of  the  seller  to  stop  the  goods.^  If  he  has 
received  the  key  of  the  warehouse  where  they  are  stored;^  or 
•demanded  and  marked  them  at  the  inn  where  they  had  arrived 
on  the  termination  of  the  voyage  or  journey,  either  of  these 
things  being  done  by  the  buyer  personally  or  by  his  agent;*  or 
if  the  carrier  still  holds  goods  but  only  as  the  agent  of  the 
buyer ;  in  all  these  cases  the  transit  is  ended.^  But  if  the  car- 
rier holds  them  by  a  lien  for  his  charges  against  the  buyer,  the 
seller  may  pay  these  charges  and  discharge  the  lien,  and  then  stop 
the  goods  in  transitu.^  And  the  master  of  a  ship,  which  the 
buyer  hires  or  owns,  may  be  a  carrier  in  whose  hands  the  seller 
may  stop  the  goods,  if  they  are  to  be  delivered  finally  to  the 
buyer  himself;  but  if  they  have  been  put  on  board  the  buyer's 
ship,  to  be  transported  not  to  him,  but  by  his  order  to  another 
place,  they  are  so  far  in  his  possession,  as  soon  as  on  board,  that 
there  can  be  no  stoppage  in  transitu.'^ 

where  the  goods  were  originally  forwarded  on  board  of  a  ship  chartered  by  the  vendee. 
2.  Where  the  delivery  of  the  goods  to  the  vendee  has  been  deemed  incomplete,  by 
reason  of  his  refusal  to  accept  them.  3.  Where  goods  remained  in  the  custom-house, 
subject  to  a  government  bill  for  duties.  4.  Where  they  were  still  in  the  hands  of  the 
carrier,  or  Avharfinger,  as  his  agent,  subject  to  the  carriers  lien  for  freights.  5.  Where 
the  goods,  though  arrived  at  their  port  of  delivery,  were  still  on  shipboard,  or  in  the 
hands  of  the  ship's  lighterman,  to  be  conveyed  to  the  wharf.  6.  Where  the  goods  had 
performed  part  of  their  transit,  but  were  in  the  hands  of  a  middleman,  to  be  forwarded 
on  by  other  carriers." 

1  Mottrara  v.  Heyer,  1  Denio,  483,  5  id.  629. 

2  Stoveld  V.  Hughes,  14  East,  308. 

»  Wilkes  V.  Ferris,  5  John.  335  ;  Chappel  v.  Marvin,  2  Aik.  79  ;  Ellis  v.  Hunt,  3  T. 
R. 4G8. 

*  Ellis  V.  Hunt,  3  T.  R.  468. 

^  Thus,  in  Allan  v.  Gripper,  2  Cr.  &  Jer.  218,  where  goods  were  conveyed  by  a  car- 
rier by  water,  and  deposited  in  the  carriers  warehouse,  to  be  delivered  thence  to  the 
purchaser  or  his  customers,  as  they  should  be  wanted,  in  pursuance  of  an  agreement  to 
this  eifect  between  the  carrier  and  the  purchaser;  and  this  was  the  usual  course  of 
business  between  them ;  it  was  held  that  the  carrier  became  the  warehouseman  of  the 
purchaser,  upon  the  goods  being  deposited  there,  and  that  the  vendor's  right  of  stoppage 
was  gone. 

•5  Oppenheim  v.  Eussell,  3  B.  &  P.  42. 

■^  This  distinction  was  established  in  Stubbs  v.  Lund,  7  Mass.  453.  There  the 
vendors  resided  in  Liverpool,  England,  and  the  vendees  in  America.  The  goods  were 
delivered  on  board  the  vendees'  own  ship  at  Liverpool,  and  consigned  to  them  or 
assigns,  for  which  the  master  had  signed  bills  of  lading.  The  vendors,  hearing  of  the 
insolvency  of  the  vendees  before  the  vessel  left  Liverpool,  refused  to  let  the  vessel  sail, 
claiming  a  right  to  stop  the  goods,  and  that  they  had  not  reached  their  destination. 
The  right  of  stoppage  was  allowed,  mainly,  it  seems,  on  the  ground  that  the  goods 
were  by  the  bills  of  lading,  to  be  transported  to  the  vendees,  and  were  in  transit  until 
they  reached  them  ;  but  it  was  thought  that  if  the  goods  had  been  intended  for  some 
foreign  market,  and  never  designed  to  reach  the  possession  of  the  purcliasers,  any  more 
than  they  then  had  at  the  time  of  their  shipment,  the  case  would  be  different,  and  the 


en.  v.]  STOPPAGE   IN  TRANSITU,  63 

If  the  buyer  has,  in  good  faith  and  for  value,  sold  the  goods, 
and  indorsed  and  delivered  the  bill  of  lading,  this  second  ])ur- 
chaser  holds  the  goods  free  from  the  first  seller's  right  to  stop 
them.^  But  if  the  goods  and  bill  are  transferred  only  as  security 
for  a  debt  due  from  the  first  purchaser  to  the  transferee,  the  orig- 
inal seller  may  stop  the  goods,  and  hold  them  subject  to  this 
security,  and  need  pay  only  the  specific  advances  made  on  their 
credit  or  on  that  very  bill  of  lading,  and  not  a  general  indebted- 
ness of  the  first  purchaser  to  the  second.^ 

The  question  has  been  much  agitated  whether  the  right  of 
stoppage  in  transitu  was  a  right  to  rescind  the  sale  for  non-pay- 
ment, or  only  an  extension  of  the  common  law  lien  of  the  buyer 
on  the  thing  sold  for  his  price.  And  it  seems  now  quite  well 
settled,  both  in  England  and  in  this  country,  that  it  is  the  latter; 
that  is,  an  extension  of  the  lien.^  Important  consequences  might 
flow  from  this  distinction.  If  the  seller,  by  stopping  the  goods 
in  transitu,  rescinds  the  sale,  he  has  no  further  claim  for  the  price, 
nor  any  part  of  it;  nor  can  the  buyer,  or  any  one  representing 
him,  pay  the  price  and  recover  the  goods  against  the  will  of  the 
seller.  If,  however,  he  only  exercises  his  right  of  lien,  he  holds 
the  goods  as  the  'property  of  the  buyer ;  and  they  may  be 
redeemed  by  him  or  his  representatives,  by  paying  the  price  for 
which  they  are  a  security;  and  if  not  redeemed,  they  become 
absolutely  the  seller's,  in  the  same  way  as  a  pledge  might  become 
his;  and  if  he  fails  to  obtain  from  them  the  full  price  due,  he 
has  a  claim  for  the  balance  upon  the  buyer.  All  of  this  is  not 
positively  determined  by  adjudication,  but  it  would  seem  to'  be 

tr.insit  in  sucli  a  case  would  be  considered  as  ended.  Parsons,  C.  J.,  said:  "In  our 
opinion  the  true  distinction  is,  whether  any  actual  possession  of  the  consignee  or  his 
assigns,  after  the  termination  of  the  voyage,  be  or  be  not  provided  for  in  tlie  bills  of 
lading.  When  such  actual  possession,  after  the  termination  of  the  voyage,  is  so 
provided  for,  then  the  right  of  stopping  in  transitu  remains  after  the  shipment.  Thus, 
if  goods  are  consigned  on  credit,  and  delivered  on  board  a  ship  chartered  by  the  con- 
signee, to  be  imported  by  him,  the  right  of  stopping  in  transitu  continues  after  the  ship- 
ment, (3  East,  381)  ;  but  if  the  goods  are  not  to  be  imported  by  the  consignee,  but  to 
be  transported  from  the  place  of  shipment  to  a  foreign  market,  the  right  of  stopping  in 
transitu  ceases  on  the  shipment,  the  transit  being  then  completed ;  because  no  other 
actual  possession  of  the  goods  by  the  consignee  is  provided  for  in  the  bills  of  lading, 
whicli  express  the  terms  of  the  shipment."  See  1  Parsons  on  Con.  p.  485,  n.  (o),  and 
p.  486,  n.  (t). 

1  Lickbarrow  v.  Mason,  2  T.  11.  63,  1  H.  Bl.  3.57,  6  East,  21,  n. 

2  In  re  Westzinthus,  5  B.  &  Ad.  817;  Spalding  v.  Ruding,  6  Beav.  376. 

"  See  Wentworth  r.  Outhwaite,  10  M.  &  W.  436;  Bloxam  v.  Sanders,  4  B.  &  C. 
941;  Jordan  v.  James,  5  Hamm.  88;  Rowley  v.  Bigelow,  12  Pick.  307  ;  Newhall  v. 
Vargas,  13  Maine,  93,  15  id.  315 ;  Rogers  v.  Thomas,  20  Conn.  53  ;  Gwynne,  Ex  parte, 
12  Ves.  379  ;  Martindale  b:  Smith,  1  Q.  B.  389. 


64  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  V. 

deducible  from  the  principle  that  the  act  of  stoppage  in  transitu 
is  only  the  exercise  of  a  lien  on  the  goods  for  their  price. 

The  exercise  of  this  right  is  necessarily  adverse  to  the  buyer ; 
for  if  the  goods  are  taken  by  the  seller,  by  agreement  with  the 
buyer,  it  is  no  longer  a  stoppage  in  transitu.^  An  honest  buyer, 
apprehending  bankruptcy,  might  wish  to-return  the  goods  to  their 
original  owner ;  and  this  he  could  undoubtedly  do  if  they  have 
not  become  distinctly  his  property,  and  the  seller  his  creditor 
for  the  price.  But  if  they  have,  the  buyer  has  no  more  right  to 
benefit  this  creditor  by  such  an  appropriation  of  these  goods, 
than  any  other  creditor  by  giving  him  any  other  goods.^ 

It  has  been  questioned  whether,  when  goods  sold  are  sent  by 
the  seller  to  the  buyer  by  any  regular  and  usual  conveyance, 
the  vendee  may  go  forward  to  meet  them,  and  take  possession  of 
them  before  the  time  of  their  regular  delivery,  and  thus  abridge, 
by  his  own  act,  the  right  of  stoppage  of  the  seller.  But  it  seems 
that  he  may  do  this,  and  that  the  right  of  stoppage  in  transitu  is 
terminated  by  the  buyer's  thus  taking  possession  of  the  goods.^ 

1  Ash  V.  Putnam,  1  Hill,  302  ;  Navlor  v.  Dennie,  8  Pick.  198. 

^  See  Smith  v.  Field,  5  T.  E,.  402;  Salte  v.  Field,  id.  211  ;  Atkin  v.  Banvick,  1 
Strange,  165;  1  Parsons  on  Con.  490,  n.  (b). 

3  See  Whitehead  v.  Anderson,  9  M.  &  W.  518.  But  see  Blackburn  on  Contract  of 
Sale,  254,  et  seq. 


en.   VI.]  OF   GUARANTY.  65 


CHAPTER    VI. 
OF  GUARANTY. 

A  GUARANTOR  is  One  who  is  bound  to  another  for  the  fulfilment 
of  a  promise,  or  of  an  engagement,  by  a  third  party.  This  kind 
of  contract  is  very  common.  Generally,  it  is  not  negotiable ; 
that  is,  not  transferable  so  as  to  be  enforced  by  the  transferee  in 
his  own  name.i  But  no  special  form  or  words  are  necessary  to 
the  contract  of  guaranty  ;  and  if  the  word  "  guarantee  "  be  used, 
and  the  whole  instrument  contains  all  the  characteristics  of  a 
note  of  hand,  payable  to  order  or  bearer,  then  it  is  negotiable.^ 

The  guaranty  may  be  enforced,  although  the  original  debt 
cannot;  as,  for  example,  the  guaranty  of  the  promise  of  a  wife  ^ 
or  an  infant;*  and  sometimes  the  guaranty  of  a  debt  is  requested 
and  given  for  the  very  reason  that  the  debt  is  not  enforceable  at 
law.  But  generally,  the  liability  of  the  principal  measures  and 
limits  the  liability  of  the  guarantor.  And  if  the  creditor  agree 
that  the  principal  debt  shall  be  reduced  or  lessened  in  a  certain 
proportion,  the  guaranty  is  reduced  in  an  equal  proportion, 
especially  if  the  guarantor  be  a  party  to  the  arrangement.^ 

A  contract  of  guaranty  is  construed  somewhat  strictly.  Thus, 
a  guaranty  of  the  notes  of  one,  does  not  extend  to  notes  which  he 
gives  jointly  with  another.^ 

A  guarantor  who  pays  the  debt  of  the  principal,  may  demand 
from  his  creditor  the  securities  he  holds,'^  although  not,  perhaps, 

1  True  V.  Fuller,  21  Pick.  140  ;  Taylor  r.Binney,  7  Mass.  479  ;  Lamouricux  v.  Hewit, 
5  Wend.  307  ;  Springer  v.  Hutchinson,  19  Maine,  359;  M'Doal  v.  Yeomans,  8  Watts, 
361;  Upliam  v.  Prince,  12  Mass.  14;  Miller  v.  Gaston,  2  Hill,  188;  Watson  v. 
McLaren,  19  Wend.  5.57. 

-  Ketchell  v.  Burns,  24  "Wend.  456.  In  this  case,  the  instrument  was  as  follows  : 
"For  and  in  consideration  of  thirt}--one  dollars  and  fifty  cents  received  of  B.  F.  Spen- 
cer, I  hereby  guarantee  the  payment  and  collection  of  the  within  note  to  him  or  bearer. 
Auburn,  Sept.  25,  1837.     (Signed)    Thomas  Burns."     And  it  was  /ieW  negotiable. 

3  See  Maggs  v.  Ames,  4  Bing.  470;  Connerat  v.  Goldsmith,  6  Geo.  14. 

*  See  Conn  v.  Coburn,  7  N.  H.  368. 

5  Bardwell  v.  Lydall,  7  Bing.  489. 

*^  Russell  V.  Perkins,  1  Mason,  368. 

"  Craythorne  v.  Swinburne,  14  Ves.  160;  Parsons  v.  Briddock,  2  Vern.  608;  Wright 
V.  Morley,  11  Ves.  12 ;  Copis  v.  Middleton,  T.  &  11.  224 ;  Hodgson  v.  Shaw,  3  My.  & 
K.  183;  Yonge  v.  Reynell,  15  Eng.  Law  and  Eq.  237  ;  Mathews  v.  Aikin,  1  Corast.  595. 

6* 


6Q  ELEMENTS   OF  MERCANTILE   LAW.  [CH.   VI. 

an  assignment  of  the  debt  itself,  or  of  the  note  or  bond  which 
declares  the  debt,  for  that  is  paid  and  discharged.^  And  in 
equity,  the  creditor  will  be  restrained  from  resorting  to  the  guar- 
antor, until  he  has  collected  as  much  as  he  can  from  these 
securities.^ 

Unless  the  guaranty  is  by  a  sealed  instrument,  there  must  be 
a  consideration  to  support  it.^  Jf  the  original  debt  or  obligation 
rest  upon  a  good  consideration,  this  will  support  the  promise  of 
guaranty,  if  this  promise  be  simultaneous  with  or  prior  to  the 
original  debt.*  But  if  that  debt  or  obligation  be  first  incurred 
and  completed,  there  must  be  a  new  consideration  for  the  prom- 
ise to  guarantee  that  debt.^  But  it  need  not  pass  from  him  who 
receives  the  guaranty  to  him  who  gives  it.  Any  benefit  to  him 
for  whom  the  guaranty  is  given,  or  any  injury  to  him  who  re- 
ceives it,  is  a  sufficient  consideration  if  the  guaranty  be  given 
because  of  it.*^ 

In  general,  if  there  be  a  new  and  independent  consideration 
for  the  guaranty,  passing  between  the  parties  to  it,  this  will  make 
it  an  original  promise,  and  not  a  promise  to  pay  the  debt  of 
another;  and  will  therefore  protect  it  from  the  Statute  of  Frauds. 
But  of  this  we  shall  speak  particularly  in  the  chapter  on  that 
statute. 

A  guaranty  is  not  binding  unless  it  is  accepted,  and  unless  the 
guarantor  has  knowledge  of  this."  But  the  law  presumes  this 
acceptance  in  general,  when  the  giving  of  the  guaranty  and  an 
action  on  the  faith  of  it,  by  the  party  to  whom  it  is  given,  are 
simultaneous.^     In  New  York,  wherever  the   guaranty  is  abso- 

1  Copis  V.  Middleton,  Turn.  &  R.  224 ;  Hodgson  v.  Shaw,  3  My.  &  K.  183.  But  sec, 
contra,  Goodyear  v.  Watson,  14  Barb.  481. 

2  Cottin  V.  Blane,  2  Anst.  544;  Wright  v.  Niitt,  3  Bro.  C.  C.  326,  1  H.  Bl.  136; 
Wrio;ht  V.  Simpson,  6  Vcs.  728. 

3  Wain  V.  Warlters,  5  East,  10;  Elliott  v.  Gicsc,  7  Har.  &  J.  457  ;  Leonard  v.  Vreden- 
burgh,  8  Johns.  29  :  Cobb  v.  Page,  17  Pcnn.  St.  469. 

■*  Baiubridge  v.  Wade,  1  E.  L.  &  Eq.  236;  Campbell  v.  Knapp,  15  Benn.  St.  27; 
Klein  v.  Currier,  14  111.  237;  Bickford  v.  Gibbs,  8  Cush.  156;  Leonard  v.  Vreden- 
burgh,  8  Johns.  29;  Graham  v.  O'Niel,  2  Hall,  474. 

^  Bell  !'.  Welch,  9  C.B.  154;  Bike  v.  Irwin,  1  Sandf.  14;  Ware  v.  Adams,  24  Maine, 
177  ;  Parker  v.  Barker,  2  Met.  423. 

^  Morley  v.  Boothljy.  3  Bing.  113,  Best,  C.  J. ;  Leonard  v.  Vredcnburgh,  8  Johns.  29. 

7  Gaunt  V.  Hill,  1  Stark.  10 ;  M'lver  r.  Richardson,  1  M.  &  S.  557. 

^  Wildes  V.  Savage,  1  Story,  22  ;  Blocker  r.  Hyde,  3  McLean,  279 ;  New  Haven 
County  Bank  v.  Mitchell,  15  Conn.  206.  In  this  last  case,  A  executed  a  writing, 
•whereby  he  agreed  with  B,  for  value  received,  that  he,  A,  would  at  all  times  hold  him- 
self responsible  to  B,  to  a  limited  amount,  for  such  paper  as  might  be  indorsed  by  C, 
and  holdcn  by  B,  within  the  amount  specified.     The  writing  w.as  simultaneously  deliv- 


en.  VI.]  OP   GUARANTY.  67 

lute,  notice  of  its  acceptance  is  unnecessary,  unless  expressly  re- 
quired.^ But,  generally,  an  ofl'er  to  guaranty  a  future  operation, 
especially  if  by  letter,  does  not  bind  the  ofi'erer,  unless  he  has 
such  notice  of  the  acceptance  of  his  offer  as  would  give  him  a 
reasonable  opportunity  of  indemnifying  himself.^ 

If  the  liability  of  the  principal  be  materially  varied  by  the  act 
of  the  party  guaranteed,  without  the  consent  of  the  guarantor, 
the  guarantor  is  discharged.^  So  is  he,  by  the  weight  of  author- 
ity, if  the  liability  or  obligation  be  renewed  or  extended  by  law. 
As  if  a  bank,  incorporated  for  twenty  years,  be  renewed  for  ten 
more,  and  the  officers  and  business  of  the  bank  go  on  without 
change;  the  original  sureties  of  the  cashier  are  not  held  beyond 


cred  by  A  and  accepted  by  B ;  and  B,  on  the  credit  thereof,  discounted  paper  indorsed 
by  C. '  ILM,  tliat  no  other  acceptance  by  B,  or  notice  thereof  to  A,  was  necessary  to 
perfect  the  obligation  of  A. 

'  Douglass  I'.HowLand,  24  "Wend.  35;  Smith  v.  Dann,  6  Hill,  543;  Union  Bank  v. 
Coster,  3  Comst.  203.  In  this  last  case,  Pratt,  J.,  in  delivering  the  judgment  of  the 
Court  of  Appeals,  said  :  "  We  must  hold  the  law  to  be  settled  in  this  State  that  where 
the  guaranty  is  absolute,  no  notice  of  acceptance  is  necessary." 

-  Lee  V.  Dick,  10  Pet.  482:  Adams  v.  Jones,  12  Pet.  207  ;  Kay  v.  Allen,  9  Barr, 
320;  Musscy  I'.  Ravner,  22  Pick.  223;  Howe  v.  Nickels,  22  Maine,  175;  Lowry  r. 
Adams,  22  Vt.  169." 

3  United  States  v.  Tillotson,  Paine,  305;  United  States  v.  Hillegas,  3  Wa.sh.  C.  C. 
70  ;  Postmaster-General  v.  Eeeder,  4  id.  678.  In  Miller  v.  Stewart,  9  Wheat.  680,  a 
bond  was  given  conditioned  for  the  fi\ithful  performance  of  the  duties  of  the  office  of 
deputy  collector  of  direct  taxes  for  eight  certain  townships,  and  the  instrument  of  ap- 
pointment, referred  to  in  the  bond,  was  afterwards  altered,  so  as  to  extend  to  another 
township,  without  the  consent  of  the  surety.  The  court  held  that  the  surety  was  dis- 
charged from  his  responsibility  for  moneys  subsequently  collected  by  his  principal. 
Again,  in  the  case  of  Bonar  v.  INIacDonald,  1  E.  L.  &  Eq.  1,  in  the  House  of  Lords,  on 
appeal  from  Scotland,  the  facts  were  that,  in  a  bond  by  cautioners  (sureties)  for  the 
careful  attention  to  business  and  the  faithful  discharge  of  the  duties  of  an  agent  of  a 
bank,  it  was  provided  '•  that  he  should  have  no  other  business  of  any  kind,  nor  be  con- 
nected in  any  shape  with  any  trade,  manufacture,  or  mercantile  copartnery,  nor  be 
agent  of  any  individual  or  copartnery  in  any  manner  or  way  whatsoever,  nor  be  secu- 
rity for  any  individual  or  copartnery  in  any  manner  or  way  whatsoever."  The  bank 
subsequently,  without  the  knowledge  of  the  sureties,  increased  the  salary  of  the  agent, 
he  undertak'ing  to  bear  one  fourth  part  of  all  losses  which  might  be  incurred  by  his  dis- 
counts. Ihld,  affirming  the  decision  of  a  majority  of  the  court  below,  that  this  was 
such  an  alteration  of  tlie  contract,  and  of  the  'liability  of  the  agent,  that  the  sureties 
were  discharged,  notwithstanding  that  the  loss  arose,  not  from  discounts,  but  from  im- 
proper conduct  of  the  agent.  And  Lord  Cottcnham,  in  a  written  opinion  which  was 
read  by  Lord  Broiiglinm,  said :  "  The  rule,  as  extracted  from  the  English  authorities, 
Evans  v.  Whyle,  5  Bing.  485;  Evre  v.  Bartrop,  3  Mad.  221 ;  Archer  v.  Ilale,  4  Bing. 
464  ;  Whitclier  v.  Hall,  5  B.  &  Cr.'269,  is,  that  any  variation  in  the  agreement  to  which 
the  surety  has  subscribed,  which  is  made  without  the  surety's  knowledge  or  consent, 
which  may  prejudice  him,  or  which  may  amount  to  a  substitution  of  a  new  agreement 
for  a  former  agreement,  and,  though  the  original  agreement  may,  notwithstanding  such 
variation,  be  substantially  performed,  will  discharge  the  surety  ;  and  as  to  Scotland,  in 
Bell's  Principles,  71,  the"  rule  is  laid  down,  that  the  cautioner  is  freed  by  any  essential 
change  consented  to  by  the  creditor  in  the  principal  obligation  or  transaction,  without 
the  knowledge  or  assent  of  the  cautioner,  which  is  supported  by  the  authorities  referred 
to."    And  see  Farmers  and  Mechanics'  Bank  i'.  Kercheval,  2  Mich.  504. 


68  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VI. 

the  first  term.^  So  a  guaranty  to  a  partnership  is  extinguished 
by  a  change  among  the  members,  although  neither  the  name  nor 
the  business  of  the  firm  be  changed.^  But  a  guaranty,  by  ex- 
press terms,  may  be  made  to  continue  over  most  changes  of  this 
kind.3 

A  specific  guaranty,  for  one  transaction,  is  not  revocable.  If 
it  be  a  continuing  or  a  general  guaranty,  it  is  revocable,  unless 
an  express  agreement,  founded  on  consideration,  makes  it  other- 
wise.* 

A  creditor  may  give  his  debtor  some  accommodation  or  indul- 

'  Union  Bank  v.  Ridgely,  1  Har.  &  Gill,  324.  This  was  an  action  against  the  sure- 
ties of  a  cashier  for  the  faithful  performance  of  his  duties.  The  charter  of  the  bank 
expired,  and  was  extended  bj  a  new  act  of  the  legislature.  The  alleged  default  of  the 
cashier  occurred  after  the  recnactment  of  the  charter.  The  court  held  that,  where  an 
act  of  incorporation,  under  which  a  bond  was  taken  to  secure  the  good  conduct  of  one 
of  the  officers  of  the  corporation,  was  limited  in  its  duration  to  a  certain  period,  the 
bond  must  have  the  same  limitation  ;  because,  the  parties  looking  to  that  act,  it  would 
seem  to  be  very  clear  that  no  responsibility  was  contemplated  beyond  the  period  of  its 
specified  existence.  The  extension  of  the  charter  beyond  the  period  pf  its  first  limita- 
tion, by  legislative  authority,  does  not  enter  into  the  contract,  and  cannot  enlarge  it. 
And  see  Baraford  v.  lies,  3  Exch.  380.  But,  in  the  case  of  Exeter  Bank  v.  Eogers,  7 
N.  H.  21,the  court  took  a  diff'erent  view  of  this  question.  It  appeared  that  Exeter 
Bank  was  incorporated  by  an  act  of  the  legislature,  in  1803,  to  continue  for  the  term 
of  twenty  years,  from  January  1,  1804.  In  1822,  an  additional  act  of  the  legislature 
was  passed,  providing  that  the  first  act  should  remain  and  continue  in  force  for  a  fur- 
ther term  of  twenty  years,  from  January  1,  1824.  The  defendant,  Rogers,  was  appointed 
cashier  of  the  bank  in  1809,  gave  bond  with  sureties  for  the  faithful  discharge  of  the 
duties  of  the  office,  and  continued  cashier  until  1830.  It  was  held  that  the  bond  cov- 
ered all  the  time  that  Rogers  remained  in  office. 

2  Bellairs  v.  Ebsworth,  3  Campb.  52 ;  Russell  v.  Perkins,  1  Mason,  368 ;  Weston  v. 
Barton,  4  Taunt.  673.  In  this  last  case,  it  was  held  that  a  bond  conditioned  to  repay 
to  five  persons  all  sums  advanced  by  them,  or  any  of  them,  in  their  capacity  of  bankers, 
will  not  extend  to  sums  advanced  after  the  decease  of  one  of  the  five  by  the  four  sur- 
vivors, the  four  then  acting  as  bankers.  Mansfield,  C.  J.,  said  :  "  The  question  here  is, 
where  the  original  partnership  being  at  an  end,  in  consequence  of  the  deatli  of  Golding, 
the  bond  is  still  in  force  as  security  to  the  surviving  four;  or  whether,  that  political 
personage,  as  it  may  be  called,  consisting  of  five,  being  dead,  the  bond  is  not  at  an  end. 
....  From  almost  all  the  cases,  in  truth  we  may  say  from  all,  (for,  though  there  is  one 
adverse  case  of  Barclay  v.  Lucas,  the  propriety  of  that  decision  has  been  very  much 
questioned,)  it  results  that,  where  one  of  the  obligees  dies,  the  security  is  at  an  end.  It 
is  not  necessary  now  to  enter  into  the  reasons  of  those  decisions,  but  there  may  be  very 
good  reasons  for  such  a  construction  ;  it  is  very  probable  that  sureties  may  be  induced 
to  enter  into  such  a  security  by  a  confidence  which  they  repose  in  the  integrity,  diligence, 
caution,  and  accuracy  of  one  or  two  of  the  partners.  In  the  nature  of  things,  there 
cannot  be  a  partnership  consisting  of  several  persons,  in  which  there  are  not  some  per- 
sons possessing  these  qualities  in  a  greater  degree  than  the  rest;  and  it  may  be  that  the 
partner  dying,  or  going  out,  may  be  the  very  person  on  whom  the  sureties  relied ;  it 
would,  therefore,  be  very  unreasonable  to  hold  the  surety  to  his  contract,  after  such 
change.  As  to  the  case  of  Barclay  v.  Lucas,  3  Doug.  321,  1  T.  R.  291,  n.  (a,)  cited  by 
hi§  lordship  in  the  preceding  extract,  see  1  Parsons  on  Con.  507,  n.  (m.)  See  further, 
Bodenham  v.  Purchas,  2  B.  &  Aid.  39  ;  New  Haven  County  Bank  v.  Mitchell,  15  Conn. 
206  ;  Staats  v.  Howlett,  4  Denio,  559  ;   1  Parsons  on  Con.  502,  et  seq. 

3  Barclay  v.  Lucas,  3  Doug.  321,  1  T.  R.  291,  n.  (o) ;  Pease  v.  Hirst,  10  B.  &  Cr. 
122. 

*  See  Hassell  v.  Long,  2  M.  &  S.  370;  Calvert  v.  Gordon,  7  B.  &  C.  809;  Hough 
V.  Warr,  1  C  &  P.  151. 


en.   VI.]  OF   GUARANTY.  69 

gence,  without  thereby  discharging  his  guarantor.^  It  would 
seem  just,  however,  that  he  should  not  be  permitted  to  give  him 
any  indulgence  which  would  materially  prejudice  the  guaraii- 
tor.2  Generally,  a  guarantor  may  always  pay  a  debt,  and  so  ac- 
quire at  once  the  right  of  proceeding  against  the  party  whose 
debt  he  has  paid.  On  this  ground,  it  has  been  held  that  where 
a  surety  requested  the  creditor  to  proceed  against  the  principal 
debtor,  and  the  creditor  refused  to  do  this,  and  afterwards  the 
debtor  became  insolvent  and  the  surety  was  without  indemnity, 
still,  the  surety  (or  guarantor)  was  not  discharged.^  But  if  by 
gross  negligence,  the  creditor  has  lost  his  debt,  and  has  deprived 
the  surety  of  security  or  indemnity,  we  should  say  that  the  surety 
must  be  discharged,  unless  he  was  equally  negligent.*  If  a  credi- 
tor gives  time  to  his  debtor,  by  a  binding  agreement  which  \\^I1 
prevent  a  suit  in  the  mean  time,  this  undoubtedly  discharges  the 
guarantor,  because  it  deprives  him  of  his  power  of  paying  the 
debt,  and  by  that  means  acquiring  a  right  of  proceeding  against 
the  debtor.^ 


1  Huffman  r.  Hulbert,  13  Wend.  377;  Davis  v.  Huffgins,  3  N.  H.  231 :  Bellows  v. 
Lovcll,  5  Pick.  307  ;  Eric  Bank  v.  Gibson,  1  Watts,  143;  Cope  v.  Smith,  8  S.  &  R. 
110. 

2  Row  V.  Pulver,  1  Cow.  246  ;  Herrick  v.  Borst,  4  Hill,  650. 

»  Bellows  V.  Lovell,  5  Pick.  307  ;  Davis  v.  Huggins,  3  N.  H.  231. 

*  See  Pain  v.  Packard,  13  Jolins.  174  ;  King  v.  Baldwin,  17  id.  384  ;  Row  v.  Pulver, 
1  Cow.  246  ;  ManQhester  Iron  Man.  Co.  v.  Sweeting,  10  AVend.  162  ;  Huffman  v.  Hul- 
bert, 13  id.  377  ;  Herrick  v.  Borst,  4  Hill,  650.  In  New  York,  it  is  settled  that  if  the 
surety  requests  the  creditor  to  proceed  against  the  principal  debtor,  and  he  refuses,  and 
the  principal  debtor  afterwards  becomes  insolvent,  the  surety  will  be  discharged.  See 
cases  supra.  But  this  rule  has  not  been  established  there  without  much  opposition.  In 
Henrick  v.  Borst,  4  Hill.  650,  Coweti,  J.,  says  :  "  What  principle  such  a  defence  should 
ever  have  found  to  stand  upon  in  any  court,  it  is  difficult  to  see.  It  introduces  a  new 
term  into  the  creditor's  contract.  It  came  into  this  court  without  precedent,  (Pain  v. 
Packard,  13  Johns.  174,)  was  afterwards  repudiated  even  by  the  Court  of  Chancery, 
(King  V.  Baldwin,  2  Johns.  Ch.  554,)  as  it  always  has  been,  both  at  law  and  equity,  in 
England ;  but  was  restored  on  a  tie  in  the  Court  of  Errors,  turned  by  the  casting  vote 
of  a  layman.  King  v.  Baldwin,  17  Johns.  384.  Piatt,  J.,  and  Yates,  J.,  took  that  occa- 
sion to  acknowledge  that  they  had  erred  in  Pain  v.  Packard,  as  Senator  Van  Vechten 

showed  most  conclusively  that  the  whole  court  had  done I  do  not  deny  that  the 

error  has  become  inveterate,  though  it  has  never  been  treated  with  much  favor.  _  A 
dictum  was  referred  to  on  the  argument,  in  the  Manchester  Iron  Man.  Co.  v.  Sweeting, 
10  Wend.  162,  that  the  refusal  to  sue  is  tantamount  to  an  agreement  not  to  prosecute 
the  surety.  The  remark  meant,  however,  no  more  than  that  such  a  neglect  as  amounts 
to  a  defence  is  like  the  agreement  not  to  sue  in  respect  to  being  receivable  under  the 
general  issue.  The  judge  was  speaking  to  the  question  whether  the  defence  should  not 
have  been  specially  pleaded  as  it  was  in  Pain  v.  Packard.  On  the  other  hand,  it  has 
often  been  said  tliat  the  defence  should  not  be  encouraged,  but  rather  discountenanced; 
and  several  decisions  will  be  found  to  have  proceeded  on  this  ground."  Sec  Dawson 
V.  Lawes,  23  E.  L.  &  Eq.  365;  Wetzel  v.  Sponsler,  18  Penn.  St.  460. 

°  Leavitt  v.  Savage,  16  Maine,  72 ;  Bailey  v.  Adams,  10  N.  H.  162 ;  Joslyn  v.  Smith, 
13  Vt.  353  ;  Lime  Rock  Bank  v.  Mallett,  34  Maine,  547. 


70  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VI. 

If  there  be  a  failure  on  the  part  of  the  principal,  and  the 
guarantor  is  looked  to,  he  should  have  reasonable  notice  of  this. 
And,  generally,  at  least,  any  notice  would  be  reasonable  which 
would  be  sufficient  in  fact  to  prevent  his  suffering  from  the  delay. 
And  if  there  be  no  notice,  and  the  guarantor  has  been  unharmed 
thereby,  he  is  not  discharged.^ 

If  a  guaranty  purport  to  be  official,  that  is,  if  made  by  one 
who  claims  to  hold  a  certain  office,  and  to  give  the  promise  of 
guaranty  only  as  such  officer,  and  not  personally,  the  general 
rule  is,  that  he  is  not  liable  personally,  provided  he  actually  held 
that  office  and  had  a  right  to  give  the  guaranty  officially.'^  But 
he  would  still  be  held  personally  if  the  promise  made,  or  the  rela- 
tions of  the  parties  indicated,  that  credit  was  given  personally*  to 
the  parties  promising.^ 

'  This  is  the  well-settled  law  in  Massachusetts.  Oxford  Bank  v.  Haynes,  8  Pick. 
423;  Bickford  v.  Gibbs,  8  Cush.  154.  In  this  last  case,  Shaiv,  C-  J.,  said:  "This  ques- 
tion has  been  much  discussed,  especially  since  the  leading  case  of  Oxfoi-d  Bank  v. 
Haynes,  8  Pick.  423.  The  principle  to  be  deduced  from  that  case,  and  the  Pennsyl- 
vania case  of  Gibbs  v.  Cannon,  9  S.  &  R.  202,  there  cited  with  approbation  and  relied 
on,  is  this  :  That,  in  order  to  maintain  an  action  against  a  guarantor,  a  demand  of  pay- 
ment must  be  made  in  a  reasonable  time  of  the  principal,  and  notice  of  non-payment 
given  to  the  guarantor ;  and  if,  in  consequence  of  want  of  such  notice,  the  guarantor 
suffers  loss,  he  is  exonerated.  Dole  v.  Young,  24  Pick.  250.  The  same  prompt  de- 
mand and  notice  as  are  required  to  charge  an  indorser,  are  not  necessary ;  and  if  the 
circumstances  of  parties  remain  the  same,  and  the  guarantor  suffers  no  loss  by  delay, 
demand  and  notice  at  any  time  before  action  brought  will  be  sufficient.  Babcock  v. 
Bryant,  12  Pick.  133."  But  see  Douglass  v.  Howland,  24  Wend.  35  ;  Beebe  v.  Dudley, 
6  Post.  249  ;  Farmers  and  Mechanics'  Bank  v.  Kercheval,  2  Mich.  504. 

^  Macbeath  v.  Ilaldimand,  1  T.  R.  172. 

^  Burrell  v.  Jones,  3  B.,&  Aid.  47  ;  Appleton  v.  Binks,  5  East,  148  ;  Hall  y.  Ashurst, 
1  Cr.  &  M.  714;  Redhead  v.  Cator,  1  Stark.  14;  Sumner  v.  Williams,  8  Mass.  162. 


CH.  VII.]  OF  THE   STATUTE   OF   FRAUDS.  71 


CHAPTER   VII. 
OF  THE  STATUTE  OF  FRAUDS.  . 

SECTION  I. 

OF   ITS   PURPOSE   AND   GENERAL   PROVISIONS. 

The  Statute  of  Frauds,  so  called,  was  passed  in  the  29th  year 
of  Charles  11.  (1677)  for  the  purpose  of  preventing  frauds  and 
perjuries,  by  requiring  in  many  cases  written  evidence  of  a  con- 
tract. It  is  very  generally  in  force  in  this  country,  either  by  ex- 
press enactment,  or  as  a  part  of  our  common  law.  Those  pro- 
visions which  especially  relate  to  commercial  law,  are  contained 
in  the  fourth  and  seventeenth  sections. 

By  the  fourth  section,  it  is  enacted  that  "  no  action  shall  be 
brought  whereby  to  charge  any  executor  or  administVator  upon 
any  special  promise,  to  answer  damages  out  of  his  own  estate ; 
or  whereby  to  charge  the  defendant,  upon  any  special  promise, 
to  answer  for  the  debt,  default,  or  miscarriages  of  another  person ; 
or  to  charge  any  person  upon  any  agreement  made  upon  consid- 
eration of  marriage  ;  or  an)'-  contract  for  sale  of  lands,  tenements, 
or  hereditaments,  or  any  interest  in  or  concerning  them ;  or  upon 
any  agreement  that  is  not  to  be  performed  within  the  space  of 
one  year  from  the  making  thereof;  unless  the  agreement,  upon 
which  such  action  shall  be  brought,  or  some  memorandum  or 
note  thereof,  shall  be  in  writing,  and  signed  by  the  party  to  be 
charged  therewith,  or  some  other  person  thereunto  by  him  law- 
fully authorized." 

By  the  seventeenth  section,  it  is  enacted  that  "  no  contract  for 
the  sale  of  any  goods,  wares,  and  merchandises,  for  the  price  of 
£10  sterling,  or  upwards,  shall  be  allowed  to  be  good,  except 
the  buyer  shall  accept  part  of  the  goods  so  sold,  and  actually  re- 
ceive the  same,  or  give  something  in  earnest  to  bind  the  bargain, 
or  in  part  of  payment,  or  that  some  note  or  memorandum  in 
writing  of  the  said  bargain  be  made  and  signed  by  the  parties  to 


72  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  VII. 

be  charged  by  such  contract,  or  tlieir  agents  thereunto  lawfully 
authorized." 

The  second  and  fifth  clauses  of  the  fourth  section,  and  the 
whole  of  the  seventeenth,  relate  to  our  present  subject.  The 
second  clause  prevents  an  oral  guaranty  from  being  enforced  at 
law ;  but  if  money  be  paid  on  one,  it  cannot  be  recovered  back.' 


SECTION  II. 

OF   A  PROMISE   TO   PAY   THE   DEBT   OF   ANOTIIEU. 

Such  a  promise,  although  in  writing,  is  not  valid  without  a 
consideration ;  as  we  have  already  stated  and  illustrated  in  the 
chapter  on  guaranty.  And  this  necessity,  and  difficulty  of  dis- 
tinguishing in  many  cases  between  an  original  promise,  which 
need  not  be  in  writing,  and  a  collateral  promise  which  must  be 
in  writing,  has  caused  much  litigation  ;  nor  are  all  the  rules 
which  relate  to  this  question  as  yet  positively  determined.  Per- 
haps nothing  better  can  be  said  than  that,  1.  Where  the  guaranty 
is  made  at  the  same  time  with  the  original  promise,  and  is  an 
essential  cause  of  the  credit  given  to  the  original  promisor,  that 
credit  is  a  consideration  for  the  collateral  promise.^  2.  Where 
the  guaranty  is  given  after  the  original  promise  is  completed  and 
credit  given,  there  must  be  a  new  consideration  for  the  guaranty.^ 
3.  If,  after  the  new  promise  is  given,  the  original  promisor  re- 
mains liable,  and  there  is  no  liability  on  the  part  of  the  guarantor 
other  than  what  arises  from  his  guaranty,  this  is  a  collateral 
promise,  and  is  generally  within  the  provisions  of  the  statute,  and 
must  be  in  writing."^ 

1  Griffith  V.  Young,  12  East,  513;  Philbrook  v.  Belknap,  6  Vt.  383;  Abbott  v. 
Draper,  4  Denio,  51 ;  Westfall  v.  Parsons,  16  Barb.  645. 

2  Per  Kent^  C.  J.,  in  Leonard  v.  Vredcnburgh,  8  Johns.  29,  a  very  leading  and  cele- 
brated case  upon  this  clause  of  the  statute.  In  the  recent  case  of  Brewster  v.  Silence, 
4  Seld.  207,  in  the  New  York  Court  of  Appeals,  Willard,  J.,  adverting  to  the  case  of 
Leonard  v.  Vredenburgh,  said :  "  The  then  chief  justice  lioped,  by  his  learned  and 
elaborate  opinion  in  that  case,  to  put  at  rest  forever  most  of  the  questions  arising  under 
that  branch  of  the  statute  of  frauds  which  relates  to  special  promises  to  answer  for  the 
debt,  default,  or  miscarriage  of  another.  But  a  review  of  the  cases  in  this  State,  for  the 
last  forty  years,  will  show  how  fruitless  was  the  attempt.  Instead  of  settling  conflicting 
doubts,  few  questions  have  occasioned  more  controversy,  or  given  birth  to  more  nice 
and  shadowy  distinctions  than  those  arising  out  of  this  branch  of  the  statute  of  frauds." 

3  Ibid. 

*  Sec  2  Parsons  on  Con.  300,  ct  seq. 


en.  VII.]  OF   THE   STATUTE    OF   FRAUDS.  73 

It  is  often  difficult  to  say  wliether  the  promise  of  one  to  jjay 
for  goods  delivered  to  another,  is  an  original  promise,  as  to  pay 
for  one's  own  goods,  or  a  promise  to  pay  the  debt  or  gnaranty 
the  promise  of  him  to  whom  the  goods  are  delivered.  The  ques- 
tion may  always  be  said  to  be  :  To  ivhom  did  the  seller  give,  and 
ivas  authorized  to  give,  credit}  This  question  the  jury  will  de- 
cide, upon  consideration  of  all  the  facts,  under  the  direction  of 
the  court.2  If,  on  examination  of  the  books  of  the  seller,  it  appear 
that  he  charged  the  goods  to  the  party  who  received  them,  it  will 
be  difficult,  if  not  impossible,  for  him  to  maintain  that  he  sold 
them  to  the  other  party.^  But  if  he  charged  them  to  this  other, 
such  an  entry  would  be  good  evidence,  and  if  confirmed  by  cir- 
cumstances, strong  evidence  that  this  party  was  the  purchaser.'* 
But  it  cannot  be  conclusive  ;  for  the  party  not  receiving  the  goods 
may  always  prove,  if  he  can,  that  he  was  not  the  buyer,  and  that 
he  promised  only  as  surety  for  the  party  who  was  the  buyer; 
and,  consequently,  that  his  promise  cannot  be  enforced  if  not  in 
writing.  And,  in  general,  in  determining  this  question,  the  court 
will  always  look  to  the  actual  character  of  the  transaction,  and 
the  intention  of  the  parties.^ 

If  a  promise  or  undertaking  be  once  shown  to  be  original,  and 
not  collateral,  as  we  have  endeavored  to  explain  and  illustrate 

'  In  Biikmyr  v.  Darnell,  1  Salk.  27,  the  court  said:  "If  two  come  to  a  shop,  and 
one  buys,  and  the  other,  to  gain  him  credit,  promises  the  seller,  '  If  he  does  not  pay 
you,  I  will,'  this  is  a  collateral  undertaking,  and  void,  without  writing,  by  the  Statute 
of  Frauds.  But  if  he  says,  '  Let  him  have  the  goods,  I  will  be  your  paymaster,'  or  'I 
will  see  you  paid,'  this  is  an  undertaking  as  for  himself,  and  he  shall  be  intended  to  bo 
the  very  buyer,  and  the  other  to  act  but  as  his  servant."  So,  in  the  well-considered 
case  of  Elder  v.  Warfield,  7  II.  «&  John.  391,  Buchanan,  J.,  said  :  "If  B  gives  credit  to 
C  for  goods  sold  and  delivered  to  him,  on  the  promise  of  A  to  '  see  him  paid,'  or  '  to 
pay  him  for  them  if  C  should  not,'  in  that  case,  it  is  the  immediate  debt  of  C,  for  which 
an  action  will  lie  against  him,  and  the  promise  of  A  is  a  collateral  undertaking  to  pay 
that  debt,  he  being  only  as  a  security.  But  where  the  party  undertaken  for  is  under 
no  original  liability,  the  promise  is  an  original  undertaking,  and  binding  upon  the 
party  promising,  without  being  in  writing.  Thus,  if  B  furnishes  goods  to  C,  on  the 
express  promise  of  A  to  pay  for  them,  as  if  A  says  to  him,  'Let  C  have  goods  to  such 
an  amount,  and  I  will  pay  you,'  and  the  credit  is  given  to  A,  in  that  case  C  being 
under  no  liability,  there  is  nothing  to  which  the  promise  of  A  can  be  collateral;  but  A 
being  the  immediate  debtor,  it  is  his  original  undertaking,  and  not  a  promise  to  answer 
for  the  debt  of  another."  See  further  upon  this  distinction,  Watkins  v.  Perkins,  1  Ld- 
Eaym.  224;  Harris  v.  Iluntbach,  1  Burr.  371  ;  Jones  v.  Cooper,  I  Cowper,  227;  Mat- 
son  r.  Wharam,  2  T.  R.  80;  Anderson  v.  Hayman,  1  H.  Bl.  120  ;  Keate  v.  Temple,  1 
B.  &  P.  158  ;  Storr  v.  Scott,  6  C.  &  P.  241 ;  Flanders  v.  Crolius,  1  Duer,  206. 

2  See  cases  in  preceding  note. 

3  See  Matthews  v.  Milton,  4  Yerg.  576 ;  Gardiner  v.  Hopkins,  5  Wend.  23 ;  Gra- 
ham ?;.  O'Nei],  2  Hall,  474 ;  Porter  v.  Langhorn,  2  Bibb,  63.  And  see  cases  cited 
supra,  n.  ( 1 . ) 

*  See  cases  supra. 

5  Keate  i'.  Temple,  1  B.  &  P.  158. 

7 


74  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VII. 

those  terms,  it  can  never  be  brought  within  the  operation  of  the 
statute.  This  is  a  rule  to  which  there  is  no  exception  that  we 
are  aware  of.  But  the  converse  does  not  hold  universally.  For, 
though  it  is  generally  true,  as  we  have  said,  that  collateral  prom- 
ises are  within  the  statute,  there  are  several  cases  in  the  books  of 
collateral  promises  to  which  it  has  been  held  that  the  statute  did 
not  apply.  Many  attempts  have  been  made  to  discover  a  prin- 
ciple which  would  explain  all  these  cases,  and  serve  as  a  test  in 
the  future  for  distinguishing  those  collateral  promises  which  are, 
from  those  which  are  not,  within  the  statute.  Chief  Justice  Kent 
stated  the  principle  thus  :  "  When  the  promise  to  pay  the  debt  of 
another,  arises  out  of  some  new  and  original  consideration  of 
benefit  or  harm,  moving  between  the  newly  contracting  parties, 
it  is  not  within  the  statute."  ^  But  this  will  scarcely  explain  all 
the  cases,  though  it  may  most  of  them.  We  should  prefer  to 
state  the  distinction  thus  :  "Whenever  the  main  purpose  and  ob- 
ject of  the  promisor  is  not  to  answer  for  another,  but  to  subserve 
some  purpose  of  his  own,  his  promise  is  not  within  the  statute, 
although  it  may  be  in  form  a  promise  to  pay  the  debt  of  another, 
and  although  the  performance  of  it  may  incidentally  have  the 
effect  of  extinguishing  the  liability  of  another.^ 

An  oral  promise  to  pay  the  debt  of  another,  and  to  do  some 
other  thing,  can  be  enforced  at  law,  if  this  other  thing,  and  so 
much  of  the  promise  as  relates  to  it,  can  be  severed  from  the 
debt  of  the  other  and  the  promise  relating  to  it.^ 


SECTION  in. 

OF  AN  AGREEMENT  NOT  TO  BE  PERFORMED  WITHIN  A  YEAR. 

Under  the  fifth  clause  in  the  fourth  section,  it  is  held  that  an 
agreement  which  may  be  performed  within  the  year,  is  not 
affected  by  the  statute,  as  the  words,  "  that  is  not  to  be  performed 
within  one  year,"  do  not  apply  to  an  agreement  which,  when 
made,  was,  and  by  the  parties  was  understood  to  be,  fairly  ca- 

1  Leonard  v.  Vredenburgli,  8  Johns.  29. 

^  See  Nelson  v.  Boynton,  3  Met.  396;  Alger  v.  Scoville,  1  Gray,  391.  And  see  2 
Parsons  on  Con.  305  et  seq.,  where  the  cases  on  this  subject  are  collected. 

"  Mayfield  v.  Wadsley,  3  B.  &  Cr.  357  ;  Wood  v.  Benson,  2  Cr.  &  J.  94 ;  Rand  o. 
Mather,  7  Law  Rep.  N.  S.  286. 


en.  YII.]  OF  THE  STATUTE  OF  FRAUDS.  75 

pable  of  complete  execution  within  a  year,  without  the  interven- 
tion of  extraordinary  circumstances,  —  although  in  point  of  fact 
its  execution  was  extended  much  beyond  the  ycar.^ 


SECTION  IV. 

or    THE   ACCEPTANCE   OF    A    THING   SOLD. 

Under  the  exceptional  clause  in  the  seventeenth  section,  ^^  un- 
less the  buyer  shall  accept  and  actually  receive  the  same,"  it  is 
clear  that  a  mere  delivery  is  not  endligh,  without  a  distinct  ac- 
ceptance by  the  buyer. 

But  any  thing  would  amount  to  a  delivery  and  acceptance, 

1  An  agreement  may  be  incapable  of  performance  within  a  year,  cither  from  the  ex- 
press terms  of  the  agreement  itself,  or  from  its  subject-matter,  and  in  either  case  it  is 
within  the  statute.  Thus,  in  Bracegirdle  v.  Ilealcl,  I  B.  &  Aid.  722,  it  was  held  that  a 
contract  made  on  the  27th  of  May,  for  a  year's  service,  to  commence  on  the  30th  of 
June  following,  was  within  the  statute.  So,  where  A,  on  the  20th  of  July,  made  pro- 
posals to  B  to  enter  his  service  as  bailiff  for  a  year,  and  B  took  the  proposals  and  went 
away,  and  entered  into  A's  service  on  the  24th  of  July,  it  was  held  that  this  was  a  con- 
tract on  the  20th,  and  so  not  to  be  performed  within  the  space  of  one  year  from  the 
making,  and  within  the  -tth  section  of  the  Statute  of  Frauds.  Snelling  v.  Lord  Ilunt- 
ingfield,  1  Cr.  M.  &  llos.  20.  Again,  in  Birch  v.  The  Earl  of  Liverpool,  9  B.  &  Cr. 
392,  it  was  held  that  a  contract  whereby  a  coachmaker  agreed  to  let  a  carriage  for  a 
term  of  five  years,  in  consideration  of  receiving  an  annual  payment  for  the  use  of  it, 
was  within  the  statute.  And  see  Hill  v.  Hooper,  1  Gray,  131.  So,  if  it  is  clear,  from 
the  whole  scope  of  a  contract,  taking  into  view  its  subject-matter  and  the  stipulations 
of  the  parties,  that  the  parties  contemplated  more  than  a  year,  as  the  period  for  its  per- 
formance, it  is  within  the  statute.  See  Boydell  v.  Drumraond,  11  East,  142  ;  Herrin  v. 
Butters,  20  Maine,  119.  But  where  the  time  for  the  performance  of  a  contract  is  made 
to  depend  upon  some  contingency,  which  may  or  may  not  happen  within  a  year,  the 
contract  is  not  within  the  statute.  '  This  was  decided  against  the  opinion  of  Bolt,  C.  J., 
in  the  case  of  Peter  v.  Compton,  Skin.  353.  There,  the  defendant  promised  for  one 
guinea  to  give  the  plaintift'  so  many  guineas  on  the  day  of  his  marriage.  And  it  was 
held  that  the  plaintiff  was  entitled  to  recover,  although  the  agreement  was  not  in  writ- 
ing. And  see  Fenton  v.  Emblers,  3  Burr.  1278;  Wells  v.  Horton,  4  Bing.  40.  And 
this  doctrine  has  been  carried  so  far  as  to  include  a  case  where  one  undertakes  to  ab- 
stain from  doing  a  certain  thing,  without  limitation  as  to  time,  on  the  ground  that  such 
a  contract  is  in  its  nature  binding  only  during  the  life  of  the  party.  Thus,  in  Lyon 
V.  King,  11  Met.  411,  the  defendant,  for  a  good  consideration,  promised  the  plaintiff 
that  he  would  not  thereafter  engage  in  the  staging  or  the  livery  stable  business  in 
Southbridge.  And  the  court  held  that  the  contract  was  not  within  the  statute.  Dewey, 
J.,  said  :  '•  The  contract  might  have  been  wholly  performed  within  a  year.  It  was  a 
personal  engagement  to  forbear  doing  certain  acts.  It  stipulated  nothing  beyond  the 
defendant's  life.  It  imposed  no  duties  upon  his  legal  representatives,  as  might  have 
been  the  case  under  a  contract  to  perform  certain  positive  duties.  The  mere  fact  of 
abstaining  from  pursuing  the  staging  and  livery  stable  business,  and  the  happening  of 
his  death  during  the  year,  would  be  a  full  performance  of  this  contract.  Any  stipula- 
tion in  the  contract," looking  beyond  the  year,  depended  entirely  upon  the  contingency 
of  the  defendant's  life ;  and  this  being  s'o,  the  case  falls  within  the  class  of  cases  in 
which  it  has  been  held  that  the  statute  docs  not  apply."  And  see  Foster  i\  McO'Blenis, 
18  Missouri,  88.  For  a  more  full  collection  of  cases  on  this  clause  of  the  statute,  sec 
2  Parsons  on  Con.  31G  et  scq. 


76  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  VII. 

which  was  intended  to  be  so,  and  was  received  as  such,  and 
which  actually  put  the  goods  within  the  reach  and  power  of  the 
buyer,'  The  symbolical  deliveries  before  mentioned,  as  the  de- 
livery of  the  key  of  a  warehouse,^  or  an  entry  in  the  books  of  the 
warehouse  keeper,^  or  indorsement  and  delivery  of  a  bill  of 
lading,  or  even  of  a  receipt,  in  many  cases,^"or  a  delivery  of  a 
part  of  one  whole,  without  the  intention  of  separating  it  from  the 
rest,  are  sufficient.^  But  some  of  many  distinct  and  severable 
things  may  be  delivered  without  this  operating  as  a  delivery  of 
the  rest;^  nor  is  the  delivery  of  a  sample  sufficient,  unless  it  be 
delivered  as  a  part  of  the  tjiing  sold."  The  subject  of  delivery 
has  also  been  considered  in  the  chapter  on  Sales. 

If  the  buyer  receives  the  goods,  but  reserves  the  right  of  return- 
ing them  and  rescinding  the  sale  if  they  are  not  satisfactory,  or 
as  represented,  this  we  should  hold  to  be  a  conditional  acceptance, 
which  does  not  suffice  to  take  the  case  out  of  the  statute,  until 
this  reserved  right  be  extinguished  by  lapse  of  time  or  otherwise. 
But  there  has  been  much  litigation  on  this  question,  and  there  is 
still  some  uncertainty.^ 

"Earnest"  must  be  given  and  received  as  such  to  make  the 
sale  valid  under  that  clause  of  the  statute.  And  the  part-payment 
must  be  actual,  and  not  a  mere  agreement  that  something  else, 
as  a  discharge  of  an  existing  debt,  shall  be  taken  as  part- 
payment.^ 

1  Phillips  V.  Bistolli,  2  B.  &  Cr.  511  ;  Dole  v.  Stimpson,  21  Pick.  384  ;  Tempest  v. 
Fitzgerald,  3  B.  &  Aid.  680 ;  Howe  v.  Palmer,  3  B.  &  Aid.  321  ;  Maberley  v.  Shep- 
pard,  10  Bing.  99 ;  Carter  v.  Toussaint,  5  B.  &  Aid.  855  ;  Baldey  v.  Parker,  2  B.  & 
Cr.  37 ;  Bill  v.  Bament,  9  M.  &  \V.  41  ;  Shindler  v.  Houston,  1  Denio,  48,  1  Comst. 
261. 

2  Wilkes  V.  Ferris,  5  Johns.  335 ;  Chappel  v.  Marvin,  2  Aik.  79. 
•^  Harman  v.  Anderson,  2  Campb.  243. 

*  Peters  v.  Ballister,  3  Pick.  495  ;  Wilkes  v.  Ferris,  5  Johns.  335;  Searle  v.  Keevcs, 

2  Esp.  598  ;  Harman  v.  Anderson,  2  Campb.  243  ;  Withers  v.  Lyss,  4  id!  237  ;  Tucker 
t'.  Ruston,  2  C.  &  P.  86.     But  see  Farina  v.  Hone,  16  M.  &  W.  119 ;  Bcntall  v.  Burn, 

3  B.  &  Cr.  423 ;  Lackington  v.  Atherton,  7  M.  &  Gr.  360.     And  see  ante,  p.  44,  n.  4. 

'">  Slubey  v.  Heyward,  2  H.  Bl.  504  ;  Hammond  v.  Anderson,  4  B.  &  P.  69  ;  Elliott 
V.  Thomas,  3  M.  &  W.  170 ;  Scott  v.  The  Eastern  Counties  Railway  Co.  12  M.  &  VV. 
33  ;  Biggs  v.  Wisking,  25  E.  L.  &  Eq.  257;  Mills  v.  Hunt,  20  Wend.  431 ;  Davis  v. 
Moore,  13  Maine,  424. 

«  Price  V.  Lea,  1  B.  &  Cr.  156 ;  Sevmour  v.  Davis,  2  Sandf.  239. 

7  Talver  v.  West,  Holt,  N.  P.  178;' Johnson  v.  Smith,  Anthon,  N.  P.  60,  81,  2d  Ed. : 
Hinde  v.  Whitehouse,  7  East,  558. 

**  See  per  Parke,  J.,  in  Smith  v.  Surman,  9  B.  &  Cr.  561,  577 ;  Norman  v.  Phillips, 
14  M.  &  W.  277  ;  Howe  v.  Palmer,  3  B.  &  Aid.  321 ;  Hanson  v.  Armitagc,  5  B.  «&  Aid. 
557;  Acebal  w.  Levy,  10  Bing.  376 ;  CunlifTe  v.  Harrison,  G  Exeh.  903;  Curtis  v. 
Pugh,  10  Q.  B,  511 ;  Morton  v.  Tibbctt,  15  Q.  B.  428 ;  Hunt  v.  Hecht.  20  E.  L.  &  Eq. 
524. 

3  Walker  v.  Nussey,  16  M.  &  W.  302, 


CH.  VII.]  OF   THE   STATUTE   OF   FRAUDS.  77 

SECTION   V. 
OF    THE   FORM   AKD   SU15JECT-MATTEU   OF   THE   AGREEMENT. 

The  "  agreement"  must  be  in  writing;  but  generally,  in  this 
country,  the  writing  need  not  contain  or  express  the  considera- 
tion, which  may  be  proved  otherwise.'  Nor  need  it  be  all  on 
one  piece  of  paper.  For  it  is  sufficient  if  on  several  pieces,  as  in 
several  letters,  which,  however,  relate  to  one  and  the  same  busi- 
ness, and  may  fairly  be  read  together  as  the  statement  of  one 
transaction.^ 

The  "signature"  may  be  in  any  part  of  the  paper — the  begin- 
ning, middle,  or  end,^  except  in  those  of  our  States  in  which  the 
statute  has  the  word  "  subscribed  "  instead  of  "  signed  ;  "  in  which 
case  it  must  be  in  the  usual  place  at  the  bottom.*  If  the  name 
and  the  agreement  be  printed^  it  is  sufficient ;  ^  hence,  a  printed 
shop  bill,  with  the  name  of  the  seller,  as  usual,  at  the  beginning, 
if  delivered  to  the  buyer,  is  sufficient  to  charge  the  seller  in  an 
action  for  refusing  to  deliver  the  goods.*^ 

Shares  in  railroad  companies,  manufacturing  companies,  and, 
we  think,  in  all  corporations  and  joint-stock  companies,  are 
"  goods,  wares,  or  merchandises,"  within  the  statute.''' 

1  Packard  v.  Eichardson,  17  Mass.  122;  Sage  y.  Wilcox,  6  Conn.  81;  Tufts  v. 
Tufts,  3  Wood.  &  M.  456  ;  Keed  v.  Evans,  17  Ohio,  128;  Gillighan  v.  Boardman,  29 
Maine,  79.  But  in  some  of  ttie  States,  the  English  doctrine,  which  requires  the  consid- 
eration to  be  expressed  in  writing,  has  been  adopted.  See  Sears  v.  Brink,  3  Johns. 
210;  Bennett  v.  Pratt,  4  Dcnio,  275  ;  Staats  v.  Howlett,  id.  559;  Wyman  v.  Grav,  7 
H.  &  Johns.  409;  Elliott  v.  Giese,  id.  457  ;  Edelen  v.  Gough,  5  Gill,  103. 

=*  Brettel  v.  Williams,  4  Exch.  623  ;  Tawney  v.  Crowther,  3  Bro.  C.  C.  318;  Saunder- 
son  V.  Jackson,  2  B.  &  P.  238  ;  Eorster  v.  Hale,  3  Ves.  696;  Ide  v.  Stanton,  15  Vt. 
685. 

8  Propert  v.  Parker,  1  Rus.  &  M.  625 ;  Johnson  v.  Dodgson,  2  M.  &  W.  653  ;  Mer- 
ritt  V.  Clason,  12  Johns.  102;  S.  C.  nom.  Clason  r.  Bailey,  14  id.  484;  Saunderson  v. 
Jackson,  2  B.  &  P.  238.  But  if  the  signature  be  only  at  the  beginning  or  in  the  body 
of  the  instrument,  and  it  cannot  be  reasonably  inferred  from  the  whole  agreement  and 
the  circumstances  of  the  case,  that  it  was  placed  there  for  the  purpose  of  rendering  the 
agreement  binding,  it  will  not  be  sufficient.  Stokes  v.  Moore,  1  Cox,  219;  Cabot  v. 
Haskins,  3  Pick.  83;  Cowie  v.  Remfry,  10  Jur.  789. 

*  Davis  V.  Shields,  24  Wend.  322,  26  id.  341  ;  Viclie  v.  Osgood,  8  Barb.  130.  But 
see  James  i'.  Patten,  id.  344. 

0  Saunderson  v.  Jackson,  3  Esp.  180,  2  B.  &  P.  238. 

^  Schneider  v.  Norris,  2  M.  &  S.  286. 

7  Tisdale  v.  Harris,  20  Pick.  9  ;  Colvin  t-.  Williams,  3  H.  &  Johns.  38 ;  North  v. 
Forest,  15  Conn.  400.  It  is  held  otherwise  in  England.  Humble  v.  Mitchell,  11  Ad. 
&  El.  205  ;  Duncuft  v.  Albrecht,  12  Sim.  189. 

7* 


78  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  VII. 

We  think  —  in  opposition  to  certain  authorities,  but  in  ac- 
cordance with  those  of  more  recent  date  —  that  an  executory 
contract  for  sale  is  within  the  statute.^  So  a  contract  for  an 
article  not  now  the  seller's,  or  not  existing,  and  which  must 
therefore  be  bought  or  manufactured  before  it  can  be  delivered, 
will  also  be  within  the  statute,  if  it  may  be  procured  by  the 
seller  by  purchase  from  any  one,  or  manufactured  by  himself 
at  his  choice,  the  bargain  being,  in  substance  as  well  as  form, 
only  that  the  seller  shall,  on  a  certain  day,  deliver  certain 
articles  to  the  buyer  for  a  certain  price.^  But  if  the  bargain 
be  rather  that  the  one  party  shall  make  a  certain  article,  and 
deliver  it  to  the  other  party  who  shall  thereupon  pay  him  for  his 
materials,  skill,  and  labor,  this  is  not  a  contract  of  or  for  sale,  but 
an  agreement  to  hire  and  pay  for  work  and  labor,  —  or  to  em- 
ploy that  party  in  a  certain  way ;  and  it  is  not  within  the 
Statute  of  Frauds  as  a  contract  for  the  sale  of  goods,  wares,  or 
merchandises.'^ 

The  operation  of  the  statute  in  the  clauses  we  have  considered, 
is  not  to  avoid  the  contract,  but  only  to  inhibit  and  prevent 
actions  from  being  brought  upon  it.  In  all  other  respects,  it  is 
valid.* 

It  may  be  further  remarked  that  the  operation  of  the  statute 


1  Rondeau  v.  Wyatt,  2  11.  Bl.  63  ;  Cooper  v.  Elston,  7  T.  R.  14 ;  Bennett  v.  Hull, 
10  Johns.  364 ;  Jackson  v.  Covert,  5  Wend.  139  ;  Downs  v.  Ross,  23  id.  270 ;  Garbutt 
V.  Watson,  5  B.  &  Aid.  613 ;   Smith  v.  Siirman,  9  B.  &  Cr.  561. 

2  See  next  note.  But  see,  contra,  Sewall  v.  Fitch,  8  Cow.  215;  Robertson  v. 
Vaughn,  5  Sandf.  1. 

*  Might  V.  Ripley,  19  Maine,  137  ;  Gardner  v.  Joy,  9  Met.  177 ;  Mixer  v.  Howarth, 
21  Pick.  205;  Spencer  v.  Cone,  1  Met.  283;  Lamb  v.  Crafts,  12  id.  353  ;  Waterman 
V.  Meigs,  4  Cush.  497  ;  Watts  v.  Friend,  10  B.  &  Cr.  446.  In  Might  v.  Ripley,  supra, 
Shepley,  C.  J.,  said  :  "  It  may  be  considered  as  now  settled  that  the  Statute  of  Frauds 
embraces  executory  as  well  as  executed  contracts  for  the  sale  of  goods.  But  it  does 
not  prevent  parties  from  contracting  verbally  for  the  manufacture  and  delivery  of 
articles.  The  only  difficulty  now  remaining  is,  to  decide  whether  the  contract  be  one 
for  the  sale,  or  for  the  manufacture  and  delivery  of  the  article.  It  may  provide  for  the 
application  of  labor  to  materials  already  existing  partially  or  wholly  in  the  form  de- 
signed, and  that  the  article  improved  by  the  labor  shall  be  transferred  from  one  party 
to  the  other.  In  such  cases,  there  may  be  difficulty  in  ascertaining  the  intentions  ;  and 
the  distinction  may  be  nice,  whether  it  be  a  contract  for  sale  or  for  manufacture.  .  .  . 
A  contract  for  the  manufocture  of  an  article  differs  from  a  contract  of  sale  in  this ;  the 
person  ordering  the  article  to  be  made,  is  under  no  obligation  to  receive  as  good  or 
even  a  better  one  of  the  like  kind  purchased  from  another,  and  not  made  for  him.  It 
is  the  peculiar  skill  and  labor  of  the  other  party,  combined  with  the  materials,  for  which 
he  contracted,  and  to  which  he  is  entitled." 

4  Cahill  V.  Bigelow,  18  Pick.  369;  Dowdle  v.  Camp,  12  John.  451;  Souch  v. 
Strawbridge,  2  C.  B.  808;  Crane  v.  Gough,  4  Maryland,  316;  Leroux  v.  Brown,  14 
E.  L.  &  Eq.  247.  In  this  last  case,  the  plaintiff,  who  was  a  resident  of  Calais,  in 
France,  entered  into  a  parol  agreement  with  the  defendant,  who  resided  in  England, 


en.  VII.]  OP   TUE    STATUTE   OF   FRAUDS.  79 

has  been  always  limited  to  such  executory  contracts  as  have  not 
been  executed  in  any  substantial  part.^ 

to  serve  him  as  clerk  and  agent  for  one  year,  from  a  fiit'ire  day ;  and  it  was  held  that 
the  case  came  within  tlie  Statute  of  Frauds,  and  that  an  action  on  the  contract  could  not 
bo  maintained  in  England;  but  tiiat  this  decision  did  not  prevent  the  plaintiff  from 
enforcing  the  agreement  by  a  bill  in  ccjuity,  or  by  an  action  on  the  contract  in  France; 
that  the  statute  does  not  say  that  the  contract  is  void ;  but  only  that  "  no  action  shall 
be  brought  upon  it."  Jervis,  C.  J.,  said :  "  I  am  of  opinion  that  this  rule  must  be  made 
absolute.  There  has  been  no  discussion  at  the  bar  as  to  the  principles  which  ought  to 
govern  our  decision.  It  is  admitted  by  the  plaintitl"'s  counsel,  that  if  the  4th  section  of 
the  Statute  of  Frauds  applies,  not  to  the  validity  of  the  contract,  but  only  to  the  mode 
of  procedure  upon  it,  then  that,  as  there  is  no  "agreement,  or  memorandum,  or  note 
thereof"  in  writing,  this  action  is  not  maintainable.  On  the  other  hand,  it  is  not  denied 
that,  if  that  section  ajiplies  to  the  contract  itself,  or,  as  Boullenois  says,  to  the  "  solem- 
nities of  the  contract,"  inasmuch  as  our  law  does  not  affect  to  regulate  foreign  con- 
tracts, the  action  is  maintainable.  On  consideration,  I  am  of  opinion  that  the  4th 
section  does  not  apply  to  the  '•  solemnities"  of  the  contract,  but  to  the  proceedings  upon 
it;  and  therefore,  that  this  action  cannot  be  maintained.  The  4th  section,  looked  at  in 
contrast  with  the  1st,  2d,  3d,  and  17th,  leads  to  this  conclusion.  The  words  are :  "No 
action  shall  be  brought  whereby  to  charge  any  person  upon  any  agreement  that  is  not 
to  be  performed  witliin  the  space  of  one  year  from  the  making  thereof,  unless  the  agree- 
ment upon  which  such  action  shall  be  brought,  or  some  memorandum  or  note  thereof, 
shall  be  in  writing,  and  signed  by  the  party  to  be  charged  therewith,  or  some  other 
person  thereto  by  him  lawfully  authorized."  It  does  not  say  that,  unless  those  requi- 
sites are  complied  with,  the  contract  shall  be  void,  but  only  that  "  no  action  shall  be 
brought  upon  it;"  and,  as  put  by  Mr.  Honyman  with  great  force,  the  alternative  re- 
quiring the  "agreement  or  some  memorandum  thereof"  to  bei  in  writing,  shows  that 
the  legislature  contemplated  a  contract,  good  before  any  writing,  but  not  enforceable 
without  the  writing  as  evidence  of  it.'.' 

'  Stone  y.  Dennison,  13  Pick.  1  ;  Davenport  v.  Mason,  15  Mass.  85,  93;  Cocking  v. 
Ward,  1  C.  B.  858  ;  Kelly  v.  Webster,  12  id.  283.     And  see  2  Parsons  on  Con.  319. 


80  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VIII. 


CHAPTER   VIII. 
OF  PAYMENT. 

SECTION  I. 

now   PAYMENT   MAY   BE   MADE. 

The  obligations  which  arise  out  of  many  mercantile  contracts 
are  to  be  satisfied  by  payment  of  money.  The  parties  may  al- 
ways agree  to  any  specific  manner  of-  payment,  and  then  that 
becomes  obligatory  on  the  creditor  as  well  as  the  debtor.  As,  by 
deducting  the  amount  to  be  paid  from  a  debt  due  to  the  debtor 
either  from  the  creditor  or  from  any  one  else.^  Or  the  amount 
may  be  made  by  agreement  payable  by  a  bill  or  note.  If  the 
debt  is  to  be  paid  by  a  bill,  it  must  be  such  a  bill  as  is  agreed 
upon,  and  this  must  be  tendered  by  the  debtor.  But  the  word 
"bill"  does  not  necessarily  mean  an  "approved  bill;"  and  if  this 
phrase  be  itself  used,  it  means  only  a  bill  to  which  there  is  no 
reasonable  objection.^ 

In  the  absence  of  any  especial  agreement,  the  only  payment 
known  to  the  law  is  by  cash,  which  the  debtor  must  pay  when 
it  is  due,  or  tender  to  the  creditor. 

The  tender  should,  properly,  be  in  cash,  and  must  be  so  if  that 

1  Owens  V.  Denton,  5  Tyrwh.  360.  So,  also,  an  agreement  that  goods  furnished  by 
the  debtor  shall  go  in  satisfaetion  of  the  debt,  is  equivalent  to  an  actual  payment. 
Hoo]icr  V.  Stephens,  4  Ad.  &  El.  71  ;  Hart  v.  Nash,  2  Cr.  M.  &  Eos.  337. 

-  Thus,  in  Hodgson  v.  Davies,  2  Campb.  530,  which  was  an  action  for  refusing  to 
deliver  goods  purchased  by  the  plaintiff  of  the  defendant,  to  be  paid  bi/  bill,  the  plaintiff 
proved  that  he  had  tendered  his  own  acceptances  in  payment;  whereupon  the  defend- 
ant offered  to  call  witnesses  to  prove  that  by  bill  is  meant  an  approved  bill,  and  that  the 
seller  is  not  bound  to  deliver  the  goods,  unless  he  approves  of  the  bill  offered  in  pay- 
ment by  the  purchaser.  Hut  luord  Etlenborouc/k  said:  "I  cannot  receive  the  evidence. 
The  contract  must  speak  for  itself  Even  if  the  phrase  approved  bill  were  introduced,  I 
think  it  could  only  mean  a  bill  to  which  no  reasonable  objection  could  be  made,  and 
which  ought  to  be  approved.  To  allow  the  seller  in  an  arbitrary  manner  to  repudiate 
the  bill,  would  be  to  enable  him,  according  to  his  interest  or  caprice,  to  annul  a  con- 
tract by  which  the  purchaser  is  absolutely  bound." 


en.  VIII.]  OF   PAYMENT.  81 

is  required  ;  but  a  lender  in  good  and  current  bank-bills  is  sufli- 
cicnt,  unless  it  be  objected  to*because  they  are  not  money. ^ 

Generally,  if  the  tender  be  refused  for  any  express  and  specific 
reason,  the  creditor  cannot  afterwards  take  advantage  of  any 
informalUi/,  to  which  he  did  not  object  at  the  time  of  the  tender.^ 

The  tender  may  be  of  a  larger  sum  than  is  due.-^  But  a  tender 
of  a  larger  sum  with  a  requirement  of  change  or  of  the  balance, 
is  not  good.'^  Nor  must  it  be  accompanied  with  a  demand  or 
condition  that  any  instrument  or  document  shall  be  delivered; 
nor  that  the  sum  tendered  shall  be  received  as  all  that  is  due; 
nor  that  a  receipt  in  full  shall  be  given.^  But  it  seems  that  a 
simple  receipt  for  so  much  money  paid  may,  perhaps,  be  de- 
manded.^  We  have  already  seen  that,  if  a  receipt  be  given,  it  is 
only  primd  facie  and  strong  evidence  of  payment,  but  not  con- 
clusive. And  even  if  it  be  "  in  full  of  all  demands,"  it  is  still 
open  to  explanation  or  denial  by  evidence.''' 

A  lawful  tender,  and  payment  of  the  money  into  court,  is  a 
good  defence  to  an  action  for  the  debt.^  But  the  creditor  may 
break  down  this  defence  by  proving  that  he  demanded  the  money 
of  the  debtor,  and  the  debtor  refused  to  give  it,  subsequently  to 
the  tender.^ 


'  Snow  V.  PeiTV,  9  Pick.  542 ;  Warren  v.  Mains,  7  Johns.  476  ;  Hoyt  v.  Byrnes,  2 
Fairf.  475;  Tilcv  r.  Courtier,  2  Cr.  &  J.  IG,  n.;  Wright  v.  Reed,  3  T.  R.  554;  Polglass 
V.  Oliver,  2  Cr.  &  Jer.  15. 

^  Cole  V.  Blake,  Peake,  179;  Richardson  v.  Jackson,  8  M.  &  W.  29« ;  Bull  v. 
Parker,  2  Dowl.  N.  S.  345. 

"  Astlcy  V.  Reynolds,  2  Strange,  916;  Wade's  case,  5  Rep.  115;  Dean  v.  James,  4 
B.  &  Ad.  546  ;  Douglas  v.  Patrick,  3  T.  R.  683  ;  Black  r.  Smith,  Peake,  88  ;  Cadraan 
V.  Lubbock,  5  D.  &  R.  289  ;  Bevans  v.  Rees,  5  M.  &  W.  306. 

*  Bettcrbee  v.  Davis,  3  Campb.  70.  And  see  Robinson  v.  Cook,  6  Taunt.  336  : 
Blow  V.  Russell,  1  C.  &  P.  365. 

5  Thus,  in  Glasscott  v.  Day,  5  Esp.  48,  the  sum  claimed  by  the  plaintiff'  was  £20. 
The  defendant  pleaded  non  assumpsit,  except  as  to  .£18,  and  as  to  that,  a  tender.  The 
witness  for  the  defendant,  who  proved  the  tender,  stated  that  he  went  to  the  plaintiff" 
with  the  money,  which  he  offered  to  pay  on  the  plaintiff"'s  giving  him  a  receipt  in  full. 
The  plaintiff"  refused  to  receive  it.  And  Lord  Ellenhorough  held  this  not  to  be  a  good 
tender.  So,  in  Thayer  v.  Brackett,  12  Mass.  450,  where  the  defendant,  upon  making  a 
tender,  demanded  a  receipt  in  full,  Parker,  C.  J.,  said :  "  The  defendant  lost  the  benefit 
of  his  tender  by  insisting  on  a  receipt  in  full  of  all  demands,  which  the  plaintiff"  was 
not  obliged  to  give  him.  The  defendant  should  have  relied  on  his  tender,  and  upon 
proof  at  the  trial  that  no  more  M'as  due.  But  he  withdrew  the  tender,  because  the 
plaintiff"  would  not  comply  with  the  terms  which  accompanied  it.  This  cannot  be 
deemed  a  lawful  tender." 

^  See  2  Parsons  on  Contracts,  pp.  155,  156,  n.  (/. ) 

"  See  ante,  p.  23,  n.  1. 

»  Dixon  V.  Clark,  5  C.  B.  365 ;  Waistell  v.  Atkinson,  3  Bing.  290  ;  Law  v.  Jackson, 
9  Cow.  641  ;  Carlev  v.  Vance,  17  Mass.  389 ;  Cornell  r.  Green,  10  S.  &  R.  14 ;  Goff"  v. 
Rehoboth,  2  Cush.475. 

^  See  cases  supra. 


82  ELEMENTS   OF  MERCANTILE   LAW.  [CH.   VIII. 

If  the  buyer  or  debtor  give,  and  the  seller  or  creditor  receive,  a 
negotiable  note  or  bill  for  the  sufti  due,  this  is  not  anywhere 
absolute  and  conclusive  payment.  In  Maine  and  in  Massachu- 
setts the  law  presumes  that  such  note  or  bill  is  payment  of  the 
debt,  unless  a  contrary  intention  is  shown.'  In  England,  in  the 
other  States  of  this  Union,  and  in  the  Supreme  Court  of  the 
United  States,  it  is  not  payment  unless  the  intention  of  the  par- 
ties that  it  should  be  so,  is  shown.^  In  New  York,  it  has  been 
held  that  the  debtor's  own  promissory  note  is  not  payment,  even 
if  it  be  intended  or  expressly  agreed  that  it  should  be.^  If  a 
creditor  who  receives  from  his  debtor  any  bill  or  note,  negotiates 
or  sells  it  for  value  to  a  third  party,  without  making  himself 
liable,  it  is  still  payment  although  it  be  dishonored,  because  it 
has  been  good  to  him  and  he  has  received  the  avails  of  it;  and 
if  it  is  not  held  payment,  he  can  recur  to  his  original  debtor,  and 
then  he  will  have  the  value  of  the  bill,  or  payment,  twice.*  Not 
so,  however,  if  he  negotiates  it  in  such  a  way  as  to  make  himself 
liable  upon  it.^ 


SECTION  II. 

OF   APPROPRIATION   OF   PAYMENT. 

If  one  who  owes  several  debts  to  his  creditor,  makes  to  him  a 
general  4:>ayment,  it  maybe  an  important  question  to  which  of 
those  debts  this  payment  shall  be  appropriated;  for  some  of  them 
may  be  secured,  and  others  not,  or  some  of  them  carry  interest, 
and  others  not,  or  some  of  them  be  barred  by  the  Statute  of 
Limitations,  and  others  not. 

There  is  no  doubt  that  the  payor  may  appropriate  his  pay- 
ment, at  the  time  of  the  payment,  at  his  own  pleasure.*^     And  if 

1  Ilsley  V.  Jewctt,  2  Met.  168;  Butts  v.  Dean,  id.  76 ;  Watkins  v.  Hill,  8  Pick.  522  : 
Varner  v.  Noblcborougli,  2  Greenl.  [Bennett's  cd.]  121,  and  n.  («) ;  Bangor  v.  Warren, 
3-1  Maine,  324 ;  Fowler  v.  Ludwig,  id.  455  ;  Shuinway  v.  Reed,  id.  560. 

2  Peter  v.  Beverly,  10  Pet.  567  ;  Wallace  v.  Agry,  4  Mason,  336  ;  Van  Ostrand  v. 
Reed,  1  Wend.  424  ;  Burdick  i-.  Green,  15  Johns.  247 ;  Hughes  v.  Wheeler,  8  Cow.  77  : 
Bill  V.  Porter,  9  Conn.  23. 

3  Frisbie  v.  Larned,  21  Wend.  450;  Cole  v.  Sackett,  1  Hill,  516  ;  Waydell  v.  Lucr, 
5  Hill,  448,  3  Dcnio,  410. 

4  Bunncy  v.  Poyntz,  4  B.  &  Ad.  568. 

5  Miles  V.  Gorton,  4  Tyrwh.  295. 

*>  Cremer  v.  Iligginson,  1  Mason,  333;  Tayloe  v.  Saudiford,  7  Wheat.  13;  West 
Branch  Bank  v.  Moorehead,  5  W.  &  S.  542;  Stone  v.  Seymour,  15  Wend.  19;  New- 
march  V.  Clay,  14  East,  239 ;   Shaw  v.  Picton,  4  B.  &  Cr.  715. 


CH.  VIII.]  OF   PAYMENT.  83 

he  does  not  exercise  this  right,  ]Derhaps  it  is  as  certain  that  the 
receiver  may,  at  the  time  of  payment,  make  the  appropriation.^ 
But  if  neither  party  does  this  at  thai  time,  and  at  a  future  period 
the  question  comes  up  as  to  wiiich  party  may  then  make  the  ap- 
propriation, or  rather,  how  the  law  will  then  appropriate  the  pay- 
ment, there  is  more  difficulty .^  Upon  the  whole,  we  should  pre- 
fer to  state,  as  the  better  and  prevailing  rule,  that,  if  the  court 
can  ascertain,  either  from  the  words  used,  or  from  the  circum- 
stances of  the  case,  or  from  any  usage,  what  was  the  intention 
and  understanding  of  the  parties  at  the  time  of  the  payment, 
that  intention  will  be  carried  into  effect.  And  if  this  cannot  be 
ascertained,  then  the  court  will  direct  such  appropriation  of  the 
payment  as  will  best  protect  the  rights  and  interests  of  both 
parties,  and  do  justice  between  them.'^  And  one  reason  for  this 
conclusion  would  be,  that  the  law  would  presume  that  this  was 
the  original  intention  of  the  parties. 

1  Peters  V.  Anderson,  5  Taunt.  596 ;  Bosanquet  v.  Wray,  6  id.  597 :  Goddard  v. 
Cox,  2  Strange,  1194;  Plomer  v.  Long,  I  Stark.  153  ;  Marryatts  v.  White,  2  id.  101. 

-  In  England,  it  seems  to  be  held  tlia,t  the  creditor  need  not  make  the  appropriation 
at  the  time  of  the  payment,  but  may  do  it  at  any  time  before  the  trial.  Thus,  in  Simp- 
son V.  Ingham,  2  B.  &  Cr.  75,  Best,  J.,  said  :  "  It  is  true  that  Sir  William  Grant  says, 
in  Clayton's  case,  that,  by  the  civil  law,  the  application  is  given  first  to  the  debtor,  and 
then  to  the  creditor,  and  that  as  well  the  creditor  as  the  debtor  must  make  his  election 
at  the  time  of  payment;  and  that,  unless  election  be  immediately  made,  the  law  will 
appropriate  it  in  discharge  of  the  most  burdensome,  and  if  all  arc  equally  burdensome, 
of  the  oldest  debts.  But,  according  to  the  cases  there  cited,  our  law  docs  not  require 
of  the  creditor  an  instant  decision.  I  think  that  he  has  a  reasonable  time  to  decide,  to 
which  account  he  will  place  a  sum  that  has  been  paid  him  without  any  application  of 
it  by  his  debtor."  And  see  the  later  case  of  Philpott  v.  Jones,  2  Ad.  &  El.  41,  where 
Taunton,  J.,  said  the  creditor  might  make  the  application  "  at  any  time  before  the  case 
came  under  the  consideration  of  a  jury." 

^  Field  V.  Holland,  6  Cranch,  8,  27  ;  United  States  ?;.AVardwen,  5  Mason,  82  ;  Smith 
y.  Loyd,  11  Leigh,  512;  Callahan  v.  Boarman,  21  Ala.  246  ;  United  States  r.  Kirk- 
patrick,  9  Wheat.  720,  737.  In  this  last  case,  the  defendants  were  obligees  of  a  bond 
to  indemnify  the  plaintit!s  against  any  loss  by  their  collector  during  the  period  of  his 
first  commission ;  and  a  question  arose  whether  the  plaintiffs  could  appropriate  pay- 
ments, made  by  the  collector  during  that  time,  to  debts  accruing  subsequently.  Storj/, 
J.,  said  :  "  The  general  doctrine  is,  that  the  debtor  has  a  right,  if  he  pleases,  to  make 
the  appropriation  of  payments ;  if  he  omits  it,  the  creditor  may  make  it ;  if  both  omit 
it,  the  law  will  apply  the  payments  according  to  its  own  notions  of  justice.  It  is  cer- 
tainly too  late  for  either  party  to  claim  a  right  to  make  an  appropriation,  after  the  con- 
troversy has  arisen,  and  a  fortiori  at  the  time  of  the  trial.  In  cases  like  the  present,  of 
long  and  running  accounts,  where  debits  and  credits  arc  perpetually  occurring,  and  no 
balances  are  otherwise  adjusted  than  for  the  mere  purpose  of  making  rests,  we  are  of 
the  opinion  that  payments  ought  to  be  applied  to  extinguish  the  debts  according  to  the 
priority  of  time;  so  that  the  credits  are  to  be  deemed  payments  pro  tanto  of  the  debts 
antecedently  due." 


84  ELEMENTS   OP  MERCANTILE  LAW.  [CH.  IX. 


CHAPTER   IX. 

OF   NEGOTIABLE   PAPER, 
SECTION  I. 

OF    THE   PURPOSE   OF    AND    PARTIES    TO   BILLS   AND   NOTES. 

Where  and  when  bills  of  exchange  were  invented,  is  not 
certainly  known.  They  were  not  used  by  any  ancient  nations, 
but  have  been  employed  and  recognized  by  most  commercial 
nations  for  some  centuries.  A  still  more  recent  invention  is  the 
promissory  negotiable  note,  which,  however,  in  this  country,  for 
inland  and  domestic  purposes,  has  taken  the  place  of  the  bill  of 
exchange  very  generally.  Besides  these  two,  bills  of  lading,  and 
some  other  documents,  have  a  kind  of  negotiability,  but  it  is 
quite  imperfect.^  The  utility  of  bills  and  notes  in  commerce 
arises  from  the  fact  that  they  represent  money,  which  is  the  re- 
presentative of  every  thing  else;  and  many  of  the  peculiar  rules 
respecting  negotiable  paper,  are  derived  from. and  intended  to 
make  this  representation  adequate  and  effectual. 

A  negotiable  bill  of  exchange  is  a  written  order  whereby  A 
orders  B  to  pay  to  C,  or  to  his  order,  or  to  bearer,  a  sum  of 
money,  absolutely  and  at  a  certain  time.     A  is  the  Drawer,  B 
•  the  Drawee,  and  C  the  Payee,  f  If  the  bill  is  presented  to  B,  and  / 
he  agrees  to  obey  the  order,  which  he  does  in  a  mercantile  way  ? 
by  writing  the  word  "accepted"  across  the  face  of  the  bill,  and 
also  writing  his  name  below  this  word,  the  drawee  then  becomesN 
the  Acceptor. ;  =  If  C,  the  payee,  choose  to  transfer  the  paper  and 
all  his  rights  under  it  to  some  other  person,  he  may  do  this  by 
writing  his  name  on  (usually  across)  the  back ;  this  is  called  in- 
dorsement, and   C  then  becomes  an   Indorser.     The  person   to 
whom  C  thus  transfers  the  bill,  is  an  Indorsee,     ^e  may  again 
transfer  the  bill  by  writing  his  name  below  that  of  the  former 
Indorser,  and  the  Indorsee   then  becomes  the  second  Indorser; 

1  See  Thompson  v.  Dominy,  14  M.  &  W.  403. 


en.  IX.]  OF  NEGOTIABLE   PAPER.  85 

and  this  process  may  go  on  indefinitely.  If  the  added  names 
cover  all  tlio  back  of  the  note,  a  piece  may  be  wafered  on  to  re- 
ceive more.  In  France,  this  added  piece  is  called  "  allonge^''  and 
this  word  is  used  in  some  text-books,  but  not  by  our  merchants. 

A  negotiable  promissory  note  is  .a  written  promise  to  pay  to  a 
certain  person  or  his  order,  or  to  bearer,  at  a  certain  time,  a  cer- 
tain sum  of  money.  He  who  signs  this  is  called  the  Maker  or 
the  Promisor;  the  other  party  is  the  Promisee  or  Payee.  The 
payee  of  such  a  note  has  the  same  power  of  indorsement  as  the 
payee  of  a  bill  of  exchange.  If  the  note  be  not  payable  to  any 
order,  nor  to  bearer,  it  is  then  not  negotiable ;  but  it  has  been 
held  that,  if  such  a  note  be  indorsed  by  the  payee,  payable  to 
some  person  or  his  order,  this  becomes  negotiable  as  between  the 
indorser  and  indorsee,  and  subsequent  parties.  Such  an  indorse- 
ment may  in  fact  be  regarded  as  a  bill  of  exchange,  drawn  bv 
the  payee  of  the  note  upon  the  maker,  in  favor  of  the  person  to 
whom  the  note  is  indorsed.'  The  maker  of  a  negotiable  note 
holds  much  the  same  position  as  the  acceptor  of  a  bill,  the 
drawer  much  the  same  as  the  first  indorser  of  a  note ;  that  is,  a 
party  holding  a  note  and  seeking  payment  of  it,  looks  first  to  the 
maker,  and  then  to  the  indorser.  One  holding  a  bill,  looks  first 
to  the  drawee  or  acceptor,  and,  on  his  failure,  to  the  drawer. 

Neither  indorsement  nor  acceptance,  nor,  indeed,  making,  are 
complete  until  delivery  and  reception  of  the  bill  or  note,  or  ac- 
ceptance ;  and  a  defendant  may  show  that  there  was  no  legal 
delivery  of  the  paper.- 

1  Lcidy  V.  Tammany,  9  Watts,  353;  Brenzer  v.  Wightman,  7  W.  «S;  S.  264;  Elkin- 
ton  r.  Fennimore,  13  Penn.  St.  173. 

-  Chamberlain  v.  Hopps,  8  Vt.  94  ;   Adams  v.  Jones,  12  Ad.  &  El.  455  ;    Brind  v. 
Hampshire,  1  M.  &  W.  365  ;   Marston  v.  Allen,  8  M.  &  W.  494  ;    Buckley  v.  Ilann,  5 
Exch.  43.    Perhaps,  however,  the  proposition  in  the  text  should  be  qualified  so  far  as 
regards  an  acceptance.    In  Regina  v.  Birch,  1  Lownd.  &  Max.  56,  S.  C,  nom.  Wilde  v. 
Sheridan,  11  Eng.  Law  and  Eq.  380,  where  an  acceptance  was  written  on  a  bill  in  Lon- 
don, and  the  bill  delivered  to  the  payee  in  Norwich,  and  the  question  was,  at  which  place   , 
Jhc  bill  was  accepted,  it  was  AcW,  per  Coleridge,  J.y  that  the  acceptance  of  a  bill,  though  ' 
revocable  at  any  time  before  delivery,  is,  if  unrevoked,  complete  as  soon  as  written  on// 
tliQ  bill;  and  the  contract  is  made  in  that  place  where  the  bill  is  accepted,  not  where  it    "> 
is  issued.    And  the  learned  judge  thus  distinguished  an  acceptance  from  an  indorse- 
ment:    "  One  purpose  of  an  indorsement  is  to  pass  the  property  in  the  bill,  and  that 
purpose  is  not  effected  until  actual  or  constructive  delivery. ;  But  the  acceptor  has  no 
property  in  the  bill,  either  before  or  after  an  acceptance ;  he  must  be  supposed  to  receive  . 
the  drawer's  paper,  and  on  it  to  write  his  promise,)-without  thereby  in  any  way  altering'-' 
the  property  in  the  bill.     He  may,  indeed,  before  any  communication  to  the  drawer  of 
the  act  done,  revoke  it,  according  to  Cox  v.  Troy,  5  B.  &  Aid.  474,  and  modern  autlior- 
ities ;  but  his  promise,  unless  so  revoked,  is  complete  and  takes  effect  from  the  time 
when  it  was  made."    And  see  Smith  v.  M'Clurc,  5  East,  476 ;  RoflF  v.  Miller,  19  Law  J. 
C.  P.  278,  which  suppoct  the  same  view. 

8 


8G  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

The  law  of  negotiable  paper  first  defines  a  bill  or  note,  and 
determines  what  instruments  come  under  these  names,  and  then 
describes  and  ascertains  the  duties  and  obligations  of  all  the  par- 
ties we  have  named  above.     We  shall  follow  this  order. 


SECTION  II. 

WUAT   IS   ESSENTIAL   TO    A   BILL   OK   NOTE. 

1.  That  the  promise  be  absolute  and  definite. —  The  promise  of 
the  note,  and  the  order  of  the  bill,  must  be  absolute.  Words 
expressive  of  intention  in  the  one  case,  or  a  request  which  im- 
ports only  to  ask  a  favor,  in  the  second  case,  are  insufficient.'  But 
no  one  word,  and  no  set  of  words,  is  absolutely  necessary ;  if 
from  all  the  language  the  distinct  promise  or  positive  order  can 
be  inferred,  that  is  sufficient.^ 

The  time  of  payment  is  usually  written  in  a  bill  or  note ;  if 
not,  it  is  payable  on  demand.  The  time  of  payment  must  not 
be  uncertain ;  therefore,  a  promise  is  insufficient  if  it  be  to  pay 
on  one's  marriage,  or  if  certain  terms  are  complied  with,  or  on 
the  sale  of  certain  goods,  or  at  thirty  days  after  the  arrival  of  a 
ship,  or  out  of  a  certain  expected  payment  when  it  should  be 
made.3  But  if  it  distinctly  refers  to  an  event  which  must  hap- 
pen, as  to  one's  death, it  has  been  held  good;*  and  this  has  been 
extended  to  the  paying  off  of  the  crew  of  a  public  vessel ;  ^  but 
we  doubt  the  soundness  of  this  decision.  In  fact,  any  contin- 
gency apparent  on  the  face  of  the  instrument,  defeats  it ;  and  the 
happening  of  the  contingency  does  not  cure  it.  And  the  pay- 
ment promised  or  ordered  must  be  of  a  definite  sum  of  money ; 
and,  therefore,  a  promise  to  pay  a  certain  sum  "  and  all  fines,"  is 

1  Thus,  in  Little  v.  Slackford,  M.  &  Malk.  171,  a  paper  in  these  words,  "Mr.  L., 
please  to  let  the  bearer  have  £7,  and  place  it  to  my  account,  and  you  will  oblige  your 
humble  servant,  R.  S.,"  was  held,  by  Lord  Tenierden,  not  to  be  a  bill  of  exchange. 
And  see  Home  v.  Redfearn,  4  Bing.  N.  C  433. 

2  See  Morris  v.  Lee,  2  Ld.  Raym.  1396  ;  Ellison  v.  CoUingridge,  9  C.  B.  570;  Allen 
V.  The  Sea  Fire  and  Life  Ins.  Co.  id.  574. 

3  Beardesley  v.  Baldwin,  2  Strange,  1151  ;  Pearson  v.  Garrett,  4  Mod.  242 ;  Roberts 
V.  Peake,  1  Burr.  323  ;  Hill  v.  Halford,  2  B.  &  P.  413 ;  Clarke  v.  Percival,  2  B.  &  Ad. 
660 ;  Palmer  v.  Pratt,  2  Bing.  185  ;  Haydock  v.  Lynch,  2  Ld.  Raym.  1563  ;  Shelton  v. 
Bruce,  9  Yerg.  24  ;  De  Forest  v.  Frary,  6  Cow.  151. 

*  Cooke  V.  Colehan,  2  Strange,  1217  ;  Goss  v.  Nelson,  1  Burr.  226. 

5  Andrews  v.  Franklin,  1  Strange,  24 ;  Evans  v.  Underwood,  1  Wils.  202. 


CH.  IX.]  OF  NEGOTIABLE  PAPER.  87 

not  a  promissory  note.^  Bat  if  the  contingency  be  wholly  in  the 
payee's  power,  the  note  may  still  be  good;  thus,  a  promise  to 
pay  a  sum,  with  interest,  in  twelve  months  after  notice,  was  held 
a  good  note.2  The  promise  or  order  to  pay  out  of  a  certain  fund, 
is  not  fatal,  if  this  be  merely  descriptive  or  directory  i^  but  if  it 
must  or  should  be  construed  as  making  the  payment  depend 
upon  the  fund,  however  ample  and  certain  that  may  seem,  it  is 
a  fatal  contingency.*  So,  an  order  to  pay  rents  accruing  to  a 
certain  time,  or  to  pay  over  a  sum  out  of  money  collected  by  an 
attorney,  or  an  order  drawn  on  the  treasury  by  a  public  officer,  is 
not  a  bill  of  exchange.^  Nor  is  a  bill  drawn  by  one  government 
upon  another  for  a  treaty-payment,  subject  to  the  law-merchant 
as  a  bill,  and  incident  to  protest,  damages,  &c.^  An  order  drawn 
expressly  for  the  whole  of  a  particular  fund,  will  operate  as  a 
transfer  of  that  fund,  although  not  recognizable  as  a  bill  of  ex- 
change." 

A  bill  of  exchange  or  promissory  note  must  be  payable  in 
money  only,  and  not  in  goods  or  merchandise,  or  property  of  any 
kind,  or  by  the  performance  of  any  act.^  If  payable  in  "  current 
funds,"  or  "  good  bank-notes,"  or  "  current  bank-notes,"  this 
should  not  be  sufficient  on  general  principles,  and  according  to 
many  authorities;^  some  courts,  however,  construe  this  as  mean- 
ing notes  convertible  on  demand  into  money,  and  therefore  as 
the  same  thing  as  money.^*^ 

A  bill  or  note  may  be  written  upon  any  paper  or  proper  substi- 
tute for  it,  in  any  language,  in  ink  or  pencil.^^     A  name  may  be 

1  Ayi-cy  V.  Fcarnsides,  4  M.  &  W.  168. 

-  Clayton  v.  Gosling,  5  B.  &  Cr.  360. 

3  Macleed  v.  Snee,  2  Strange,  762. 

*  Ilaydock  v.  Lynch,  2  Ld.  Raym.  1563  ;  Dawkes  v.  Lord  De  Lorane,  3  Wils.  207; 
Yeates"i;.  Grove,  1  Ves.  Jan.  280;  Carlos  v.  Fancourt,  5  J.  R.  482. 

'=  Jcnncy  v.  Herle,  2  Ld.  Raym.  1361  ;  Crawford  v.  Cully,  Wright,  (Ohio,)  453;  Van 
Vacter  v.  Flack,  1  Sm.  &  Marsh.  393 ;  Rcesidc  v.  Knox,  2  Whart.  233  ;  Morton  v. 
Navlor,  1  Hill,  583. 

•^"United  States  v.  Bank  of  the  United  States,  5  How.  382. 

■  Cowperthwaite  v.  Sheffield,  1  Sandf  416. 

**  Jerome  v.  Whitney,  7  Johns.  321  ;  Thomas  r.  Roosa,  id.  461 ;  Atkinson  v.  Manks, 
1  Cow.  691,  707;  Clark  v.  King,  2  Mass.  524.  And  an  instrument  containing,  in 
addition  to  a  promise  to  pay  monej-,  stipulations  to  do  other  things,  is  not  a  promis- 
sory note.  Austin  v.  Burns,  16  Barb.  643.  Therefore,  an  instrument  which  contained 
a  promise  to  deliver  up  horses  and  a  wharf,  and  also  to  pay  money  at  a  particular  day, 
was  held  not  to  be  a  promissory  note.     Martin  v.  Chaunlrv,  2  Stra.  1271. 

9  M'Cormick  v.  Trotter,  10"S.  &  R  94;  Gray  f.  Donahoe,  4  Watts,  400  ;  Hasbrook 
V.  Palmer,  2  McLean,  10;  Fry  v.  Rousseau,  3  id.  106. 

1'^  Keith  r.  Jones,  9  Johns.  120  ;  Judah  v.  Harris,  19  Johns.  144  ;  Swetland  u.  Crcigh, 
15  Ohio,  118.  ■    . 

"  Geary  v.  Physic,  5  B.  &  Cr.  234. 


88  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

signed  or  indorsed  by  a  mark;i  and,  though  usually  written  at 
the  bottom,  it  may  be  sufficient  if  written  in  the  body  of  the 
note;  as  "I,  A  B,  promise,"  &c. ;  unless  it  can  be  shown  that 
the  note  was  incomplete,  and  was  intended  to  be  finished  by 
signature.2  If  not  dated,  it  will  be  considered  as  dated  when  it 
was  made  ;  but  a  written  date  is  primd  facie  evidence  of  the  time 
of  making.^  The  amount  is  usually  written  in  figures  at  the 
corner  or  bottom.  If  the  sum  is  written  at  length  in  the  body, 
and  also  in  figures  at  the  corner,  it  seems  that  the  written  words 
control  the  figures,  and  evidence  is  not  admissible  to  show  that 
the  figures  were  right  and  the  words  inaccurate ;  ^  but  the  omis- 
sion of  such  a  word  as  "dollars,"  or  "pounds,"  or  "sterling,"  may 
be  supplied,  if  the  meaning  of  the  instrument  is  quite  clear.^ 

2.  The  payee  must  be  designated.  —  The  payee  should  be  dis- 
tinctly named,  unless  the  bill  or  note  be  made  payable  to  bearer.*^ 
And  if  he  be  named,  and  the  note  get  into  the  possession  of  a 
wrong  person  of  the  same  name,  this  person  neither  has  nor  can 
give  a  title  to  it.'^  If  the  name  be  spelt  wrong,  evidence  of  inten- 
tion is  receivable.8  If  father  and  son  have  the  same  name,  and 
the  son  have  possession  of  the  note  and  indorse  it,  this  would  be 
evidence  of  his  rightful  ownership;  but  in  the  absence  of  evi- 
dence, it  is  said  that  the  presumption  of  law  would  give  the  note 
to  the  father;^  but  this  must  depend  04i  circumstances. 

If  neither  payable  to  bearer,  nor  to  the  maker's,  or  drawer's 
order,  nor  to  any  other  person,  it  would  be  an  incomplete  and  in- 
valid instruments*^     If  the  payee  of  a  bill  be  fictitious,  and  the 

1  George  v.  Surrey,  M.  &  Malk.  516. 

2  Taylor  v.  Dobbins,  1  Stra.  399 ;  Elliot  v.  Cooper,  2  Ld.  Eaym.  1376  ;  Ereskine  v. 
Murray,  id.  1542.  • 

3  Anderson  v.  Weston,  8  Scott,  583. 

*  Saunderson  v.  Piper,  5  Bing.  N.  C.  425. 

5  Rex  V.  Elliott,  2  East,  P.  C.  951.  But  see  Saunderson  v.  Piper,  supra.  See  fur- 
ther, Norwich  Bank  v.  Hyde,  13  Conn.  279;  Boyd  v.  Brotherson,  10  Wend.  93.  In 
Burnham  v.  Allen,  1  Gray,  496,  a  promissory  note,  expressed  to  be  for  "  thee  hundred 
dollars,"  and  in  figures  in  the  margin,  $300,  was  held  to  be  a  good  note  for  three  hun- 
dred dollars,  if  the  maker,  -when  he  signed  it,  intended  "thee"  for  "three;"  and 
whether  such  was  his  intention,  was  a  question  for  the  jury. 

6  Storm  V.  Stirling,  3  El.  &  Bl.  832  ;  per  Eyre,  C.  B.,  "in  Gibson  v.  Minet,  1  H.  Bl. 
608.  But  if  it  can  be  gathered  from  the  instrument,  by  a  reasonable  or  necessary  in- 
tendment, who  is  the  payee,  it  will  be  sufficient.  Thus,  in  Green  v.  Davies,  4  B.  &  Cr. 
235,  an  instrument  in  the  following  form  :  "Received  of  A.  B.  £100,  which  I  promise 
to  pay  on  demand,  with  lawful  interest,"  was  held  to  be  a  promissory  note. 

'  Mead  v.  Young.  4  T.  R.  28.  »  Willis  v.  Barrett,  2  Stark.  29. 

3  Sweeting  v.  Eowler,  1  Stark.  106.  i'^  Storm  v.  Stirling,  3  El.  &  Bl.  832. 


en.  IX.]  OF  NEGOTIABLE   PAPER.  89 

drawer  indorse  it  with  the  fictitious  name,  the  acceptor  is  not 
liable  thereon  to  the  holder,  unless  at  the  time  of  the  acceptance 
he  knew  the  name  to  be  fictitious.^  In  that  case,  the  bill  may  be 
declared  on  as  payable  to  bearer  j^  or  the  amount  may  be  recov- 
ered on  the  money  counts;^  as  it  may  if  the  acceptor  did  not 
know  the  name  to  be -fictitious,  but  had  the  money  of  the  holder 
in  his  hands.*  A  note  to  a  fictitious  payee,  with  his  name  in- 
dorsed by  the  maker,  would  undoubtedly  be  held  to  be  the 
maker's  own  note,  either  payable  to  bearer,  or  to  himself,  or  order, 
by  another  name,  and  so  indorsed.^  If  a  blank  be  left  in  a  bill 
for  the  payee's  tiame,  a  bond  fide  holder  may  fill  it  with  his  own, 
the  issuing  of  the  bill  in  blank  being  an  authority  to  a  bond  fide 
holder  to  insert  the  name.^  And  if  the  name  of  the  payee  be  not 
the  name  of  a  person,  as  if  it  be  the  name  of  a  ship,  the  instru- 
ment is  payable  to  bearer."  A  note  payable  to  "A,  or  B,  or  C," 
is  not  a  good  promissory  note.^  A  bill  or  note  "to  the  order  of" 
the  plaintiff,  is  the  same  as  if  to  him  "or  his  order,"  and  may  be 
sued  by  him  without  indorsement.^ 

3.  Of  ambiguous  and  irregidar  instruments. —  The  law  in  rela- 
tion to  protest  and  damages  makes  it  sometimes  important  to 
distinguish  between  a  promissory  note  and  a  bill  of  exchange. 
The  rule  in  general  is,  that,  if  an  instrument  be  so  ambiguous  in 
its  terms  that  it  cannot  be  certainly  pronounced  one  of  these  to 
the  exclusion  of  the  other,  the  holder  may  elect  and  treat  it  as 
either.^o  As  if  written,  "  value  received,  in  three  months  froni 
date,  pay  the  order  of  H.  L.,  $500.  Signed  A  B;"  and  an 
address  or  memorandum  at  the  bottom,  "At  Messrs.  E.  F.  & 
Co.""  It  has  been  held  that  an  indorsement  upon  a  bond,  order- 
ing the  contents  to  be  paid  to  A  or  order,  for  value  received,  is  a 
good  bill.^2     So  also,  a  direction  to  pay  the  amount  of  a  promis- 

'  Bennett  v.  Faraell,  1  Campb.  130,  180;   Gibson  v.  Minet,  1  H.  Bl.  569. 
-  Gibson  v.  Minet,  supra. 
3  Tatlock  V.  Harris,  3  T.  R.  174. 
*  Bennett  v.  Farnell,  1  Campb.  130. 

^  riets  r.  Johnson,  3  Plill,  112.     And  see  cases  cited  supra. 

^  Crucblev  v.  Clarance,  2  M.  &  S.  90 ;   Crutchley  v.  ISIann,  5  Taunt.  529 ;  Attwood 
V.  Griffin,  By.  &  M.  425. 

■^  Grant  v.  Vaughan,  3  Burr.  1528. 

»  Blanckenhagen  v.  Blundell,  2  B.  &  Aid.  417. 

9  Smith  V.  M'Clure,  5  East,  476. 

'"  Edis  V.  Bury,  6  B.  &  Cr.  433 ;  Lloyd  v.  Oliver,  12  E.  L.  &  Eq.  424.  . 

"  Shuttlewortli  v.  Stephens,  I  Campb.  407.  12  g^y  u.  Ereazer,  1  Bay,  66. 

8*  . 


90  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IX. 

sory  note,  written  under  the  same  by  the  promisor;  so  that  the 
person  directed,  if  he  accepts,  is  liable  as  acceptor  of  a  bill.^  So, 
where  a  certificate  of  deposit  in  a  bank,  payable  on  a  future  day 
to  the  order  of  A,  was  indorsed  for  value  to  B  by  A,  it  was  held 
that  the  indorsement  constituted  a  bill  of  exchange.^  An  agree- 
ment in  the  instrument  itself  to  give  further  security,  would 
avoid  it  as  a  promissory  note  or  bill;^  but  not,  as  it  seems,  a 
statement  that  security  has  been  given.* 

4.  Of  bank-notes. —  Bank-notes,  or  bank-bills,  are  promissory 
notes  of  the  bank,  payable  to  bearer;  and,  like  all  notes  to  bearer, 
the  property  in  them  passes  by  delivery.  They  are  intended  to  be 
used  as  rnoney ;  and,  while  a  finder,  or  one  who  steals  them,  has 
no  title  himself  against  the  owner,  still,  if  he  passes  them  away 
to  a  bond  fide  holder,  that  is,  a  holder  for  value  without  notice  or 
knowledge,  such  owner  holds  them  against  the  original  owner.^ 
And  if  the  bank  pays  them  in  good  faith  on  regular  presentment, 
the  owner  has  no  claim.*^  They  pass  by  a  will  bequeathing 
money.'''  They  are  a  good  tender,  unless  objected  to  at  the  time 
because  not  money.^  Forged  bills,  given  in  payment,  are  a  mere 
nullity.^  Bills  of  a  bank  which  has  failed,  but  of  which  the  fail- 
ure is  unknown  to  both  parties,  are  now,  generally,  put  on  the 
footing  of  forged  or  void  bills ;  although  there  is  some  conflict  on 
this  subject.^*^  But  if -the  receiver  of  them,  by  holding  them,  and 
by  a  delay  of  returning  or  giving  them  up,  injures  the  payer  and 
impairs  his  opportunity  or  means  of  indemnity,  the  receiver  must 
then  lose  them.'^ 

5.  Of  checks  on  banks. —  A  check  on  a  bank  is  undoubtedly  a 
bill  of  exchange ;  but  usage  and  the  nature  of  the  case  have  in- 

I  Leonard  v.  Mason,  1  Wend.  522.  -  Kilgore  v.  Bulkley,  14  Conn.  362. 
3  See  Bylcs  on  Bills,  9.  *  Wise  v.  Charlton,  4  Ad.  &  EI.  786. 
s  Miller  v.  Kace,  1  Burr.  452.  ^  Id. 

■^  Flemrng  v.  Brook,  1  Sch.  &  Lcf.  318  ;  Stuart  v.  The  Marquis  of  Bute,  11  Ves.  662. 

^  Snow  V.  Perry,  9  Pick.  542;  Wheeler  i\  Kraggs,  8  Ohio,  169;  Warren  v.  Mains,  7 
Johns.  476;  Noc  v.  Hodges,  3  Humph.  162;  Seawell  v.  Henry,  6  Ala.  226;  Hoyt  v. 
Byrnes,  2  Fairf.  475 ;  Polglass  v.  Oliver,  2  Cr.  &  J.  15. 

9  United  States  Bank  v.  Bank  of  Georgia,  10  Wheat.  333 ;  Thomas  v.  Todd,  6  Hill, 
340;  Simnis  v.  Clarke,  11  III.  137;  Ramsdale  v.  Horton,  3  Penn.  St.  330;  Keene  v. 
Thompson,  4  Gill  &  Johns.  463. 

"5  Wainwright  v.  Webster,  1 1  Vt.  576 ;  Fogg  v.  Sawyer,  9  N.  H.  365 ;  Lightbody  v. 
Ontario  Bank,  1 1  Wend.  1, 13  id.  101 ;  Frontier  Bank  v.  Morse,  22  Maine,  88  ;  Timmis 
V.  Gibbins,  14  Eng.  Law  and  Eq.  64. 

II  Pindall  v.  The  Northwestern  Bank,  7  Leigh,  617;  Simms  v.  Clarke,  11  111.  137. 


CH.  IX.]  OF  NEGOTIABLE   PAPER.  91 

troduccd  some  important  qualifications  of  the  general  law  of 
bills,  as  applicable  to  checks.^  A  check  has  no  days  of  grace, 
and  requires  no  acceptance,  because  a  banker,  after  a  customary 
or  reasonable  time  has  elapsed  since  deposit,  is  bound  to  pay  the 
checks  of  the  depositors.-  The  drawer  of  a  check  is  not  a  surety 
as  is  the  drawer  of  a  bill,  but  a  principal  debtor,  like  the  maker 
of  a  note.^  Nor  can  a  drawer  complain  of  any  delay  whatever 
in  the  presentment;  for  it  is  an  absolute  appropriation  to  the 
holder  of  so  much  money  in  the  banker's  hands;  there  it  may  lie 
at  the  holder's  pleasure.'*  But  delay  is  at  the  holder's  risk  ;  for, 
if  the  bank  fails  after  he  could  have  got  his  money  on  the  check, 
the  loss  is  his.^  An  acceptance  of  the  drawers,  payable  at  the 
bank,  and  paid  by  the  bank,  if  it  exhaust  the  drawers'  funds  so 
that  none  are  left  for  his  check,  is  a  good  defence  to  an  action 
against  the  bank  for  non-payment  of  the  check.^ 

If  one  who  holds  a  check  as  payee,  or  otherwise,  transfers  it  to 
another,  he  has  a  right  to  insist  that  the  check  should  be  pre- 
sented in  the  course  of  the  banking  hours  of  that  day  and  the 
next.'^  And  if  the  party  receiving  the  check  live  elsewhere  than 
where  the  bank  is,  it  seems  that  he  should  send  it  for  collection 
the  next  day;  and  if  to  an  agent,  the  agent  should  present  it  in 
the  course  of  the  day  after  he  receives  it.^  If  the  check  be  drawn 
when  the  drawer  neither  has  funds  in  the  bank,  nor  has  made 
any  arrangement  by  which  he  has  a  right  to  draw  the  check,  the 
drawing  it  is  a  fraud,  and  the  holder  may  bring  his.  action  at 
once  against  the  drawer,  without  presentment  or  notice.^ 

Checks  are  seldom  accepted.  But  they  are  often  marked  by 
the  bank  as  good ;  and  it  is  said  that  this  binds  the  bank  as  an 
acceptor.^*'  And  from  the  nature  of  a  check,  and  the  use  to  which 
it  is  applied,  it  has  been  inferred  that  if,  a  check  be  drawn  for 

'  See  Chapman  v.  While,  2  Seld.  412  ;  Bowcn  v.  Newell,  4  id.  190;  In  the  Matter 
of  Brown,  2  Story,  502;  Marker  v.  Anderson,  21  Wend.  372. 

2  In  the  Matter  of  Brown,  2  Story,  502  ;  Ilarker  v.  Anderson,  21  Wend.  372. 

3  3  Kent's  Com.  104,  n.  (c.) 

*  Little  V.  Pha-nix  Bank,  2  Hill,  425 ;  In  the  Matter  of  Brown,  '2  Story,  502  :  3 
Kent's  Com.  nt.  sup.,  Kobinson  v.  Ilawksford,  9  Q.  B.  52. 

5  Id. 

6  Kymer  v.  Laurie,  13  L.  J.  Q.  B.  426. 

T  Rlckford  v.  Ridge,  2  Campb.  537 ;  Boddington  v.  Schlcnckcr,  4  B.  &  Ad.  752  ; 
Moule  V.  Brown,  4  Bing.  N.  C.  266. 

8  Rickford  v.  Ridge,  2  Campb.  537  ;  Moule  v.  Brown,  4  Bing.  N.  C.  266, 

9  De  Berdt  v.  Atkinson,  2  H.  Bl  336  ;  Terry  v.  Parker,  6  Ad.  &  El.  502 ;  Kinsley  v. 
Robinson,  21  Piek.  327  ;  Foard  v.  Womack,  2  Ala.  368. 

1!^  Robson  V.  Bennett,  2  Taunt.  388. 


92  ELEMENTS   OF   MERCANTILE  LAW.  [CH.  IX. 

value  against  funds,  and  the  drawer  afterwards  order  the  bank 
to  refuse  payment  of  it,  and  while  the  bank  has  still  the  funds  of 
the  drawer  in  its  hands,  it  receives  notice  of  the  check  and  a 
demand  of  its  contents,  the  bank  should  be  bound  to  pay  it  and 
entitled  to  appropriate  to  the  payment  the  necessary  amount 
from  the  funds  of  the  drawer.  But  this  would  be  contrary  to  the 
general  law  of  bills  of  exchange,  which  certainly  do  not  operate 
as  an  absolute  appropriation  of  the  funds  in  the  hands  of  the 
acceptor,  until  after  his  acceptance. 

Checks  are  usually  payable  to  bearer;  but  may  be  and  often 
are  drawn  payable  to  a  payee  or  his  order ;  for  this  guards 
against  loss  or  theft,  and  gives  to  the  drawer,  when  the  check  is 
paid,  the  receipt  of  the  payee.  Generally,  a  check  is  not  pay- 
ment until  it  is  cashed;'  but  then  it  is  payment;  to  make  it  so, 
however,  it  must  be  shown  that  the  money  was  paid  to  the  cred- 
itor, or  that  the  check  passed  through  his  hands.^  A  bank  cannot 
maintain  a  claim  for  money  lent  and  advanced,  merely  by  show- 
ing the  defendant's  check  paid  by  them,  because  the  general  pre- 
sumption is,  that  the  bank  paid  the  check  because  drawn  by  a 
depositor  against  funds'.^   , 

It  is  said  that,  while  the  death  o^  a  drawer  countermands  his 
check,  if  the  bank  pay  it  before  notice  of  the  death  reaches  them, 
they  are  discharged."*  This  would  seem  to  be  almost  a  necessary 
inference  from  the  general  purpose  of  banks  of  deposit,  and  the 
use  which  merchants  make  of  them. 

If  a  bank  pay  a  forged  check,  it  is  so  far  its  own  loss,  that 
the  bank  cannot  charge  the  money  to  the  depositor  whose  name 
was  forged.  And  it  has  lately  been  decided  in  New  Jersey,  that 
the  bank  cannot  recover  the  money  back  from  a  bond  fide  holder 
to  whom  they  pay  it.^  So,  if  it  pay  a  check  of  which  the  amount 
has  been  falsely  and  fraudulently  increased,  it  can  charge  the 
drawer  only  with  the  original  amount.^  But  it  seems  that  if  the 
drawer  himself  caused  or  facilitated  the  forgery,  so  that  it  may 
be  called  his  fault,  and  the  bank  is  wholly  innocent,  then  the  loss 
falls  on  the  drawer.'^     If  many  persons,  not  partners,  join  in  a 

1  Pearce  v.  Davis,  1  M.  &  Rob.  365  ;  The  People  v.  Baker,  20  Wend.  602. 

2  Egg  V.  Barnett,'3  Esp.  196;  Mountford  v.  Harper,  16  M.  &  W.  825. 

3  Eletcher  v.  Manning,  12  M.  &  W.  571. 
*  Tate  V.  Hilbert,  2  Ves.  Jr.  111. 

5  Burlington  County  Bank  v.  Miller,  Legal  Intelligencer,  Phila.  Eeb.  8,  1856. 

6  Hall  V.  Fuller,  5  B.  &  Cr.  750;  Smith  v.  Mercer,  6  Taunt.  76. 
''  Young  V.  Grote,  4  Bing.  253. 


en.  IX.]  OF  NEGOTIABLE  PAPER.  93 

deposit,  they  must  join  in  a  check;   but  if  one  or  more  abscond, 
equity  will  relieve  the  remainder.^ 

6.  Of  accommodation  paper.  —  An  accommodation  bill  or  note' 
is  one  for  which  the  acceptor  or  maker  has  received  no  considera- 
tion, but  has  lent  his  name  and  credit  to  accommodate  the 
drawer,  payee,  or  holder.  Of  course,  he  is  bound  to  all  other 
parties,  precisely  as  if  there  were  a  good  consideration  ;  for,  other- 
wise, it  would  not  be  an  effectual  loan  of  credit.  But  he  is  not 
bound  to  the  party  whom  he  thus  accommodates;  on  the  con- 
trary, that  party  is  bound  to  take  up  the  paper  or  provide  the  ac- 
commodation acceptor,  or  maker,  or  indorser,  with  funds  for 
doing  it,  or  indemnify  him  for  taking  it  up.  And  if,  before  the 
bill  or  note. is  due,  the  party  accommodated  provides  the  party 
lending  his  credit  with  the  necessary  funds,  he  cannot  recall 
them ;  and  if  he  becomes  bankrupt,  they  remain  the  property  of 
the  accommodation  acceptor  or  maker.^  And  if  sued  on  the  bill 
or  note,  he  can  charge  the  party  accommodated  with  the  expense 
of  defending  the  suit,^  unless  it  was  evident  and  certain  that  he 
had  no  defence.* 

7.  Of  foreign  and  inland  bills. —  Bills  of  exchange  may  be  for- 
eign bills,  or  inland  bills.  Foreign  bills  are  those  which  are 
drawn  or  payable  in  a  foreign  country;  and  for  this  purpose, 
each  of  oui;  States  is  foreign  to  the  others.^  Inland  bills  are 
drawn  and  payable  at  home.  Every  bill  is,  jrrimd  facie,  an  in- 
land bill,  unless  it  purports  to  be  a  foreign  bill.*^  If  foreign  on  its 
face,  evidence  is  admissible  to  show  that  it  was  drawn  at  home. 
In  England,  this  evidence  has  been  admitted  to  make  the  bill 
void  for  want  of  a  stamp."  If  a  bill  be  drawn  and  accepted  here, 
but  afterwards  actually  signed  by  the  drawer  abroad,  it  is  a  for- 
eign bill.s     If  a  foreign  bill  be  not  accepted,  or  be  not  paid  at 

1  Ex  parte  Hunter,  2  Rose,  363;  Ex  parte  Collins,  2  Cox,  427. 

2  Morse  r.  Williams,  3  Campb.  418 ;  Wilkins  v.  Casey,  7  T.  R.  711 ;  Willis  v.  Free- 
man, 12  East,  656. 

3  Jones  V.  Brooke,  4  Taunt.  464;    Stratton  v.  Mathews,  3  Exch.  48;    Garrard  v. 
Cottrell,  10  Q.  B.  679. 

*  Roach  V.  Thompson,  M.  &  Malk.  487;    Beech  r.  Jones,  5  C.  B.  696 ;    Bylcs  on 
Bills,  323. 
5  Buckner  v.  Finlcy,  2  Pet.  586. 
s  Armani  v.  Castrique,  13  M.  &  W.  443. 
■?  Steadraan  v.  Duhamel,  1  C.  B.  888. 
s  Suaith  V.  Mingay,  1  M.  &  Selw.  87. 


94  ELEMENTS    OF   MEKCANTILE   LAW.  [CH.  IX. 

maturity,  it  should  at  once  be  protested  by  a  notary-public.  In- 
land bills  are  generally,  and  promissory  notes  frequently,  pro- 
tested;  but  it  cannot  be  said  that  this  is  required  by  the  law- 
merchant.^  The  holder  of  a  foreign  bill,  after  protest  for  non- 
payment, or  for  non-acceptance,  may  sue  the  drawer  and  indorser, 
and  recover  the  face  of  the  bill,  and,  in  addition  thereto,  his  costs 
of  protest  and  notice,  his  commissions  and  recxchange,  or  what- 
ever it  may  cost  him  to  redraw,  by  reason  of  the  current  rate  of 
exchange.^  But  these  damages  on  protest  are  generally  adjusted 
in  this  country  by  various  statutes,  —  which  give  greater  dam- 
ages as  the  distance  is  greater ;  and  an  established  usage  would 
supply  the  place  of  statutes  if  they  were  wanting.^ 

8.  Of  the  law  of  place. —  Important  questions  sometimes  arise 
in  the  case  of  foreign  bills,  dependent  upon  the  lex  loci;  some  of 
which  are  not  yet  settled.  In  general,  every  contract  is  to  be 
governed  by  the  law  of  the  place  where  it  is  made.*  Thus,  if  a 
bill  is  drawn  in  France,  and  there  indorsed  "in  a  way  which  is 

'  Windlc  V.  Andrews,  2  B.  &  Aid.  696. 

2  Mellish  V.  Simeon,  2  IL  Bl.  378;  Graves  v.  Dash,  12  Johns.  17 ;  Denston  v.  Hen- 
derson, 13  id.  322;  Grimshaw  v.  Bender,  6  Mass.  157  ;  Dc  Tastet  v.  Baring,  11  East, 
265.  In  this  last  case,  the  nature  of  recxchange  was  thus  stated  and  explained  by . 
counsel,  a?-(7i(enf/o ;  "A  merchant  in  London  draws  on  his  debtor  in  Lisbon  a  bill  in 
favor  of  another  for  so  much  in  currency  of  Portugal,  for  which  he  receives  the  corre- 
sponding value  at  the  time  in  English  currency;  and  that  corresponding  value  fluctu- 
ates from  time  to  time,  according  to  the  greater  or  lesser  demand  there  may  be  in  the 
London  market  for  bills  on  Lisbon,  and  the  facility  of  obtaining  them  ;  the  difference 
of  that  value  constitutes  the  rate  of  exchange  en  Lisbon.  The  like  circumstances  and 
considerations  take  place  at  Lisbon,  and  constitute  in  like  manner  the  rate  of  exchange 
on  London.  When  the  holder,  therefore,  of  a  London  bill  drawn  on  Lisbon,  is  refused 
payment  of  it  in  Lisbon,  the  actual  Iqss  which  he  sustains  is  not  the  identical  sum 
which  he  gave  for  the  bill  in  London,  but  the  amount  of  its  contents  if  paid  at  Lisbon, 
where  it  was  due,  and  the  sum  which  it  will  cost  him  to  replace  that  amount  upon  the 
spot  by  a  bill  upon  London,  which  he  is  entitled  to  draw  upon  the  persons  there  who 
are  liable  to  him  upon  the  former  bill.  That  cost,  whatever  it  may  be,  constitutes  his 
actual  loss  and  the  charge  for  recxchange.  And  it  is  quite  immaterial  whether  or  not 
he  in  fact  redraws  such  a  bill  on  London,  and  raises  the  money  upon  it  in  the  Lisbon 
market ;  his  loss  by  the  dishonor  of  the  London  bill  is  exactly  the  same,  and  cannot 
depend  on  the  circumstance  whether  he  repay  himself  immediately  by  redrawing  for 
the  amount  of  the  former  bill,  with  the  addition  of  the  charges  upon  it,  including  the 
amount  of  the  recxchange,  if  unfavorable  to  this  country  at  the  time,  —  or  whether  he 
wait  till  a  future  settlement  of  accounts  with  the  party  who  is  liable  to  him  on  the  first 
bill  here  ;  but  that  party  is  at  all  events  liable  to  iiim  for  the  difference ;  for,  as  soon  as 
the  bill  was  dishonored,  the  holder  was  entitled  to  redraw.  That,  therefore,  is  the 
period  to  look  to.  It  ought  not  to  depend  on  the  rise  or  fall  of  the  bill  market  or  ex- 
change afterwards ;  for,  as  he  could  not  charge  the  increased  ditference  by  his  own 
delay  in  waiting  till  the  exchange  grew  more  unfavorable  to  England  before  he  redrew, 
so  neither  could  the  party  here  fairly  insist  on  having  the  advantage  if  the  exchange 
happened  to  be  more  favorable  when  the  bill  was  actually  drawn." 

**  See  3  Kent,  Com.  115,  c<  scq. 

*  Carnegie  v.  Morrison,  2  Met.  381,  397. 


en.  IX.]  OF   NEGOTIABLE   PAPER.  95 

suflicient  here,  but  insunicient  there,  the  indorsement  would  here 
be  held  void.^  But  if  a  contract  entered  into  in  one  place,  is  to 
be  performed  in  another,  as  in  the  case  of  a  note  dated,  or  a  bill 
drawn  in  one  State,  but  payable  in  another,  the  prevailing  rule 
is,  that  the  law  of  the  place  where  the  note  is  payable,  construes 
and  governs  the  contract.^  Therefore,  if  a  bill  be  drawn  in  Eng- 
land, payable  in  France,  the  protest  and  notice  of  dishonor  must 
be  regulated  by  the  law  of  France.^  But  one  who  makes  such 
a  note,  may,  as  we  think,  elect  for  many  purposes,  which  law 
shall  govern  it..  Thus,  if  he  makes  it  in  New  York,  and  it  is 
payable  in  Boston,  he  may  promise  to  pay  the  legal  interest  of 
New  York,  and  will  be  bound  to  this  payment  in  Boston,  al- 
though the  legal  interest  there  is  one  per  cent,  less  ;*  but  if  there 
be  no  such  express  promise,  the  interest  payable  will  be  that  of 
the  place  where  the  note  is  payable. 

While  the  law  of  the  place  of  the  contract  interprets  and  con- 
strues it,  the  law  of  the  place  where  it  is  put  in  suit — the  lex 
fori — determines  all  questions  as  to  remedy.^  Thus,  in  general, 
the  statutes  of  limitation  of  the  place  of  the  forum  are  applied  ;  ^ 
it  has  been  doubted,  however,  whether,  if  the  statutes  of  limita- 
tion of  the  place  where  the  note  is  made,  discharge  the  maker, 
they  do  not  operate  as  a  release  everywhere.^     And  if  a  cause  of 

'  Trimbey  v.  Vignier,  1  Bing.  N.  C  151. 

2  Robinson  r.  Eland,  2  Bnrr.  1077;  Le  Breton  v.  Miles,  8  Paige,  261  ;  Fanning  v. 
Consequa,  17  Johns.  511  ;  Andrews  v.  Pond,  13  Pet.  65. 

3  Rothschild  v.  Carrie,  1  Q.  B.  43. 

*  Depau  V.  Humphreys,  20  Martin,  1;  Pecks  v.  Mayo,  14  Vt.  33;  Chapman  v. 
Robertson,  6  Paige,  627. 

^  Van  Rcimsdyk  v.  Kane,  1  Gall.  371. 

•^  British  Linen  Co.  v.  Drummond,  10  B.  &  Cr.  903;  Le  Roy  v.  Crowninshield,  2 
Mason,  151 ;  Nash  v.  Tupper,  1  Caines,  402  ;  Bank  of  United  States  v.  Donnally,  8 
Pet.  361  ;  Riiggles  v.  Keeler,  3  Johns.  263  ;  Byrne  v.  Crowninshield,  17' Mass.  55. 

^  Mr.  Justice  Stori/,  in  his  Conflict  of  Laws,  \  582,  says:  "  Suppose  the  statutesof 
limitation  or  prescription  of  a  particular  country  do  not  only  extinguish  the  right  of 
action,  but  the  claim  or  title  itself,  ipso  facto,  and  declare  it  a  nullity  after  the  lapse  of 
the  prescribed  period,  and  the  parties  are  resident  within  the  jurisdiction  during  the 
whole  of  that  period,  so  that  it  has  actually  and  fully  operated  upon  the  case ;  under 
such  circumstances,  the  question  might  properly  arise  whether  such  statutes  of  limita- 
tion or  prescription  may  not  afterwards' be  set  up  in  any  other  country  to  which  the 
parties  may  remove,  by  way  of  extinguishment  or  transfer  of  the  claim  or  title.  This 
is  a  point  whicli  does  not  seem  to  have  received  as  much  consideration  in  the  decisions 
of  the  common  law  as  it  would  seem  to  require."  And  in  Don  v.  Lippmann,  5  CI.  «& 
Pin.  16,  Lord  Brougham  speaks  of  this  as  an  excellent  distinction.  And  it  is  approved 
of  by  Timlal,  C.  J.,  in  Huber  v.  Steiner,  2  Bing.  f[.  C.  202.  But  in  Bulger  v.  Roche, 
11  Pick.  36,  where  a  debt  was  contracted  in  a  foreign  country,  between  subjects  thereof, 
who  remained  there  until  the  debt  became  barred  by  the  law  of  limitations  of  such 
country,  it  was  held  that  such  debt  could  be  recovered  in  Massachusetts,  in  an  action 
brought  within  six  years  after  the  parties  came  into  that  commonwealth.  And  Shaw, 
C.  J.,  said  :  "  Whether  a  law  of  prescription  or  statute  of  limitation,  which  takes  away 


96  ELEMENTS    OF   MERCANTILE   LA^Y.  [CH.  IX. 

action,  relating  to  any  special  subject-matter  which  has  a  situs, 
be  barred  by  a  statute  of  limitations  where  the  subject-matter  is 
situated,  it  is  barred  everywhere.^  A  promisor,  not  subject  to 
arrest  in  the  country  where  the  note  is  made,  may  be  arrested 
under  the  laws  of  the  country  where  the  note  is  sued.^ 

It  will  always  be  presumed,  in  the  absence  of  testimony,  that 
the  law  of  a  foreign  country  is  the  same  with  that  of  the  country 
in  which  the  suit  is  brought.  If  a  difference  in  this  respect  is  a 
ground  of  defence,  or  of  action,  it  must  be  proved.^ 


SECTION  III. 

OF    THE    CONSIDERATION. 

1.  Exception  to  the  common  law  rule,  in  the  case  of  negotiable 
papa:  —  By  the  common  law  of  England  and  of  this  country,  as 
we  have  seen,  no  promise  can  be  enforced,  unless  made  for  a 
consideration,  or  unless  it  be  sealed.     But  bills  and  notes  pay- 

every  legal  mode  of  recovering  a  debt,  shall  be  considered  as  affecting  the  contract  like 
payment,  release,  or  judgment,  which  in  effect  extinguish  the  contract,  or  whether  they 
are  to  be  considered  as  effecting  the  remedy  only  by  determining  the  time  within  which 
a  particular  mode  of  enforcing  it  shall  be  pursued,  were  it  an  open  question,  might  be 
one  of  some  difficulty.  It  was  ably  discussed,  upon  general  principles,  in  a  late  case, 
(Le  Roy  v-  Crowninshield,  2  Mason's  Rep.  151,)  before  the  Circuit  Court,  in  which, 
however,- it  was  fully  conceded  by  the  learned  judge,  upon  a  full  consideration  and 
review  of  all  authorities,  that  it  is  now  to  be  considered  a  settled  question.  A  doubt 
was  intimated  in  that  case,  whether,  if  the  parties  h;id  I'cmained  subjects  of  the  foreign 
country  until  the  term  of  limitation  had  expired,  so  that  the  plaintiff''s  remedy  would 
have  been  extinguished  there,  such  a  state  of  facts  would  not  have  presented  a  stronger 
case,  and  one  of  more  serious  difficulty.  Such  was  the  case  in  the  present  instance; 
but  we  think  it  sufficient  to  advert  to  a  well-settled  rule  in  the  construction  of  the  statute 
of  limitations,  to  show  that  this  circumstance  can  make  no  difference.  The  rule  is  this, 
that  where  the  statute  has  begun  to  run,  it  will  continue  to  run,  notwithstanding  the 
intervention  of  any  impediment,  which,  if  it  had  existed  when  the  cause  of  action 
accrued,  would  have  prevented  the  operation  of  the  statute.  For  instance,  if  this  action 
accrued  in  Nova  Scotia  in  1821,  and  the  plaintiff  or  defendant  had  left  that  country  in 
1825,  (within  six  years,)  in  1828,  after  the  lapse  of  six  years,  the  action  would  be  as 
effectually  barred,  and  the  remedy  extinguished  there,  as  if  both  had  continued  to  reside 
in  Halifax  down  to  the  same  period.  So  that,  when  the  parties  met  here  in  1829,  so 
far  as  the  laws  of  that  country,  by  taking  away  all  legal  remedy,  could  effect  it,  the 
debt  was  extinguished,  and  tliat  equally  Avhether  they  had  both  remained  under  the 
jurisdiction  of  these  laws  till  the  time  of  limitation  had  elapsed,  or  whether  either  or 
both  had  previously  left  it.  The  authorities  referred  to,  therefore,  must  be  held  appli- 
cable to  a  case  where  both  parties  were  subject  to  the  jurisdiction  of  a  foreign  State 
when  the  bar  arising  from  its  statute  of  limitations,  attached." 

■  Beckford  v.  Wade,  17  Ves.  87  ;  Shelby  v.  Guy,  11  Wheat.  361. 
.  2  Ue  La  Vega  v.  Vianna,  1  B.  &  Ad.  284 ;  Imlay  v.  Ellepsen,  2  East,  453  ;  Peck  v. 
Hozier,  14  Johns.  346;  Hinklcy  v.  Marean,  3  Mason,  88;  Titus  v.  Hobart,  5  id.  378; 
Smith  V.  Spinolla,  2  Johns.  198. 

3  Shcrrill  v.  Hopkins,  1  Cow.  103  ;  Legg  v.  Legg,  8  Mass.  99  ;  Holmes  v.  Broughton, 
10  Wead.  75. 


en.  IX.]  OF   NEGOTIABLE   PAPER.  97 

able  to  order,  that  is,  negotiable,  are,  to  a  certain  extent,  an  ex- 
ception to  this  rule.  Thus,  an  indorsee  cannot  be  defeated  by 
the  promisor  showing  that  he  received  no  consideration  for  his 
promise;'  because  he  made  an  instrument  for  circulation  as 
money;  and  it  would  be  fraudulent  to  give  to  paper  the  credit  of 
his  name,  and  then  refuse  to  honor  it.  But  as  between  the 
maker  and  the  payee,  or  between  indorser  and  indorseer,  and,  in 
general,  between  any  two  immediate  parties,  the  defendant  may 
rely  on  the  want  of  consideration.^  So,  if  a  distant  indorsee  has 
notice  or  knowledge,  when  he  buys  a  note,  that  it  was  made 
without  consideration,  he  cannot  recover  on  it  against  the  maker, 
unless  it  was  an  accommodation  note,  or  was  intended  as  a  gift.'^ 
Thus,  if  A,  supposing  a  balance  due  from  him  to  B,  gives  B  his 
negotiable  note  for  the  amount,  and  afterwards  discovers  that  the 
balance  is  the  other  way,  B  cannot  recover  of  A ;  nor  can  any 
third  or  more  distant'party  who  knows  these  facts  before  buying 
the  note.  But  if  A  gives  B  his  note  wholly  without  considera- 
tion, for  the  purpose  of  lending  him  his  credit,  or  for  the  purpose 
of  making  him  a  gift  to  the  amount  of  the  note,  and  C  buys  the 
note  with  a  full  knowledge  of  the  facts,  he  will  nevertheless  hold 
A,  although  B  could  not.  But  it  is  said  that  if  C  paid  for  the 
note  less  than  its  face,  he  can  recover  of  A  no.  more  than  he 
paid.*  Every  promissory  note  imports  a  consideration,  and  none 
need  be  proved  unless  to  rebut  evidence  of  want  of  consideration.^ 
If  an  indorser  shows  that  the  note  was  originally  made  in 
fraud,  he  may  require  the  holder  to  prove  consideration.*^  And  if 
an  accommodation  note  be  discounted  in  violation  of  the  agree- 
ment of  the  party  accommodated,  the  holder  cannot  recover,  un- 
less he  received  the  note  in  good  faith  and  for  valuable  consid- 
eration." 

'  Robinson  v.  Eeynolds,  2  Q.  B.  196;  Hunter  v.  Wilson,  4  Exch.  489;  Collins  v. 
Martin,  1  B.  &  P.  648. 

2  Puget  De  Bras  v.  Forbes,  1  Esp.  117  ;  Jackson  U.Warwick,  7  T.  K..  121 ;  Jefiferies 
r.  Austin, "l  Str.  674. 

2  Smith  V.  Knox,  3  Esp.  46  ;  Charles  v.  Marsdcn,  1  Taynt.  224  ;  Fentum  v.  Pocock, 
5  id.  192. 

*  Wiffen  r.  Roberts,  1  Esp.  261 ;  Jones  v.  Hibbert,  2  Stark.  304 ;  Nash  v.  Brown, 
Chitty  on  Bills,  74,  n. 

5  Middlebury  v.  Case,  6  Vt.  165;  Horn  v.  Fuller,  6  N.  II.  511 ;  Goshen  Turnpike 
Co.  V.  Hurtin,  9  Johns.  217  ;  Camp  v.  Tompkins,  9  Conn.  545  ;  Mandeville  v.  Welch, 
5  Wheat.  277. 

6  Bailey  r.  Bidwell,  13  M.  &  W.  73 ;  Smith  v.  Braine,  16  Q.  B.  244;  Harvey  v. 
Towers,  6  Exch.  656 ;  Fitch  v.  Jones,  1  Jur.  N.  S.  854. 

7  Lewis  V.  Parker,  4  Ad.  &  El.  838. 

9 


98  ELEMENTS   OP   MERCANTILE   LAW.  .    [CH.   IX. 

2.  Of '■'■value  receivedP — "Value  received"  is  usually  written; 
but  it  need  not  be  so.'  If  not,  it  will  be  presumed,  or  may  be 
supplied  by  the  plaintiff's  proof.  If  expressed,  it  may  be  denied 
by  the  defendant,  and  disproved.  And  if  a  special  consideration 
be  stated  in  the  note,  and  in  the  declaration,  the  defendant  may 
prove  that  there  was  no  consideration,  or  that  the  consideration 
was  different.^  If  "  value,  received"  be  written  in  a  note,  it 
means  received  by  the  maker  of  the  pay^e ;  ^  if  the  note  be 
payable  to  bearer,  it  means  received  by  the  maker  of  the  holder.. 
In  a  bill,  this  phrase  means  that  the  value  was  received  of 
the  payee  by  the  drawer.*  But  if  the  bill  Tdb  payable  to  the 
drawer's  own  order,  then  it  means  received  by  the  acceptor  of  the 
drawer,^ 

3.  What  the  consideration  may  be.  —  A  valuable  consideration 
may  be  either  any  gain  or  advantage  to  the  promisor,  or  any 
loss  or  injury  sustained  by  the  promisee  at  the  promisor's  re- 
quest.*^ A  previous  debt,  or  a  fluctuating  balance,  or  a  debt  due 
from  a  third  person,  might  be  a  valuable  consideration.'''  So  is  a 
moral  consideration,  if  founded  upon  a  previous  legal  considera- 
tion ;  as,  where  one  promises  to  pay  a  debt  barred  by  the  statute 
of  limitations,  or  by  infancy.^,  But  a  merely  moral  consideration, 
as  one  founded  upon  natural'love  and  affection  or  the  relation 

1  "White  V.  Ledwick,  Baylef  on  Bills,  2  Am.  cd.  p.  33,  4  Doug.  247 ;  Grant  v.  Da 
Costa,  3  M.  &  S.  352;  Hatch  v.  Trayes,  11  Ad.  &  El.  702  ;  Townsend  v.  Derby,  3 
Met.  363. 

2  Abbott  V.  Hendricks,  1  M.  &  Gr.  791 ;  Fox  v.  Frith,  1  Car.  &  Marsh.  502. 
s  Clayton  v.  Gosling,  5  B.  &  Cr.  360. 

•*  Grant  v.  Da  Costa,  3  M.  &  S.  351.  In  this  case,  a  question  was  made  w^iether 
the  words  "  value  received,"  in  a  bill,  mean  value  received  by  the  drawer  of  the  payee, 
or  value  received  by  the  drawee  of  the  drawer.  And  Lord  EUenhorough  said  :  "  It  ap- 
pears to  me  that '  value  received '  is  capable  of  two  interpretations,  but  the  more  natural 
one  is,  that  the  party  who  draws  the  bill  should  inform  the  drawee  of  a  fact  which  he 
does  not  know,  than  of  one  of  which  he  must  be  well  aware.  The  words  'value  received' 
are  not  at  all  material,  they  might  be  wholly  omitted  in  the  declaration,  and  therti  are 
several  cases  to  that  effect.  The  meaning  of  them  here  is,  that  the  drawer  informs  the 
drawee  that  he  draws  upon  him  in  favor  of  the  payee,  because  he  has  received  value  of 
such  payee.  To  tell  him  that  he  draws  upon  him  because  he,  the  drawee,  has  value  in 
his  hands,  is  to  tell  him  nothing ;  therefore  the  first  is  the  more  probable  interpreta- 
tion." And  Bayley,  J.,  said :  "  The  object  of  inserting  the  words  '  value  received,'  is  to  ! 
show  that  it  is  not  an  accommodation  bill,  but  made  on  a  valuable  consideration  given 
for  it  by  the  payee." 

^  Highmore  v.  Primrose,  5  M.  &  S.  65. 

6  See  ante,  pp.  27,  28,  and  notes. 

T  Percival  ?;.  Frampton,  2  Cr.  M.  &  Eos.  180;  Pease  v.  Hirst,  10  B.  &  Cr.  122; 
Poplewell  V.  Wilson,  1  Strange,  264 ;  Baker  v.  Walker,  14  M.  &  W.  465. 

*  Dodge  V.  Adams,  19  Pick.  429  ;  Ehle  v.  Judson,  24  Wend.  97 ;  Warren  v.  Whit- 
ney, 24  Maine,  561  ;  Geer  v.  Archer,  2  Barb.  420.  j 


en.  IX,]  OP  NEGOTIABLE   PAPER.  99 

of  parent  and  child,  is  no  legal  consideration.^  J  No  consideration 
is  sufficient  in  law  if  it  be  illegal  in  its  nature ;  and  it  may  be 
illegal  because,  first,  it  violates  some  positive  law,  as,  for  example, 
the  Sunday  law,  or  the  law  against  usury.  Secondly,  because  it 
violates  religion  or  morality,  as  an  agreement  for  future  illicit 
cohabitation,  or  to  let  lodgings  for  purposes  of  prostitution,  or  an 
indecent  wager;  for,  any  bill  or  note  founded  upon  either  of 
these,  would  be  void.^  Thirdly,  if  distinctly  opposed  to  public 
policy;  as  an  agreement  in  restraint  of  trade,  or  injurious  to  the 
revenue,  or  in  restraint  of  marriage,  or  for  procurement  of  mar- 
riage, or  suppressing  evidence,  or  withdrawing  a  prosecution  for 
felony  or  public  misdemeanor.^  But  one  who  sells  goods,  only 
knowing'  that  an  illegal  use  is  to  be  made,  without  any,  personal 
aid  in  the  illegal  purpose,  may,  it  seems,  recover  the  price  of 
them.^ 


SECTION  IV. 

OF   THE   RIGHTS   AND    DUTIES    OF    THE   MAKER. 

The  maker  of  a  note  and  the  acceptor  of  a  bill  is  bound  to 
pay  the  same  at  its  maturity,  and  at  any  time  thereafter,  unless 
the  action  be  barred  by  the  statute  of  limitations,  or  he  has  some 
other  defence  under  the  general  law  of  contracts.  As  between 
himself  and  the  payee  of  the  note  or  bill,  he  may  make  any  de- 
fences which  he  could  make  on  any  debt  arising  from  simple 
contract;  as  want  or  failure  of  consideration  ;  payment,  in  whole 
or  in  part;  set-off;  accord  and  satisfaction,  or  the  like.  The 
peculiar  characteristics  of  negotiable  paper  do  not  begin  to  oper- 
ate, so  to  speak,  until  the  paper  has  passed  into  the  hands  of 
third  parties.  Then,  the  party  liable  on  the  note  or  bill  can  make- 
none  of  these  defences,  unless  the  time  or  manner  in  which  it 
came  into  the  possession  of- the  holder, 'lays  him  open  to  these 
defences.  But  the  law  on  this  subject  may  better  be  presented 
in  our  next  section. 

1  Smith  V.  Kittridge,  21  Vt.  238. 

2  Walker  v.  Perkins,  3  Burr.  1568  ;  Girarday  v.  Richawlson,  1  Esp.  13  ;  Da  Costa  v. 
Jones,  Cowp.  729;  Ditchburn  w.  Goldsniitli,  4'Campb.  152. 

^  Mitchel  V.  Reynolds,  1  P.  Wms.  181  ;  Lowe  v.  Peers,  4  Burr.  2225;  Biggs  v.  Law- 
rence, 3  T.  R.  454. 
*  Hodgson  V.  Temple,  5  Taunt.  181. 


100  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 


SECTION  V. 


OF   THE    KIGIITS   AND   DUTIES   OF   THE   HOLDER   OF   NEGOTIABLE   PAPER. 

1.  What  a  holder  may  do  with  a  bill  or  note.  —  An  indorsee  has 
a  right  of  action  against  all  whose  names  are  on  the  bill  when 
he  received  it.  And  if  one  delivers  a  bill  or  note  which  he  ought 
to  indorse  and  does  not,  the  holder  has  an  action  against  him  for 
not  indorsing,'  or  may  proceed  in  equity,  to  oblige  him  to  in- 
dorse.2  If  a  bill  come  back  to  a  previous  indorser,  he  may  strike 
out  the  intermediate  indorsements  and  sue  in  his  own  name,  as 
indorsee ;  but  he  has,  in  general,  no  remedy  against  the  inter- 
mediate parties ;  ^  if,  however,  the  circumstances  are  such  that 
they  would  have  no  right  against  him  as  an  indorser  to  them, 
if  they  were  compelled  to  pay,  then  he  may,  perhaps,  have  a 
claim  against  them.^  And  it  seems  now  to  be  settled  that  an 
indorser  who  comes  again  into  possession  of  the'  note  or  bill,  is 
to  be  taken,  merely  on  the  evidence  of  his  possession,  as  the 
holder  and  proprietor  of  the  bill,  unless  the  contrary  is  made  to 
appear.^ 

'  Rose  V.  Sims,  1  B.  «&  Ad.  521. 

2  Thus,  in  Watkins  v.  Maule,  2  Jac.  &  Walk.  237,  Sir  Thomas  Plumer  said:  "When 
a  note  is  handed  over  for  valuable  consideration,  the  indorsement  is  a  mere  form  ;  the 
transfer  for  consideration  is  the  substance ;  it  creates  an  equitable  right,  and  entitles 
the  party  to  call  for  the  form.  The  other  is  bound  to  do  that  formal  act,  in  order  to 
substantiate  the  right  of  the  party  to  whom  he  has  transferred  it."  And  see  Smith  v. 
Pickering,  Peake,  50 ;  Ex  parte  Rhodes,  3  Mont.  &  Ayr.  217  ;  Ex  parte  Greening,  13 
Ves.  206. 

^  The  reason  is  that  such  intermediate  parties  would  have  their  remedy  over  against 
him.  Byles  on  Bills,  114  ;  Bishop  v.  Hay  ward,  4  T.  R.  470;  Britten  v.  Webb,  2  B.  & 
Cr.  483. 

*  Wilders  v.  Stevens,  15  M.  &  W.  208.  And  Bishop  v.  Hayward,  supra.  There,  A 
having  declared  against  B  on  a  promissory  note  made  by  C  to  A,  by  him  indorsed  to 
B,  and  by  B  again  indorsed  to  A,  and  having  obtained  a  verdict,  the  judgment  M'as 
arrested.  But  Lord  Kenyon,  in  delivering  his  opinion,  said  :  "  I  do  not  say  but  that 
there  may  be  circumstances  which,  if  disclosed  on  the  record,  might  entitle  the  plaintiff 
to  recover  against  the  defendant  on  this  note;  but  we  are  now  galled  upon  to  form  a 
judgment  on  the  title  which  he  has  disclosed."  And  see  further,  Williams  v.  Clarke, 
16  M.  &  W.  834  ;  Smith  v.  Marsack,  6  C.  B.  486 ;  Morris  v.  Walker,  15  Q.  B.  589. 

^  It  was  so  held  by  the  Supreme  Court  of  the  United  States,  in  Dugan  v.  United 
States,  3  Wheat.  172.  Livingston,  J.,  in  delivering  the  opinion  of  the  court,  said: 
"After  an  examination  of  the  cases  on  this  subject,  (which  cannot  all  of  them  be  recon- 
ciled,) the  court  is  of  opinion  that,  if  any  person  who  indorses'  a  bill  of  exchange  to 
another,  whether  for  value,  or  for  the  purpose  of  collection,  shall  come  to  the  possession 
thereof  again,  he  shall  be  regarded,  unless  the  contrary  appear  in  evidence,  as  the  bona 
fide  holder  and  proprietor  of  such  bill,  and  shall  be  entitled  to  recovci",  notwithstanding 
there  may  be  on  it  one  or  more  indorsements  in  full,  subsequent  to  the  one  to  him, 


en.  IX.]  OF   NEGOTIABLE    PAPER.  101 

The  holder  of  a  bijl  indorsed  and  deposited  with  him  for  col- 
lection, or  only  as  a  trustee,  can  use  it  only  in  conformity  with 
the  trust.^  And  if  the  indorsement  express  that  it.  is  to  be  col- 
lected for  the  indorser's  use,  or  use  any  equivalent  language,  this 
is  notice  to  any  one  who  discounts  it;  and  the  party  discounting 
against  this  notice,  will  be  obliged  to  deliver  the  note,  or  pay  its 
contents  if  collected,  to  the  indorser.^ 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper. —  A  holder 
who  took  the  note  after  it  became  due,  is  open  to  any  defence 
which  could  have  been  made  against  the  party  from  whom  he 
took  it;  because  he  necessarily  has  notice  that  the  bill  or  note  is 
dishonored,  and-  should  ascertain  whether  any,  and  if  so,  what 
defence  is  set  up.^  So,  too,  if  he  takes  the  note  or  bill  before  it 
is  due,  but  with  notice  or  knowledge  of  fraud  or  other  good  de- 
fence, that  defence  may  be  made  against  him.  Otherwise,  no 
defence  can  be  made  against  one  w^ho  becomes  an  indorsee  for 
consideration,  which  does  not  spring  out  of  the  relations  between 
himself  and  the  defendant.^  Nor  is  an  indorsee  liable  to  such  de- 
fences as  arise  out  of  collateral  matters ;  but  only  to  those  which 
attach  to  the  note  or  bill  itself.  Hence,  it  is  said  he  is  not  liable 
to  a  set-dfF  between  the  original  payee  and  the  maker.^     Nor  is 

without  producing  any  receipt  or  indorsement  back  from  either  of  such  indorsers,  whose 
names  he  may  stril<e  from  the  bill  or  not,  as  he  may  think  proper."  .And  see.  to  the 
same  effect.  Green  v.  Jackson,  15  Maine,  136;  Eaton  y.  McKown,  34  Maine,  510; 
Earbce  v.  Wolfe,  9  Porter,  366;  Bond  v.  Storrs,  13  Conn.  412. 

1  Gopgerley  v.  Cuthbert,  5  B.  &  P.  170 ;  Evans  v.  Kymer,  1  B.  cfe  Ad.  528. 

2  Thus,  in  Treuttel  v.  Barandon,  8  Taunt.  100,  a  bill  was  indorsed  by  the  payee  in  , 
tins  form :  "  Pay  A  B,  or  order,  for  the  account  of  C  D."  A  B  pledged  it  with  the 
defendant,  who  advanced  money  upon  it  to  A  B  personally.  Held,  that  the  defendant 
had  sufficient  notice,  from  the  indorsement,  that  A  B  had  no  authority  to  raise  money 
on  the  bill  for  his  own  benefit,  and  therefore  could  not  defend  an  action  of  trover  for 
the  bill,  brought  by  C  D.  So,in  Sigourney  v.  Lloyd,  8  B.  &  Cr.  622,  5  Bing.  525, 
where  the  plaiutitf,  a  merchant  in  Boston,  remitted  a  bill  to  B,  his  agent  in  London, 
indorsing  it  in  this  form  :  "  Pay  B,  or  his  order,  for  my  use  ;  "  and  B  discounted  the 
bill,  with  his  bankers,  and  afterwards  failed,  and  the  bankers,  to  whom  he  was  indebted 
in  more  than  the  amount  of  the  bill,  received  payment  of  it  at  maturity  from  the  ac- 
ceptors ;  it  was  held  that  the  bankers  were  liable  to  the  plaintiff  in  an  action  for  money 
had  and  received.  And  see  Snee  v.  Prescot,  1  Atk.  245 ;  Edie  v.  The  East  India  Co. 
2  Burr.  1227  ;  Ancher  i-.  The  Bank  of  England,  Doug.  637. 

^  Brown  v.  Davies,  3  T.  R.  80;  Boehm  v.  Sterling,  7  id.  423;  Tinson  v.  Francis,  1 
Campb.  19.  In  this  last  case.  Lord  Ellenhorough  said :  "After  a  bill  or  note  is  due,  it 
comes  disgraced  to  the  indorsee,  and  it  is  his  duty  to  make  inquiries  concerning  it.  If 
he  takes  it,  though  he  gives  a  full  consideration  for  it,  he  takes  it  on  the  credit  of  the 
indorscr,  and  subject  to  all  the  equities  with  which  it  may  be  incumbered." 

*  Brown  v.  Davies,  3  T.  R.  82. 

=  This  is  well  settled  in  England.  The  point  was  first  decided  in  Burrough  v.  Moss, 
10  B.  &  Cr.  558.  That  was  an  action  on  a  promissory  note  made  by  the  defendant, 
payable  to  one  Fearn,  and  by  hira  indorsed  to  the  plaintiff  after  it  became  due.     For 

9*      . 


102  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

the  mere  want  of  consideration  between  payee  and  maker  one  of 
those  equities  to  which  a  holder  for  value  after  dishonor,  even 
with  notice,  is  liable,  provided  the  bill  or  note  was  originally  in- 
tended to  be  without  consideration,  as  in  the  case  of  an  accom- 
modation bill  or  note,  or  one  intended  as  a  gift.'  But  it  seems 
that,  if  a  bill  be  delivered  as  security  for  a  balance  on  a  running 
account,  and,  when  it  becomes  due,  the  balance  is  in  favor  of  the 
depositor  who  does  not  withdraw  the  bill,  and  afterwards  the 
balance  becomes  against  the  depositor,  the  holder  may  not  only 
hold  it  to  secure  the  balance,  but  will  not  be  regarded  as  the  trans- 
feree of  an  overdue  bill.^  And  in  the  absence  of  any  evidence 
on  the  point,  the  presumption  of  law  is,  that  the  bill  was  trans- 
ferred before  maturity.^  And  a  promissory  note  payable  on  de- 
mand, is  considered  as  intended  to  be  a  continuing  security,  and 
therefore  as  not  overdue,  unless  very  old,  without  some  evidence 
of  demand  of  payment  and  refusal.'*  But  it  is  not  so  with  a 
check;  for  this  should  be. presented  without  unreasonable  delay. 


the  defendant,  it  v/as  insisted  that  he  had  a  right  to  set  off  against  the  plaintiff's  claim 
a  debt  due  to  him  from  Fearn,  who  lield  the  note  at  the  time  when  it  became  duQ.  But 
/joyej/,  J.,  delivering  the  opinion  of  the  court,  said :  "  Tlie  impression  on  my  mind 
was,  that  the  defendant  was  entitled  to  tlie  setoff;  but,  on  discussion  of  the  matter 
with  my  Lord  Tenterden  and  my  learned  brotliers,  I  agree  witli  them  in  thinking  that 
the  indorsee  of  an  overdue  bill  or  note  is  liable  to  such  equities  only  as  attach  on  the 
bill  or  note  itself,  and  not  to  claims  arising  out  of  collateral  matters."  And  this  de- 
cision has  been  uniformly  adhered  to  in  England.  See  Stein  v.  Yglesias,  1  Cr.  M.  & 
Eos.  565  :  Watkins  v.  Bensusan,  9  M.  &  W.  422  ;  Whitehead  v.  Walker,  10  id.  696; 
Oulds  V.  Harrison,  10  Exch.  572.  But  in  this  country,  there  is  no  uniform  rule.  In 
some  cases,  it  is  regulated  by  statute.     See  1  Parsons  on  Con.  214,  n.  (c). 

1  See  ante,  p.  97,  and  notes. 

"  Atwood  V.  Crowdic,  1  Stark.  483. 

3  Parkin  'v.  Moon,  7  C.  &  P.  408;  Lewis  v.  Parker,  4  Ad.  &  El.  838;  Pinkerton  v. 
Bailey,  8  Wend.  600  ;  Burnham  v.  Wood,  8  N.  H.  334 ;  Burnham  v.  Webster,  19  Maine, 
232;  Ranger  v.  Gary,  1  Met.  369  ;  Washburn  v.  Ramsdell,  17  Vt.  299. 

*  Thus,  in  Brooks  v.  Mitchell,  9  M.  &  W»  15,  it  was  held  that  a  promissory  note, 
payable  on  demand,  cannot  be  treated  as  overdue,  so  as  to  affect  an  indorsee  with  any 
ecpiities  against  the  indorser,  merely  because  it  is  indorsed  a  number  of  years  after  its 
date,  and  'po  interest  had  been  paid  on  it  for  several  years  before  such  indorsement. 
And  Parke,  B.,  said:  "If  a  promissory  note  payable  on  demand,  is,  after  a  certain 
time,  to  be  treated  as  overdue,  although  payment  has  not  been  demanded,  it  is  no 
longer  a  negotiable  instrument.  But  a  promissory  note  payable  on  demand,  is  intended 
to  be  a  continuing  security.  It  is  quite  unlike  the  case  of  a  check,  which  is  intended  to 
be  presented  speedily."     And  sec  Barough  v.  White,  4  B.  &  Cr.  325  ;  Cripps  v.  Davis, 

12  M.  &  W.  165.  But  in  this  country,  it  is  generally  held  that,  if  a  note  payable  on 
demand,  is  negotiated  a  long  time  after  it  is  made,  it  is  to  be  regarded  as  a  note  ovei'- 
due.  See  Furman  v.  Haskin,  2  Caines,  369;  Hendricks  v.  Judah,  1  Johns.  319; 
Thurston  v.  M'Kown,  6  Mass.  428;  Ayer  i'.  Ilutchins,  4  id.  370;  Dennett  v.  Wyman, 

13  Vt.  485;  Camp  v.  Scott,  14  id.  387;  Ranger  v.  Gary,  1  Met.  369;  Wethey  v. 
Andrews,  3  Hill,  582.  There  is,  however,  no  precise  time  at  which  such  a  note  is  to  be 
deemed  dishonored  ;  it  must  depend  on  the  circumstances  of  the  case,  and  the  situation 
of  the  parties.  Losee  v.  Dunkin,  7  Johns.  70;  Sanford  v.  Mickles,  4  id.  224.  And  it  is 
a  question  of  law,  and  not  of  fact.     Sylvester  v.  Crapo,  15  Pick.  93. 


CH.  IX.]  OF  NEGOTIABLE   PAPER.  103 

and,  although  a  taker  after  one  clay's  delay  may  not  be  afiected, 
nor  a  taking  after  six  days  be  held  as  conclusive  evidence  of 
negligence  or  fraud,  yet,  the  jury  may  infer  this.^ 

Sometimes  a  check  is  drawn  by  A  in  favor  of  C,  on  a  bank  in 
which  C  is  a  depositor.  Then,  generally,  the  bank  will  be  held 
to  have  received  the  check  as  the  agent  of  C,  and,  by  giving  him 
notice  of  the  non-payment  for  want  of  funds,  the  bank  will  be 
discharged.-  But  it  is  said  that,  if,  while  the  bank  holds  the 
check,  the  drawer  deposits  funds  enough  to  pay  it,  the  bank  must 
appropriate  these  funds  to  that  payment,  although  the  drawer  is 
indebted  to  the  bank  in  a  larger  balance.-^ 

If  a  holder  sends  back  the  bill  or  note  as  of  no  value  to  him, 
or  for  any  such  reason,  his  title  dies  and  cannot  be  revived  by 
his  merely  getting  it  back  into  his  possession  again,  without  a 
new  transfer  to  him.^ 

It  is  most  important  to  the  holder  of  negotiable  paper  to  know 
distinctly  what  his  duties  are  in  relation  to  presentment  for  ac- 
ceptance or  payment,  and  notice  to  others  interested,  in  case  of 
non-acceptance  or  non-payment. 

3.  Of  presentment  for  acceptance.  —  It  is  always  prudent  for 
the  holder  of  a  bill  to  present  it  for  acceptance  without  delay ; 
for,  if  it  be  accepted,  he  has  new  security  ;  if  it  be  not,  the  former 
parties  are  immediately  liable;  and  it  is  but  just  to  the  drawer 
to  give  him  as  early  an  opportunity  as  may  be  to  withdraw  his 
funds  or  obtain  indemnity  from  a  debtor  who  will  not  honor  his 
bills.  And  if  a  bill  is  payable  at  sight,  or  at  a  certain  period 
after  sight,  there  is  not  only  no  right  of  action  against  anybody 
until  presentment,^  but,  if  this  be  delayed  beyond  a  reasonable 
time,  the  holder  loses  his  remedy  against  all  previous  parties.*^ 
And,  although  the  question  of  reasonable  time  is  generally  one 
only  of  law,  yet,  in  this  connection  it  seems  to  be  treated  as  a 
mixed  question  of  law  and  fact,  and  as  such  given  to  the  jury ; " 

1  Down  V.  Hailing,  4  B.  &  Cr.  330 ;  Eothschild  v.  Corney,  9  id.  388. 

2  Bovd  V.  Emmerson,  2  Ad.  &  El.  184. 

3  Kilsby  V.  Williams,  5  B.  &  Aid.  815. 
*  Cartwright  v.  Williams,  2  Stark.  340. 

5  Holmes  V.  Kcnison,  2  Taunt.  323  ;  Dixon  v.  Nuttall,  1  Cr.  M.  &  Res.  307. 

^  Kobinson  z;.  Ames,  20  Johns.  14G;  Wallace  r.  Agry,  4  Mason,  336,  5  id.  118; 
Aymar  v.  Beers,  7  Cow.  705. 

7  Muilman  v.  D'Eguino,  2  H.  Bl.  505;  Fry  v.  Hill,  7  Taunt.  397;  Shutc  v.  Robins, 
M.  &  Malk.  133  ;  Mellish  v.  Ilawdon,  9  Bing.  416;  Strakcr  v.  Graham,  4  M.  &  W.  721. 
But  sec,  contrdf  Aymar  v.  Beers,  7  Cow.  705. 


104  ELEMENTS   OP   MERCANTILE    LAW.  [CH.  IX. 

there  is  no  certain  rule  in  relation  to  what  is  reasonable  time. 
If  a  bill  be  payable  on  demand,  it  is  not  like  a  promissory  note, 
but  must  be  presented  within  a  reasonable  time,  or  the  drawer 
will  be  discharged.^  If  the  holder  puts  a  bill  payable  after  sight, 
into  circulation,  a  much  larger  delay  in  presentment  would  be 
allowed  than  if  he  kept  it  in  his  own  possession.^ 

The  presentment  should  be  made  during  business  hours ;  but 
it  is  said  that  in  this  country  they  extend  through  the  day  and 
until  evening,  excepting  in  the  case  of  batiks.^  But  a  distinct 
usage  would  probably  be  received  in  evidence,  and  permitted  to 
affect  the  question. 

Ill  health  or  other  actual  impediment  without  fault,  may  ex- 
cuse delay  on  the  part  of  the  holder;  but  not  .the  request  of  the 
drawer  to  the  drawee  not  to  accept.* 

Presentment  for  acceptance  should  be  made  to  the  drawee 
himself,  or  to  his  agent  authorized  to  accept.^  And  when  it  is 
presented,  the  drawee  may  have  a  reasonable  time  to  consider 
whether  he  will  accept,  during  which  time  the  holder  is  justified 
in  leaving  the  bill  with  him.  And  it  seems  that  this  time  would 
be  as  much  as  twenty-four  hours,  unless,  perhaps,  the  mail  goes 
out  before.^  And  if  the  holder  gives  more  than  twenty-four 
hours  for  this  purpose,  he  should  inform  the  previous  parties  of 
it.'^  If  the  drawee  has  changed  his  residence,  the  holder  should 
use  due  diligence  to  find  him ;  and  what  constitutes  due  or 
reasonable  diligence,  is  a  question  of  fact  for  a  jury.^     And  if  he 


1  Elting  V.  Brinkerhoff,  2  Hall,  459  •,  Dumont  v.  Pope,  7  Blackf.  367.  See,  ante, 
p.  102,  n.  4,  and  p.  103,  n.  1. 

2  Mailman  v.  D'Eguino,  2  H.  Bl.  5G5.  In  this  case,  BuUer,  J.,  said:  "I  think  a  rule 
may  tlius  far  be  laid  down  as  to  laches,  with  regard  to  bills  payable  at  sight  or  at  a 
certain  time  after  sight,  namely,  that  they  ought  to  be  put  in  circulation.  If  they  arc 
circulated,  the  parties  are  known  to  the  world,  and  their  credit  is  looked  to ;  and  if  a 
bill  drawn  at  three  days'  sight,  were  kept  out  in  that  way  for  a  year,  I  cannot  si\y  there 
would  be  laches."    And  sec,  to  the  same  effect,  Goupy  v.  Harden,  7  Taunt.  159. 

3  Cayuga  County  Bank  v.  Hunt,  2  Hill,  635. 

*  Hill  V.  Heap,  Dowl.  &  Ryl.  N.  P.  57  ;  Byles  on  Bills,  141. 

s  Therefore,  where  the  holder's  servant  called  at  the  drawee's  residence,  and  showed 
the  bill  to  some  person  in  the  drawee's  tanyard,  who  refused  to  accept  it,  but  the  wit- 
ness did  not  know  the  drawee's  person,  nor  could  he  swear  that  the  person  to  whom  he 
offered  the  bill  was  he,  or  represented  himself  to  be  so,  it  was  held  insufficient.  Cheek 
V.  Roper,  5  Esp.  175. 

6  Byles  on  Bills,  142;  Ingram  v.  Foster,  2  Smith,  242. 

7  Ingram  v.  Foster,  2  Smith,  242. 

8  See  Collins  v.  Butler,  2  Strange,  1087;  Bateman  v.  Joseph,  12  East,  433.  But  it 
is  well  settled  in  this  country  that,  if  the  drawee  has  removed  out  of  the  jurisdiction, 
the  holder  need  not  follow  him.  Anderson  v.  Drake,  14  Johns.  1 14 ;  M'Gruder  v.  Bank 
of  Washington,  9  Wheat.  598 ;  Gillespie  v.  Hannahan,  4  McCord,  503  ;  Reid  v.  Morri- 


en.  IX.]  OF   NEGOTIABLE   PAPER.  105 

be  dead,  the  holder  should  ascertain  who  is  his  personal  repre- 
sentative, if  he  has  one,  and  present  the  bill  to  him.^  And  in 
an  action  against  the  drawer,  for  non-acceptance,  qot  only  that, 
but  presentment  for  acceptance  should  be  alleged.^  If  the  bill 
be  drawn  upon  the  drawee  at  a  particular  place,  it  is  regarded  as 
dishonored  if  the  drawee  has  absconded  so  that  the  bill  cannot 
be  presented  for  acceptance.^ 

4.  Of  presentment  for  demand  of  payment. —  The  next  question 
relates  to  the  duty  of  demanding  payment;  and  here  the  law  is 
much  the  same  in  respect  to  notes  and  bills. 

^  A  demand  is  sufficient  if  made  at  the  usual  residence  or  place 
of  business  of  the  payer,  of  himself,  or  of  an  agent  authorized  to 
pay ;  "*  and  this  authority  may  be  inferred  from  the  habit  of  pay- 
ing, especially  in  the  case  of  a  child,  a  wife,  or  a  servant.  The 
demand  should  not  be  made  in  the  streets.^  When  made,  the 
bill  or  note  should  be  exhibited;*^  and  if  lost,  a  copy  should  be 
exhibited,  although  this  does  not  seem  absolutely  necessary.'^ 
And  when  the  payer  calls  on  the  holder,  and  declares  to  him  that 
he  shall  not  pay,  and  desires  him  to  give  notice  to  the  indorsers, 
this  constitutes  demand  and  refusal,  provided  this  declaration  be 
made  at  the  maturity  of  the  paper;  but  not  if  it  may  be  made 
before,  because  the  payer  may  chaiTge  his  intention.^ 

Bankruptcy  or  insolvency  of  the  payer  is  no  excuse  for  non- 
demand  ;  '•'  although  the  shutting  up  of  a  bank,  perhaps,  may  be 
regarded  as  a  refusal  to  all  theij  creditors,  to  pay  their  notes.^^ 
And   absconaing  is  a  sufficient  excuse ;  ^^  but  if  the  payer  has 

son,  2  "VV.  &  S.  401  ;  Taylor  v.  Sn3'der,  3  Denio,  145.  But  in  such  case,  the  bill  must 
be  presented  at  the  place  of  the  drawee's  former  residence.  Wheeler  v.  Field,  C  Met.  290. 

1  Gower  v.  Moore,  2.")  Maine,  16  ;  Landry  v.  Stansbury,  10  Louis.  484. 
■  2  Mercer  v.  Southwell,  2  Show.  180. 

^  Anonymous,  1  Ld.  Raym.  743;  Putnam  v.  Sullivan,  4  Mass.  45;  Gilbert  r.  Dennis, 
3  Met.  495,  499,  per  ^'Shaiv,  C.  J.;  Lehman  v.  Jones,  1  W.  &  S.  126.  And  see  ante, 
p.  104,  n.  8. 

*  Brown  v.  M'Dermot,  5  Esp.  265. 

5  King  V.  Holmes,  11  Penn.  St.  456. 

s  Freeman  v.  Boynton,  7  Mass.  483 ;  Mussou  v.  Lake,,4  How.  262 ;  Bank  of  Ver- 
gennes  v.  Cameron,' 7  Barb.  143. 

"^  See  Hinsdale  v.  Miles,  5  Conn.  331. 

8  Gilbert  v.  Dennis,  3  Met.  495. 

9  Russell  V.  Langstafte,  Doug.  514;  Ex  parte  Johnston,  3  Dea.  &  Ch.  433;  Bowes  v. 
Howe,  5  Taunt.  30;  Gower  «;.  Moore,  25  Maine,  16;  Ireli^nd  v.  Kip,  Anthon,  142; 
Shaw  V.  Reed,  12  Pick.  132;  Groton  v.  Dallheim,  6  Greenl.  476;  Holland  v.  Turner, 
10  Conn.  308. 

1"  See  Byles  on  Bills,  158.     But  see  Howe  v.  Bowes,  16  East,  112,  5  Taunt.  30. 
"  Sec  ante,  p.  105,  n.  3. 


106  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

shut  up  his  house,  the  holder  must  nevertheless  inquire  after  him, 
and  find  him,  if  he  can  by  proper  efforts.^  If  the  payer  be  dead, 
demand  should  be  made  at  his  house,  unless  he  have  personal 
representatives,  and  in  that  case,  of  them.^  And  if  the  holder  die, 
presentment  should  be  made  by  his  personal  representatives.^  It 
is  said  that  both  the  death  and  insolvency  of  the  payer  do  not 
relieve  the  holder  from  the  duty  of  demanding  payment.*  But 
it  seems  to  be  held  in  one  case  that,  where  the  maker  of  a  nego- 
tiable note  was  dead  at  the  time  the  indorsement  was  made,  the 
indorser  was  chargeable  without  demand  on  the  maker.^ 

If  the  drawer  has  no  effects  in  the  hands  of  the  drawee,  and 
has  made  no  arrangement  equivalent  to  having  effects  there,  non- 
presentation  for  payment  is  no  defence  as  to  him.^ 

Impossibility  of  presenting  a  bill  for  payment,  without  the 
fault  of  the  holder,  as  the  actual  loss  of  a  bill,  or  the  like,  will 
excuse  some  delay  in  making  a  demand  for  payment ;  but  not 
more  than  the  circumstances  require.'' 

In  this  country,  all  negotiable  paper  payable  at  a  time  certain, 
is  entitled  to  grace,  which  here  means  three  days  delay  of  pay- 
ment, unless  it  be  expressly  stated  and  agreed  that  there  shall  be 
no  grace ;  and  a  presentment  for  payment  before  the  last  day  of 
grace,  is  premature,  the  note  not  being  due  until  then.^     If  the 

1  Ellis  V.  Commercial  Bank  of  Natchez,  7  How.  (Miss.)  294. 

2  Sec  ante,  p.  105,  n.  1 ;  Chitty  on  Bills,  357. 
'^  Chitty  on  Bills,  357. 

*  Johnson  v.  Harth,  1  Bailey,  482. 

*  Davis  V.  Francisco,  11  Missouri,  572. 

s  Thus,  in  Terry  v.  Parker,  6  Ad.'&  El  502,  it  was  held  that,  if  tl^  drawee  of  a  bill 
of  exchange  has  no  effects  in  the  hands  of  the  drawee  at  the  time  of  drawing  the  bill, 
and  of  its  maturity,  and  has  no  ground  to  expect  that  it  will  be  paid,  it  is  not  neces- 
sary to  present  the  bill  at  maturity;  and  if  it  be  presented  two  days  after,  and  payment 
be  refused,  the  drawer  is  liable.  And  Lord  Denman  said:  "Many  cases  establish  that 
notice  of  dishonor  need  not  be  given  to  the  drawer  in  such  a  case;  and  the  reason  as- 
signed is,  because  he  is  in  no  respect  prejudiced  by  wapt  of  such  notice,  having  no 
remedy  against  any  other  party  on  the  bill.  This  reason  equally  applies  to  want  of 
presentment  for  payment,  since,  if  the  bill  were  presented  and  paid  by  the  drawee,  the 
drawer  would  become  indebted  to  him  in  the  amount,  instead  of  being  indebted  to  the 
holder  of  the  bill,  and  would  be  in  no  way  benefited  by  such  presentment  and  pay- 
ment." And  see  Commercial  Bank  of  Albany  v.  Hughes,  17  Wend.  94;  Dickins  v. 
Beal,  10  Pet.  572;  Foard  v.  Womack,  2  Ala.  368. 

■?  Aborn  v.  Bosworth,  1  R.  I.  401  ;  Patience  v.  Townley,  2  Smith,  223.  But  where  a 
bill  payable  in  London,  was  by  mistake  sent  from  Birmingham,  where  the  holder  re- 
sided, to  Liverpool,  to  be  presented  for  payment,  and  the  mistake  was  discovered  and 
attempted  to  be  cured  by  sending  the  bill  to  London,  where  it  did  not  arrive  until  two 
days  after  its  maturity,  but  would  have  arrived  in  season  but  for  the  oversight  or  negli- 
gence of  the  clerks  of  the  post-office  in  Liverpool,  it  was  held  that  such  mistake  or 
negligence  was  not  a  sufficient  excuse  for  not  presenting  the  bill  on  the  day  it  fell 
due. 

8  Wiffen  17.  Roberts,  1  Esp.  261 ;  Mitchell  v.  Degrand,  1  Mason,  176. 


CH.  IX.]  •  OF   NEGOTIABLE   PAPER.  107  ' 

last  day  of  grace  falls  on  a  Sunday,  or  on  a  legal  holiday,  the 
note  is  due  on  the  Saturday,  or  other  day  before  the  holiday.' 
But  if  there  be  no  grace,  and  the  note  falls  due  on  a  Sunday,  or    , 
other  holiday,  it  is  not  payable  until  the  next  day.^ 

Generally,  if  a  bill  or  note  be  payable  in  or  after  a  certain 
number  of  days,  from  date,  sight,  or  demand,  in  counting  these 
days,  the  day  of  date,  sight,  or  demand  is  excluded,  and  the  day 
on  which  it  falls  due  included.^ 

Although  payment  must  be  demanded  promptly,  it  need  not 
be  done  instantly ;  a  holder  has  all  the  business  part  of  the  day 
in  which  the  bill  falls  due  to  make  his  demand  in.'^ 

Bills  and  notes  payable  on  demand,  should  be  presented  for 
payment  within  a  reasonable  time.  If  said  to  be  "  on  interest," 
this  strengthens  the  indication  that  they  were  intended  to  remain 
for  a  time  unpaid  and  undemanded.  But  to  hold  indorsers,  they 
should  still  be  presented  within  whatever  the  circumstances  may 
make  a  reasonable  time ;  and  this  is  such  a  time  as  the  interests 
and  safety  of  all  concerned  may  require.^  A  bill  or  note  in 
which  no  time  of  payment  is  expressed,  is  held  to  be  payable  on 
demand.^     And  evidence  to  prove  it  otherwise  is  inadmissible.''' 

1  Ransom  v.  Mack,  2  Hill,  587 ;  Cuyler  v.  Stevens,  4  Wend.  5G6  ;  Sheldon  v.  Ben- 
ham,  4  Hill,  129  ;  Homes  v.  Smith,  20  Maine,  264  ;  Tassell  v.  Lewis,  1  Ld.  Eaym.  743 ; 
Haynes  v.  Birks,  3  B.  &  P.  599 ;  Bussard  v.  Levering,  6  Wheat.  102. 

-  Salter  v.  Burt,  20  Wend.  205  ;  Avery  v.  Stewart,  2  Conn.  69  ;  Delamater  v.  Miller, 
1  Cow.  75 ;  Barrett  v.  Allen,  10  Ohio,  426.  And  if  the  nominal  day  of  payment,  in 
an  instrument  which  is  entitled  to  grace,  happens  to  fall  on  a  Sunday  or  a  holiday,  the 
days  of  grace  are  the  same  as  in  other  cases,  and  payment  is  not  due  until  the  third 
day  after.     Wooley  v.  Clements,  1 1  Ala.  220. 

3  Chitty  on  Bills,  370. 

*  Wilkins  v.  Jadis,  2  B.  &  Ad.  188;  Barclays.  Bailey,  2  Campb.  527;  Morgans. 
Davison,  1  Starkie,  114;  Cayuga  County  Bank  v.  Hunt,  2  Hill,  635. 

^  Furman  v.  Haskin,  2  Caines,  369 ;  Sioe  v.  Cunningham,  1  Cow.  408  ;  Mohawk 
Bank  v.  Broderick,  10  Wend.  304  ;  Bank  of  Utica  i'.  Smedes,  3  Cow.  662.  And  what 
is  a  reasonable  time  in  such  case  is  a  question  of  law.  See  cases  supra.  In  Seaver  v. 
Lincoln,  21  Pick.  267,  it  was  held  that  a  demand  on  the  maker  of  a  note  payable  on 
demand,  made  on  the  seventh  day  from  the  date,  was  made  within  a  reasonable  time 
to  charge  the  indorser.  And  Shaiv,  C.  J.,  said :  "  One  of  the  most  difficult  questions 
presented  for  the  decision  of  a  court  of  law,  is,  what  shall  be  deemed  a  reasonable  time, 
within  which  to  demand  payment  of  the  maker  of  a  note  payable  on  demand,  in  order 
to  charge  the  indorser.  It  depends  upon  so  many  circumstances  to  determine  what  is 
a  reasonable  time  in  a  particular  case,  that  one  decision  goes  but  little  way  in  estab- 
lishing a  precedent  for  another.  In  the  present  case,  however,  the  court  have  no  hesi- 
tation in  stating  it  as  their  opinion,  that  a  demand  within  seven  days  of  the  date  of  the 
note  was  within  a  reasonable  time  to  charge  the  indorser."  In  Vreeland  v.  Hyde,  2 
Hall,  429,  it  was  held  that  the  rule  requiring  promissory  notes,  payable  on  demand,  to 
be  presented  within  a  "  reasonable  time,"  was  applicable  chiefly  to  those  which  are 
made  for  commercial  purposes. 

«  "Whittock  V.  Underwood,  2  B.  &  Cr.  157, 

T  Warren  v.  Wheeler,  8  Met.  97;  Atwood  v.  Cobb,  16  Pick.  227;  Ryan  v.  Hall,  13 
Met.  520 ;  Thomson  v.  Ketchum,  8  Johns.  1 89. 


108  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  IX. 

The  holder  of  a  check  should  present  it  at  once;  for  the  drawer 
has  a  right  to  expect  that  he  will ;  it  should,  therefore,  be  pre- 
sented, or  forwarded  for  presentment,  in  the  course  of  the  -day 
following  that  in  which  it  was  received,  or,  upon  failure  of 
the  bank,  the  holder  will  lose  the  remedy  he  would  otherwise 
have  had  against  the  person  from  whom  he  receives  it.^  If  the 
drawer  of  the  check  had  no  funds,  he  is  liable  always.^ 

Every  demand  or  payment  should  be  made  at  the  proper 
place,  which  is  either  the  place  of  residence  or  of  business,  and 
within  the  proper  hours  of  business.-^  If  made  at  a  bank  after 
hours  of  business,  if  the  officers  are  there,  and  refuse  payment  for 
want  of  funds,  the  demand  is  sufficient.^ 

A  note  payable  at  a  particular  place,  should  be  demanded  at 
that  place ;  and  a  bill  drawn  payable  at  a  particular  place,  should 
be  demanded  there,  in  order  to  charge  antecedent  parties;^  but 

'  Kickford  v.  Ridge,  2  Campb.  539  ;  Boddington  v.  Schlenclier,  4  B.  &  Ad.  752 ; 
Moule  V.  Brown,  4  Bing.  N.  C.  266. 

2  Hoyt  V.  Seeley,  18  Conn.  353. 

2  If  the  bill  or  note  be  payable  at  a  bank,  it  must  be  pi'esented  strictly  within  the 
usual  banking  hours.  Parker  v.  Gordon,  7  East,  385  ;  Elford  v.  Teed,  1  M.  &  Selw. 
28.  But  if  it  be  not  payable  at  a  bank,  it  may  be  presented  at  any  time  of  the  day 
when  the  payer  may  reasonably  be  expected  to  be  found^at  his  place  of  residence  or 
business,  though  it  be  six,  seven,  or  eight  o'clock  in  the  evening.  Thus,  in  Barclay  v. 
Bailey,  2  Campb.  527,  it  was  held  that  the  presentment  of  a  bill  of  exchange  for  pay- 
ment at  the  house  of  a  merchant  residing  in  London,  at  8  o'clock  in  the  evening  of  the 
day  it  became  due,  was  sufficient  to  charge  the  drawer.  And  Lord  Ellenhorough  said : 
"  A  common  trader  is  different  from  bankers,  and  has  not  any  peculiar  hours  for  pay- 
ing or  receiving  money.  If  the  presentment  had  been  during  the  hours  of  rest,  it 
would  have  been  altogether  unavailing ;  but  eight  in  the  evening  cannot  be  considered 
an  unreasonable  hour  for  demanding  payment  at  the  house  of  a  private  merchant  who 
has  accepted  a  bill."  So,  in  Wilkins  v.  Jadis,  2  B.  &  Ad.  188,  it  was  held  that  a  pre- 
sentment of  a  bill  of  exchange  for  payment  at  a  house  in  London,  where  it  was  made 
payable,  at  eight  o'clock  in  the  evening  of  the  day  it  became  due,  was  sufficient  to 
charge  the  drawer,  although  at  that  hour  the  house  was  shut  up,  and  no  person  was 
there  to  pay  the  bill.  And  Lord  Tenterdm  said :  "  As  to  bankers,  it  is  established,  with 
reference  to  a  well-known  rule  of  trade,  that  a  presentment  out  of  the  hours  of  business 
is  not  sufficient ;  but  in  other  cases  the  rule  of  law  is,  that  the  bill  must  be  presented  at 
a  reasonable  hour.  A  presentment  at  twelve  o'clock  at  night,  when  a  person  has  retired 
to  rest,  would  be  unreasonable ;  but  I  cannot  say  that  a  presentment  between  seven 
and  eight  in  the  evening  is  not  a  presentment  at  a  reasonable  time."  And  see  Morgan 
V.  Davison,  1  Stark.  114.     See  also  ante,  p.  104,  n.  3. 

*  Thus,  in  Garnett  v.  Woodcock,  6  M.  &  S.  44,  1  Stark.  475,  it  was  held  that  a  pre- 
sentment of  a  bill  of  exchange  at  the  banking-house  Vvhere  payable,  after  banking 
hours,  is  sufficient  if  a  person  be  stationed  at  the  banking-house  and  return  for  answer 
that  there  are  no  orders.  And  the  court  said :  "  Here,  though  the  presentment  was  out 
of  banking  hours,  there  was  a  person  stationed  for  the  purpose  of  returning  an  answer, 
and  an  answer  was  returned,  the  same  as  would  have  been  if  the  presentment  had  been 
within  the  hours  of  business.  The  answer  was  not  that  the  party  came  too  late,  but 
that  there  were  no  orders ;  the  object  of  the  presentment  was,  therefore,  completed, 
after  which  it  cannot  be  open  to  either  party  to  aver  that  it  was  out  of  time."  And  see 
Henry  v.  Lee,  2  Chitty,  124  ;  Commercial  and  Railroad  Bank  v.  Hamer,  7  How.  (Miss.) 
448;  Cohca  v.  Hunt,  2  Sm.  &  Marsh.  227;  Flint  v.  Rogers,  15  Maine,  67. 

&  United  States  Bank  v.  Smith,  II  Wheat.  171 ;  Watkins  v.  Crouch,  5  Leigh,  522. 


CH.  IX.]  OF   NEGOTIABLE   PAPER.  109 

an  action  may  be  maintained  against  the  maker  or  acceptor 
without  such  demand.^  He,  however,  may  discharge  himself  of 
damages  and  costs  by  showing  that  he  was  ready  at  that  place 
with  funds.2  If  a  bill  drawn  payable  generally,  be  accepted  pay- 
able at  a  particular  place,  we  think  the  holder  may  and  should 
so  far  regard  this  as  non-acceptance  that  he  should  protest  and 
give  notiee.3  But  if  this  limited  acceptance  is  assented  to  and 
received,  it  must  be  complied  with  by  the  holder,  and  the  bill 
must  be  presented  for  payment  at  that  place,  or  the  antecedent 
parties  are  discharged.^ 

If  payable  at  a  banker's,  or  the  house  or  counting-room  of  any 
person,  and  such  banker  or  person  becomes  the  owner  at  matur- 
ity, this  is  demand  enough;  and  if  there  are  no  funds  deposited 
with  him  for  the  payment,  this  is  refusal  enough.^     If  any  house 


'  United  States  Bank  v.  Smith,  11  Wheat.  171 ;  Wolcott  v.  Van  Santvoorcl,  17  Johns. 
248;  Caldwell  v.  Cassidy,  8  Cow.  271;  Haxtun  v.  Bishop,  3  Wend.  13;  Wallace  v. 
Mc.Connell,  13  Pet.  13G;  Watkins  v.  Crouch,  5  Leigh,  522  ;  Green  v.  Goings,  7  Barb. 
652;  Carley  r.  Vance,  17  Mass.  389 ;  Payson  v.  Whitcomb,  15  Pick.  212:  Bacon  v. 
Dyer,  3  Fairf.  1 9. 

-  See  cases  cited  in  preceding  note. 

3  Thus,  in  Gammon  v.  Schmoll,  5  Taunt.  344,  it  was  held  that  if  a  person  to  whom 
a  bill  is  directed  generally,  accepts  it  payable  at  a  particular  place,  the  holder  need  not 
receive  such  qualified  acceptance,  but  may  resort  to  the  drawer  as  for  non-acceptance. 
And  see  Boehm  y.  Garcias,  1  Campb.  425,  n.;  Parker  v.  Gordon,  7  East,  385;  per 
Biiyle;/,  J.,  in  Sebag  v.  Abitbol,  4  M.  &  S.  466. 

*  See  cases  supra. 

^  Saunderson  v.  Judge,  2  H.  Bl.  509.  In  this  case,  A  made  a  promissory  note  pay- 
able to  B  or  order,  with  a  memorandum  upon  it  that  it  would  be  paid  at  the  house  of 
C,  who  was  A's  banker;  in  the  course  of  business,  the  note  was  indorsed  to  C.  In  an 
action  by  C  against  the  indorser,  it  was  held  not  necessary  to  prove  an  actual  demand 
on  A.  And  per  Curiam  :  "As  they  at  whose  house  the  note  was  to  be  paid,  were  them- 
selves the  holders  of  it,  it  was  a  sufficient  demand  for  them  to  turn  to  their  books,  and 
see  the  maker's  account  with  them,  and  a  sufficient  refusal,  to  find  that  he  had  no  effects 
in  their  hands."  The  same  question  Vas  presented  in  United  Stfttes  Bank  v.  Smith, 
11  Wheat.  171.  And  Thompson,  J.,  delivering  the  opinion  of  the  court,  said  :  "  If  the 
bank  where  the  note  is  made  payable  is  the  holder,  and  the  maker  neglects  to  appear 
there  when  the  note  falls  due,  a  formal  demand  is  impracticable  by  the  default  of  the 
maker.  All  that  can  in  fitness  be  done,  or  ought  to  be  required,  is,  that  the  books  of 
the  bank  should  be  examined,  to  ascertain  whether  the  maker  had  any  funds  in  their 
hands ;  and  if  not,  there  was  a  default,  which  gave  to  the  holder  a  right  to  look  to  the 
indorser  for  payment.  And  even  this  examination  of  the  books  was  not  required  in  the 
cases  cited  from  the  Massachusetts  Reports.  The  maker  was  deemed  in  default  by 
not  appearing  at  the  bank  to  take  up  his  note  when  it  fell  due.  We  should  incline, 
however,  to  think  that  the  books  of  the  bank  ought  to  be  examined,  to  ascertain 
whether  the  maker  had  any  balance  standing  to  his  credit;  for,  if  he  had,  the  bank 
would  have  a  right  to  apply  it  to  the  payment  of  the  note ;  and  no  default  would  be  in- 
curred by  the  maker,  which  would  give  a  right  of  action  against  the  indorser."  And 
see  Bailey  v.  Porter,  14  M.  &  W.  44  ;  Berkshire  Bank  v.  Jones,  6  Mass.  524  ;  Wood- 
bridge  V.  Brigham,  12  id.  403. 

10 


110  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  IX. 

be  designated,  a  presentment  to  any  person  there,i  or  at  the  door 
if  the  house  be  shut  up,  is  enough.^ 

If  this  direction  be  not  in  the  body  of  the  note,  but  added  at 
the  close  or  elsewhere  as  a  memorandum,  it  is  not  part  of  the 
contract,  and  should  not  be  attended  to.^ 

If  the  payer  has  changed  his  residence,  he  should  be  sought 
for  with  due  diligence ;  but  if  he  has  absconded,  this  is  an  entire 
excuse  for  non-demand.* 

Where  a  bill  or  note  is  not  presented  for  payment,  or  not  pre- 
sented at  the  time  or  to  the  person,  or  in  the  place  or  in  the  way 
required  by  law,  all  parties  but  the  acceptor  or  maker  are  dis- 
charged. 

5.  Of  protest  and  notice.  —  If  a  bill  be  not  accepted  when  prop- 
erly presented  for  that  purpose,  or  if  a  bill  or  note,  when  prop- 
erly presented  for  payment,  be  not  paid,  the  holder  has  a  further 
duty  to  perform  to  all  who  are  responsible  for  payment.  But 
this  duty  diflfers  somewhat  in  the  case  of  a  bill  and  a  note.  In 
case  of  non-payment  of  a  foreign  bill,  there  should  be  a  regular 
protest  by  a  public  ncJtary;^  but  this,  although  frequently  prac- 
tised, is  not  necessary  in  the  case  of  an  inland  bill  or  a  promis- 
sory note.^  But  notice  of  non-payment  should  be  given  to  allj 
antecedent  parties,  equally,  and  in  the  same  way,  in  the  case  ofj 
a  bill  and  of  a  note. 

The  demand  and  protest  must  be  made  according  to  the  laws] 
of  the  place  where  the  bill  is  payable.^     It  should  be  made  by  a 


1  Buxton  V.  Jones,  1  M.  &  Gr.  83.  In  this  case  a  bill  of  exchange  was  presented  for 
payment  at  the  door  of  the  house  where  the  drawee  was  described  as  living,  to  a  lodger 
who  was  coming  from  the  passage  of  the  house  into  the  street.  The  drawee  had  re- 
moved to  another  residence,  known  to  the  occupier  of  the  house,  but  not  to  the  lodger; 
and  it  was  not  shown  that  he  had  left  funds  for  payment.  Held,  that  the  presentment 
was  sufficient. 

2  Hine  v.  Allely,  4  B.  &  Ad.  624. 

^  "In  point  of  practice,"  said  Lord  Tenterden^  in  Williams  v.  Waring,  10  B.  &  Cr. 
2,  "  the  distinction  between  mentioning  a  particular  place  for  payment  of  a  note,  in  the 
body  and  in  the  margin  of  the  instrament,  has  been  frequently  acted  on.  In  the  latter 
case  it  has  been  treated  as  a  memorandum  only,  and  not  as  a  part  of  the  contract ;  and 
I  do  not  see  any  sufficient  reason  for  departing  from  that  course." 

*  See  anle,  p.  104,  n.  8,  and  p.  105,  n.  3. 

5  Gale  V.  Walsh,  5  T.  R.  239;  Rogers  v.  Stephens,  2  T.  R.  713;  Orr  v.  Maginnis, 
7  East,  359  ;  Bryden  v.  Taylor,  2  H.  &  Johns.  396  ;  Townsley  v.  Sumrall,  2  Pet.  170. 

6  Young  V.  Bryan,  6  Wheat.  146 ;  Burke  v.  McKay,  2  How.  66 ;  Bonar  v.  Mitchell, 
5  Exch.  415 ;  Bay  v.  Church,  15  Conn.  15. 

■7  Ellis  V.  Commercial  Bank,  7  How.  (Miss.)  294;  Carter  v.  Union  Bank,  7  Humph. 
548.     And  see  ante,  p.  106,  n.  2. 


CH.  IX.]  OF   NEGOTIABLE   PAPER.  Ill 

notary-public,  who  should  present  the  bill  himself;  ^  but  if  there 
be  no  notary-public  in  that  place  or  within  reasonable  reach,  it 
may  be  made  by  any  respectable  inhabitant  in  the  presence  of 
witnesses.^ 

The  protest  should  be  noted  on  the  day  of  demand  and  re- 
fusal; and  may  be  filled  up  afterwards,  even,  perhaps,  so  late  as 
at  the  trial.3  English  authorities  say  that  there  may  be  a  protest 
for  better  security;  but  this  practice  is,  we  believe,  unknown  in 
this  country,  and  nothing  seems  to  be  gained  by  it  there,  unless, 
as  is  said,  there  may  then  be  a  second  acceptance  for  honor, 
which  cannot  otherwise  be  made.^ 

The  loss  of  a  bill  is  not  a  sufficient  excuse  for  not  protesting 
it.^  But  a  subsequent  promise  to  pay  is  held  to  imply  protest 
and  notice.^ 

The  notarial  seal  is  evidence  of  the  dishonor  of  a  foreign  bill;'^, 
but  not,  it  would  seem,  of  an  inland  bill.^  And  no  collateral 
statement  in  the  certificate  is  evidence  of  the  fact  stated ;  thus, 
the  statement  by  a  notary  that  the  drawee  refused  to  accept  or 
pay  because  he  had  no  funds  of  the  drawer,  is  no  evidence  of  the 
absence  of  such  funds.^ 

The  general,  or,  indeed,  universal  duty  of  the  holder  of  nego- 
tiable paper  is,  to  give  notice  of  any  refusal  to  accept  or  pay  to 
all  antecedent  parties.  The  reason  of  this  is  obvious.  These 
previous  parties  have  engaged  that  the  party  who  should  accept 

1  It  cannot  be  done  by  an  agent.  Carmichael  v.  The  Bank  of  Pennsylvania,  4  How. 
(Miss.)  .567  ;  Sacrider  v.  Brown,  3  McLean,  481  ;  Chenowith  v.  Cliamberlin,  6  B.  Monr. 
60 ;  Bank  of  Kentucky  v.  Garey,  id.  626  ;   Carter  v.  Union  Bank,  7  Humph.  548. 

-  Byles  on  Bills,  200. 

'^  Gbostrey  v.  Mead,  Bull.  N.  P.  271  ;  Chaters  v.  Bell,  4  Esp.  48;  Orr  v.  Maginnis,  7 
East,  3.59. 

*  See  Byles  on  Bills,  202. 

6  Byles  on  Bills,  204. 

**  Thus,  in  Gibbon  v.  Coggon,  2  Campb.  188,  in  an  action  against  the  drawer  of  a 
foreign  bill  of  exchange,  it  was  held  that  a  promise  of  payment  by  the  defendant  after 
the  bill  was  due,  was  sufficient  evidence  of  a  protest  for  non-payment,  and  notice  of  the 
dishonor  of  the  bill.  And  Lord  Ellenhorough  said  :  "  By  the  drawer's  promise  to  pay, 
he  admits  ids  liability;  he  admits  the  existence  of  every  thing  which  is  necessary  to 
render  him  liable.  AVlien  called  upon  for  payment  of  the  bill,  he  ought  to  have  ob- 
jected tiiat  there  was  no  protest.  Instead  of  that,  he  promises  to  pay  it.  I  must,  there- 
fore, presume  that  lie  had  due  notice,  and  that  a  protest  was  regularly  drawn  up  by  a 
notarv"  And  see  Patterson  i'.  Becher,  6  Moore,  319  ;  Greenway  v.  Hindlev,  4  Campb. 
52  ;  Campbell  v.  Webster,  2  C.  B.  258. 

''  Anonvmous,  12  Mod.  345;  Bryden  r.  Taylor,  2  H.  &  Johns.  399  ;  Kicholls  v. 
Webb,  8  Wheat.  333  ;  Townsley  v.  Sumrall,  2  Pet.  179  ;  Bank  of  Kentucky  v.  Pursley, 
3  Monr.  238  ;  Chase  v.  Taylor,  4  H.  &  Johns.  54. 

^  See  ChesmeriJ.  Noves,  4  Campb.  129.    And  see  cases  supra. 

9  Dumont  v.  Pope,  7"Blackf.  367. 


112  ELEMENTS   OF   MERCANTILE   LAW.  [CE.  IX. 

or  pay  will  do  so ;  and  they  have  further  engaged  that,  if  he  re- 
fuses to  do  his  duty,  they  will  be  liable  in  his  stead  to  the  per- 
sons injured  by  his  refusal.  They  have  a  right  to  indemnity  or 
compensation  from  the  party  for  whom  they  are  liable,  and  to  such 
immediate  notice  of  his  failure  as  shall  secure  to  them  an  im- 
mediate opportunity  of  procuring  this  indemnity  or  compensation 
if  they  can.  Nor  is  the  question  what  notice  this  should  be,  left 
to  be  judged  of  by  the  circumstances  of  each  case;  for  the  law- 
merchant  has  certain  fixed  rules  applicable  to  all  negotiable  paper. 
Notice  must  be  given  even  to  one  who  has  knowledge.'  No 
particular  form  is  necessary;  it  may  be  in  writing  or  oral;^  all 
that  is  absolutely  essential  is,  that  it  should  designate  the  note 
or  bill  with  sufficient  distinctness,  and  state  that  it  has  been  dis- 
honored ;^  and  also  that  the  party  notified  is  looked  to  for  pay- 
ment;* but  it  has  been  held  that  the  notice  to  the  party,  when 
given  by  the  immediate  holder  of  the  bill,  sufficiently  implies  1 
that  he  is  looked  to.^  And  notice  of  protest  for  non-payment  is 
sufficient  notice  of  demand  and  refusal.*^  How  distinctly  the 
note  or  bill  should  be  described,  cannot  be  precisely  defined.  It! 
is  enough  if  there  be  no  such  looseness,  ambiguity,  or  misdescrip- 
tion as  might  mislead  a  man  of  ordinary  intelligence;  and  if  the] 
intention  was  to  describe  the  true  note,  and  the  party  notified] 


1  Caunt  V.  Thompson,  7  C.  B.  400;  Burgh  v.  Legge,  5  M.  &  W.  418. 

2  Phillips  V.  Gould,  8  C.  &  P.  355  ;  Glasgow  v.  Pratte,  8  Missouri,  336;  Cujier  v.\ 
Stevens,  4  Wend.  566. 

3  Hartley  v.  Case,  4  B.  &  Cr.  339.  In  this  case,  an  indorsee  sent  a  letter  to  the  j 
drawer,  merely  demanding  payment;  and  it  was  held  not  sufficient.  Abbott,  C.J.J 
said  :  "  There  is  no  precise  form  of  words  necessary  to  be  used  in  giving  notice  of  the] 
dishonor  of  a  bill  of  exchange,  but  the  language  used  must  be  such  as  to  convey  notice! 
to  the  party  what  the  bill  is,  and  that  payment  of  it  has  been  refused  by  the  acceptor. 
Here,  the  letter  in  question  did  not  convey  to  the  defendant  any  such  notice ;  it  does  j 
not  even  say  that  the  bill  was  ever  accepted."  And  see  Solarte  v.  Palmer,  7  Bing.  530,1 
2  Cl.,&  Pin.  93  ;  Everard  v.  Watson,  1  El.  &  Bl.  801 ;  Caunt  v.  Thompson,  7  C.  B.| 
400;'Hedger  v.  Steavenson,  2  M.  &  W.  799;  Lewis  v.  Gompertz,  6  id.  399;  Grugeonj 
V.  Smith,  6  Ad.  &  El.  499  ;  Boulton  v.  Welsh,  3  Bing.  N.  C.  688;  Houlditch  v.  Cauty.j 
4  id.  411;  Strange  v.  Price,  10  Ad.  &  El.  125 ;  Messenger  v.  Southey,  1  M.  &  Gr.  76  ;j 
Furze  v.  Sharwood,  2  Q.  B.  388;  Gilbert  v.  Dennis,  3  Met.  495 ;  Pinkham  v.  Macy,  ' 
id.  174. 

«  Per  Askhurst  and  Buller,  JJ.,  in  Tindal  v.  Brown,  1  T.  R.  167 ;  East  v.  Smith,  4| 
Dowl.  &  L.  744. 

^  Furse  v.  Sharwood,  2  Q.  B.  416.  In  this  case,  Lord  Denman  said:  "Where  notice! 
has  been  given  by  another  party  than  the  holder,  there  may  be  good  sense  in  requiringi 
that  it  shall  be  accompanied  by  a  direct  demand  of  payment,  or  a  statement  that  it  willi 
be  required  of  the  party  addressed;  but  in  no  case  has  the  absence  of  such  information! 
been  held  to  vitiate  a  notice  in  other  respects  complete,  and  which  has  come  directly| 
from  the  holder.''  And  see  King  v.  Bickley,  2  Q.  B.  419;  Miers  v.  Brown,  11  M.  " 
W.  372. 

6  Spies  V.  Newberry,  2  Doug.  (Mich.)  425 ;  Smith  v.  Little,  10  N.  H.  526. 


en.  IX.]  OF   NEGOTIABLE   PAPER.  113 

was  not  actually  misled,  perhaps  this  is  always  enough.  The 
notice  need  not  state  for  whom  payment  is  demanded,  nor  where 
the  note  is  lying;'  and  even  a  misstatement  in  this  respect  may 
not  be  material,  if  it  do  not  actually  mislead.^ 

No  copy  of  the  protest  need  be  sent;-^  but  information  of  the 
protest  should  be  given. 

If  the  letter  be  properly  put  into  the  post-office,  any  miscar- 
riage of  the  mail  does  not  affect  the  party  giving  notice.*  The 
address  should  be  sufficiently  specific.  Only  the  surname  —  as 
"  Mr.  A"  —  especially  if  sent  to  a  large  city,  might  not,  in  gen- 
eral, be  enough.^  The  postmarks  are  strong  evidence  that  the 
letter  was  mailed  at  the  very  time  these  marks  indicate ;  but 
this  evidence  may  be  rebutted.^  A  notice  not  only  may,  but 
should  be  sent  by  the  public  post.     It  may,  however,  be  sent  by 

'  Woodthorpe  v-  Lawcs,  2  M.  &  W.  109  ;  Housego  v.  Cowne,  id.  348  ;  Harrison  v. 
Euscoe,  15  id.  231. 

-  Rowlands  v.  Springett,  14  M.  &  W.  7. 

3  See  Blakely  v.  Grant,  6  Mass-  386 ;  Lenox  v.  Leverett,  10  Mass.  1  ;  Wallace  v. 
Agry,  4  Mason,  336  ;  Wells  v.  Whitehead,  15  Wend.  527. 

*  'Woodcock  V.  Houldsworth,  16  M.  &  W.  124.  In  this  case,  Pollock,  C.  B.,  before 
whom  the  cause  was  tried,  directed  the  jury  to  inquire  when  the  notice  was  received  by 
the  party  to  whom  it  was  sent.  And  this  was  held  incorrect.  Parke,  B.,  said :  "  The 
jury  should  have  been  asked  to  say  on  what  day  the  letter  was  posted,  not  on  what  day 
it  was  received.  Notices  of  dishonor  are  generally  put  into  the  post;  when  that  is 
done,  although,  by  some  mistake  or  delay  at  the  post-office,  the  letter  fails  to  reach  its 
destination  in  proper  time,  the  party  who  posted  it  ought  not  to  be  prejudiced  ;  he  has 
done  all  that  was  usual  and  necessary,  and  he  does  not  guarantee  the  certainty  or  cor- 
rectness of  the  post-office  delivery."  And  see,  to  the  same  effect,  Dobree  v.  Eastwood, 
3  C.  &  P.  250 ;  Stocken  <Collin,  7  M.  &  W.  515. 

^  Thus,  in  Walter  v.  Haynes,  Ry.  &  M.  149,  where  a  letter,  directed  "Mr.  Haynes, 
Bristol,"  containing  notice  of  the  dishonor  of  a  bill,  was  proved  to  have  been  put  into 
the  post-office,  it  was  held  that  this  was  not  sufficient  proof  of  notice  ;  the  direction 
being  too  general  to  raise  a  presumption  that  the  letter  reached  the  particular  individual 
intended.  And  Abbott,  C.  J.,  said  :  "  Where  a  letter,  fully  and  particularly  directed  to 
a  person  at  his  usual  place  of  residence,  is  proved  to  have  been  put  into  the  post-office, 
this  is  equivalent  to  proof  of  a  delivery  into  the  hands  of  that  person,  because  it  is  a 
safe  and  reasonable  presumption  that  it  reaches  its  destination  ;  but  where  a  letter  is 
addressed  generally  to  A  B,  at  a  large  town,  as  in  the  present  case,  it  is  not  to  be  ab- 
solutely presumed  from  the  fact  of  its  having  been  put  into  the  post-office,  that  it  was 
ever  received  by  the  party  for  whom  it  was  intended.  The  name  may  be  unknown  at 
the  post-office,  or  if  the  name  be  known,  there  may  be  several  persons  to  whom  so  gen- 
eral an  address  would  apply.  It  is,  therefore,  always  necessary,  in  the  latter  case,  to 
give  some  further  evidence  to  show  that  the  letter  did  in  fact  come  to  the  hands  of  the 
person  for  whom  it  was  intended."  But  where  a  party  drew  a  bill,  dating  it  generally 
"  London,"  it  was  held  that  proof  that  a  letter  containing  notice  of  the  dishonor  of  the 
bill,  was  put  into  the  post-office,  addressed  to  the  drawer  at  "London,"  was  evidence  to 
go  to  the  jury  that  he  had  due  notice  of  dishonor.  And  Lord  Abinger  said  :  "  I  have 
known  such  evidence  admitted  a  hundred  times.  If  the  party  chooses  to  draw  a  bill, 
and  date  it  so  generally,  it  implies  that  a  letter  sent  to  the  post-office,  and  so  directed, 
will  find  him."  And  see,  to  the  same  eii'ect,  Mann  v.  Moors,  Ry.  &  M.  249  ;  Burmester 
V.  Barron,  17  Q.  B.  828. 

^  Stocken  v.  Collin,  7  M.  &  W.  515;  Woodcock  j;.  Houldsworth,  16  id.  124;  Craw- 
ford V.  The  Branch  Bank  at  Mobile,  7  Ala.  205. 

10* 


114  ELEMENTS    OF   MERCANTILE   LAW.  [CII.  IX. 

a  private  messenger;  but  is  not  sufficient  if  it  do  not  arrive  until 
after  the  time  at  which  it  would  have  arrived  by  mail.'  It  may 
be  sent  to  the  town  where  the  party  resides,  or  to  another  town, 
or  a  more  distant  post-office,  if  it  is  clear  that  he  may  thereby 
receive  the  notice  earlier.^  And  if  the  notice  .is  sent  to  what  the 
sender  deems,  after  due  diligence,  the  nearest  post-office,  this  is 
enough.^  If  the  parties  live  in  the  same  town,  notice,  should 
not  be  sent  by  mail.'^ 

The  notice  should  be  sent  either  to  the  place  of  business,  or  to 
the  residence  of  the  party  notified.^  But  if  one  directs  a  notice 
to  be  sent  to  him  elsewhere  than  at  home,  it  seems  that  it  may 
be  so  sent,  and  bind  not  only  him  but  prior  parties,  although 
time  is  lost  by  so  sending  it.^ 

The  notice  should  be  sent  within  reasonable  time ;  and  in 
respect  to  negotiable  paper,  the  law-merchant  defines  this  within 
very  narrow  limits.  K  the  parties  live  in  the  same  town,  notice 
must  be  given  so  that,  the  party  to  whom  it  is  sent  may  receive 
the  notice  in  the  course  of  the  day  next  after  that  in  which  the 
party  sending  has  knowledge  of  the  fact."     If  the  parties  live  in 

1  Darbishire  v.  Parker,  G  East,  3.  If,  however,  it  arrive  on  the  same  day  and  within 
business  hours,  it  will  be  sufficient.     Bancroft  v.  Hall,  Holt,  N.  P.  476. 

-  United  States  Bank  v.  Lane,  3  Hawks,  453  ;  Farmers'  and  Merchants'  Bank  v. 
Battle,  4  Humph.  86;  Sherman  v.  Clark,  3  McLean.  91  ;  Mercer  v.  Lancaster,  .5  Penn. 
St.  160 ;  Walker  v.  Bank  of  Augusta,  3  Geo.  486  ;  Hunt  v.  Fish,  4  Barb.  324. 

3  Marsh  v.  Barr,  Meigs,  68. 

*  Ireland  v.  Kip,  10  Jolins.  490,  11  id.  231 ;  Ransom  v.  Mack,  2  Hill,  587;  Kramer 
V.  M'Dowell,  8  W.  &  S.  138;  Peirce  v.  Pendar,  5  Met.  352.  In  this  last  case,  Shaiv, 
C.  J.,  said  :  "  The  general  rule  certainly  is,  that  when  the  indorser  resides  in  the  same 
place  with  the  party  who  is  to  give  the  notice,  the  notice  must  be  given  to  the  party 
personally,  or  at  his  domicile  or  place  of  business.  Perhaps  a  different  rule  may  pre- 
vail in  London,  where  a  penny  post  is  established  and  regulated  by  law,  by  whom  let- 
ters are  to  be  delivered  to  the  party  addressed,  or  at  his  place  of  domicile  or  business, 
on  tiie  same  day  they  are  deposited.  And,  perhaps,  the  saflie  rule  might  not  apply 
where  the  party  to  whom  notice  is  to  be  given,  lives  in  the  same  town,  if  it  be  at  a  dis- 
tant village  or  settlement  where  a  town  is  large,  and  there  are  several  post-offices  in 
different  parts  of  it.  But  of  this  we  give  no  opinion.  In  the  present  case,  the  defend- 
ant had  his  residence  and  place  of  business  in  the  city  of  Bangor,  and  the  only  notice 
given  him  was  by  a  letter,  addressed  to  him  at  Bangor,  and  deposited  in  the  post-office 
at  that  place.  And  we  arc  of  opinion  that  this  was  insufficient  to  charge  him  as  in- 
dorser." 

*  Bank  of  Columbia  v.  Lawrence,  1  Pet.  578.   And  see  cases  cited  in  preceding  note. 
6  Shelton  v.  Braithwaite,  8  M.  &  W.  252. 

^  Smith  V.  Mullett,  2  Campb.  208.  In  this  case,  Lord  Ellenborough  said :  "  Where 
the  parties  reside  in  London,  each  party  should  have  a  day  to  give  notice.  The  holder 
of  a  bill  is  not,  omissis  omnibus  aliis  7iegotiis,  to  devote  himself  to  giving  notice  of  its  dis- 
honor. If  you  limit  a  man  to  a  fractional  part  of  a  day,  it  will  come  to  a  question  how 
swiftly  the  notice  can  be  conveyed, —  a  man  and  horse  must  be  employed,  and  you  will 
have  a  race  against  time."  And  see  Scott  v.  Lifford,  9  East,  347  ;  Hilton  y.  Fairclough, 
2  Campb.  633  ;  Haynes  v.  Birks,  3  B.  &  P.  599  ;  Fowler  v.  Hendon,  4  Tyr.  1002;  Grand 
Bank  v.  Blanchard,  23  Pick.  305. 


CH.  IX.]  OF   NEGOTIABLE   PAPER.  115 

different  places,  the  notice  must  be  sent  as  soon  as  by  the  first 
practicable  mail  of  the  next  day.'  Each  party  receiving  notice 
has  a  day,  or  until  the  next  post  after  the  day  in  which  he  re- 
ceives it,  before  he  is  obliged  to  send  the  notice  forward.  Thus, 
a  banker  with  whom  the  paper  is  deposited  for  collection,  is  con- 
sidered a  holder,  and  entitled  to  a  day  to  give  notice  to  the  de- 
positor, who  then  has  a  day  for  his  notice  to  antecedent  parties.^ 
The  different  branches  of  one  establishment  have  been  held  dis- 
tinct holders  for  this  purpose.^ 

Jf  notice  be  sent  by  ship,  it  is  said  that  it  may.  be  delayed  until 
the  next  regular  ship;^  but  this  is  not  quite  certain ;  or,  rather, 
the  rule  can  hardly  as  yet  be  considered  fixed  and  definite.  It 
should  be  sent  by  the  first  proper  opportunity. 

Neither  Sunday  nor  any  legal  holiday  is  to  be  computed  in 
reckoning  the  time  within  which  notice  must  be  given.^ 

There  is  no  presumption  of  notice;  and  the  plaintiff  must 
prove  that  it  was  given  and  was  sufficient.  Thus,  proving  that 
it  was  given  in  "  two  or  three  days,"  is  insuflicient,  if  two  would 
have  been  right,  but  three  not.*^ 

1  Williams  v.  Smith,  2  B.  &  Aid.  496.  In  this  case,  Abbott,  C.  J.,  said  :  "  It  is  of  the 
greatest  importance  to  commerce  that  some  plain  and  precise  rule  should  be  laid  down 
to  guide  persons  in  all  cases  as  to  the  time  within  which  notices  of  the  dishonor  of  bills 
must  be  given.  That  time  I  have  always  understood  to  be  the  departure  of  the  post 
on  the  day  following  that  in  which  the  party  receives  the  intelligence  of  the  dishonor. 
If,  instead  of  that  rule,  we  were  to  say  that  the  party  must  give  notice  by  the  next  prac- 
ticable post,  \vc  should  raise  in  many  cases  difficult  questions  of  fact,  and  should,  ac- 
cording to  the  peculiar  local  situations  of  parties,  give  them  more  or  less  facility  in 
complying  with  the  rule.  But  no  dispute  can  arise  from  adopting  the  rule  which  I 
have  stated."  And  see  Wright  v.  Shawcross,  2  B.  &  Aid.  501,  n.  (a).  And  if  no  post 
goes  out  the  next  day,  the  party  may  wait  until  the  next  post  day.  Geill  v.  Jeremy, 
M.  &  Malk.  61.  And  if  the  first  post  of  the  next  day  goes  out  at  an  early  hour  in  the 
morning,  the  party  may  wait  until  the  next  post.  Thus,  where  a  bill  was  dishonored 
on  Saturday  in  a  place  where  the  post  went  out  at  half  after  nine  in  the  morning,  it 
was  held  that  it  was  sufficient  notice  of  dishonor  to  send  a  letter  by  the  following  Tues- 
day morning's  post.  Ilawkcs  r.  Salter,  4  Bing.  715.  And  see  Howard  v.  Ives,  1  Hill, 
263.  In  this  case,  Cowen,  J.,  makes  a  question,  whether,  if  there  are  several  mails 
leaving  on  the  same  day,  at  different  hours,  the  party  may  in  all  cases  elect  by  which 
he  will  send.     Sec  AVhitwell  v.  Johnson,  17  Mass.  449,  454. 

2  Bray  v.  Hadwcn,  5  M.  &  S.  68 ;  Firth  v.  Thrush,  8  B.  &  Cr.  387 ;  Howard  v.  Ives, 

1  Hill,  263. 

3  Thus,  in  Clode  v.  Bay  ley,  12  M.  &  W.  51,  where  a  bill  of  exchange  was  indorsed 
to  a  branch  of  the  National  Provincial  Bank  of  England,  at  Postmadoc,  who  sent  it  to 
the  Pwylheli  branch  of  the  same  bank,  who  indorsed  it  to  the  head  establishment  in 
London ;  it  was  held  that  each  of  the  branch  banks  were  to  be  considered  as  inde- 
pendent indorsers,  and  each  entitled  to  the  usual  notice  of  dishonor.  * 

*  Muilman  v.  D'Eguino,  2  11.  Bl.  565.    And  see  Fleming  v.  M'CIure,  1  Brev.  428. 

5  Eagle  Bank  v.  Chapin,  3  Pick.  180;  Agnew  v.  Bank  of  Gettysburg,  2  H.  &  Gill, 
478;  Hawkes  v.  Salter,  4  Bing.  715;  Wright  v.  Shawcross,  2  B.  &  Aid.  501,  n.  (a); 
Bray  r.  Hadwen,  5  M.  &  S.  68  ;  Cuyler  v.  Stevens,  4  Wend.  566 ;  Lindo  v.  Unsworth, 

2  Campb.  602. 

^  Lawson  v.  Sherwood,  1  Stark.  314» 


116  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  IX. 

Notice  should  be  given  only  by  a  party  to  the  instrument, 
who  is  liable  upon  it,  and  not  by  a  stranger;'  and  it  has  been 
held  that  notice  could  not  be  given  by  a  first  indorser  who,  not 
having  been  notified,  was  not  himself  liable.^  A  notice  by  any 
party  liable,  will  enure  to  the  benefit  of  all  antecedent  or  subse- 
quent parties.  The  notice  may  be  given  by  any  authorized  agent 
of  a  party  who  could  himself  give  notice.-'' 

Notice  must  be  given  to  every  antecedent  party  who  is  to  be 
held.  And  we  have  seen  that  this  may  be  given  by  a  holder  to 
the  first  party  liable,  and  by  him  to  the  next,  &c.  But  the  holder 
may  always  give  notice  to  all  antecedent  parties ;  and  it  is  al- 
ways prudent,  and  in  this  country,  we  believe,  quite  usual,  to  do 
so.^ 

Notice  may  be  given  personally  to  a  party,  or  to  his  agent 
authorized  to  receive  notice,  or  left  in  writing  at  his  home  or 
place  of  business.^  If  the  party  to  be  notified  is  dead,  notice 
should  be  given  to  his  personal  representatives.^  A  notice 
addressed  to  "  the  legal  representative,"  and  sent  to  the  town  in 
which  the  deceased  party  resided  at  his  death,  has  been  held  suffi- 
cient.'' But  a  notice  addressed  to  the  party  himself,  when  known 
to  be  dead,  or  to  "  the  estate  of,  &c.,"  would  not  be  sufficient, 
but  might  become  so  with  evidence  that  the  administrator  or 
executor  actually  received  the  notice.^ 

1  It  was  formerly  held  that  the  notice  must  be  given  by  the  actual  holder  of  the  bill. 
See  Tindal  v.  Brown,  1  T.  R.  167,  2  id.  186;  Ex  parte  Barclay,  7  Ves.  597.  But  it 
was  decided  in  Chapman  v.  Keane,  3  Ad.  &  El.  193,  that  a  notice  given  by  any  party 
to  the  bill  was  sufficient;  and,  therefore,  that  an  indorsee,  who  has  indorsed  over,  and 
is  not  the  holder  at  the  time  of  the  maturity  and  dishonor,  may  give  notice  at  such 
time  to  an  earlier  party,  and,  upon  afterwards  taking  up  the  bill  and  suing  such  party, 
may  avail  himself  of  such  notice.  And  see  Harrison  v.  Ruscoe,  15  M.  &  W.  231 ; 
Stewart  V.  Kennett,  2  Campb.  177 ;  Lysaght  v.  Bryant,  19  L.  J.,  C.  P.,  160;  Chanoine 
V.  Fowler,  3  Wend.  173. 

2  See  cases  in  preceding  note. 

»  Woodthorpe  v.  Lawcs,  2  M.  &  W.  109. 

*  In  such  case  the  notice  must  be  given  to  all  the  parties  the  day  after  the  dishonor. 
Thus,  if  there  be  a  drawer,  acceptor,  payee,  and  first  indorsee  of  a  bill  of  exchange,  all 
residing  in  the  same  place,  and  the  bill  be  dishonored  on  Monday,  and  the  indorsee 
notify  the  payee  on  Tuesday,  and  the  payee  notify  the  drawer  on  Wednesday,  this  will 
be  good.  But  if  the  indorsee  wish  to  notify  both  the  payee  and  the  drawer,  he  must 
notify  them  both  on  Tuesday.  See  Rowe  v.  Tipper,  13  C.  B.  249 ;  Dobree  v-  East- 
wood, 3  C.  &  P.  250;  Chapcott  v.  Curlewis,  2  M.  &  Rob.  284;  Smith  v.  Mullett,  2 
Campb.  208 ;  Marsh  v.  Maxwell,  2  Campb.  210,  n. 

»  Crosse  v.  Smith,  1  M.  &  S.  545 ;  Housego  v.  Cowne,  2  M.  &  W.  348. 

6  Merchants'  Bank  v.  Birch,  17  Johns.  25;  Oriental  Bank  v.  Blake,  22  Pick.  206; 
Planters'  Bank  v.  White,  2  Humph.  112;  Cayuga  Bank  v.  Bennett,  5  Hill,  236;  Barns 
V.  Reynolds,  4  How.  (Miss.)  114. 

■^  Pillow  V.  Hardeman,  3  Ilumph.  538. 

*  Cayuga  Bank  v.  Bennett,  5  Hill,  236. 


en.  IX.]  OP   NEGOTIABLE   PAPER.  117 

If  two  or  more  parties  are  jointly  liable  on  a  bill  as  partners, 
notice  to  one  is  enough.^ 

One  transferring  by  delivery  a  note  or  bill  payable  to  bearer 
is  not  entitled  to  notice  of  non-payment,  unless  the  circumstances 
of  the  case  are  such  as  to  make  him  liable ;  and  then  he  is  en- 
titled to  such  reasonable  notice  only  as  is  due  to  a  guarantor.'-^ 
As  if,  for  instance,  the  paper  was  transferred  as  security,  or  even 
in  payment  of  a  preexisting  debt.  For  this  revives  if  the  bill  or 
note  be  dishonored,  and  there  must  be  notice  given  of  the  dis- 
honor. In  general,  a  guarantor  of  a  bill  or  note,  or  debt,  is  en- 
titled only  to  such  notice  as  shall  save  him  from  actual  injury  ; 
and  cannot  interpose  the  want  of  notice  as  a  defence,  unless  he 
can  show  that  the  notice  was  unreasonably  withheld  or  delayed, 
and  that  he  has  actually  sustained  injury  from  such  delay  or 
want  of  notice.3  And  if  an  indorser  give  also  a  bond  to  pay  the 
debt,  he  is  not  discharged  from  his  bond  by  want  of  notice.* 

In  general,  all  parties  to  negotiable  papers,  who  are  entitled  to 
notice,  are  discharged  by  want  of  notice.  The  law  presumes 
them  to  be  injured,  and  does  not  put  them  to  proof.^  It  has 
been  held,  however,  that  the  drawer  of  a  check  not  notified  of 
non-payment,  is  thereby  discharged  only  to  the  extent  of  the 
loss  which  he  actually  sustains.^ 

1  Porthouse  v.  Parker,  1  Campb.  83 ;  Sayre  v.  Frick,  7  TV.  &  S.  383 ;  Willis  v. 
Green,  5  Hill,  232;  Dabney  v.  Stidger,  4  Sm.  &  Marsh.  749  ;  Coeke  v.  Bank  of  Ten- 
nessee, 6  Humph.  51. 

'^  "  If  a  person  deliver  a  bill  to  another  without  indorsing  his  own  name  upon  it,  he 
does  not  subject  himself  to  the  obligations  of  the  law-merchant ;  he  cannot  be  sued  on 
the  bill  either  by  the  person  to  whom  he  delivers  it,  or  by  any  other.  And,  as  he  does 
not  subject  himself  to  the  obligations,  we  think  he  is  not  entitled  to  the  advantages. 
If  the  holder  of  a  bill  sell  it  without  his  own  indorsement,  he  is,  generally  speaking, 
liable  to  no  action  in  respect  of  the  bill.  If  he  deliver  it  without  his  indorsement  upon 
any  other  consideration,  antecedent  or  concomitant,  the  nature  of  the  transaction,  and 
all  circumstances  regarding  the  bill,  must  be  inquired  into,  in  order  to  ascertain  whether 
he  is  subject  to  any  responsibility.  If  the  bill  be  delivered  and  received  as  an  absolute 
discharge,  he  will  not  be  liable  ;  if  otherwise,  he  may  be."  Per  Lord  Tenterden,  in  Van 
Wart  I'.  Woolley,  3  B.  &  Cr.  439.  And  see  Van  Wart  v.  Smith,  1  Wend.  219  ;  Swin- 
yard  v.  Bowes,  5  M.  &  S.  62. 

3  See  Warrington  v.  Furbor,  8  East,  242 ;  Philips  v.  Astling,  2  Taunt.  206  ;  Swin- 
yard  v.  Bowes,  5  M.  &  S.  62  ;  Holbrow  v.  Wilkins,  1  B.  &  Cr.  10 ;  Van  Wart  v.  W'ool- 
ley,  3  B.  &  Cr.  439 ;  Walton  v.  Mascall,  13  M.  &  W.  72 ;  Hitchcock  v.  Humpfrey,  5 
M.  &  Gr.  559.     And  aH<e,  p.  70,  n.  1. 

*  Murray  v.  King,  5  B.  &  Aid.  165. 

5  Bridges  v.  Berry,  3  Taunt.  130.  In  this  case  the  defendant  being  unable  to  pay  a 
bill  when  due,  which  he  had  accepted,  obtained  time,  and  indorsed  to  the  plaintiff",  as  a 
security,  a  bill  drawn  by  himself  to  his  own  order,  which,  when  due,  was  dishonored  by 
tfce  drawee,  but  the  holder  omitted  to  give  the  defendant  notice:  /A/*/,  that  by  tiiis 
laches  the  defendant  was  not  only  discharged  as  indorser  of  the  one  bill,  but  also  as 
acceptor  of  the  other. 

8  Pack  V.  Thomas,  13  Sm.  &  M.  11.    And  see  ante,  p.  109,  n  1. 


118  ELEMENTS    OF   MERCANTILE   LAW.  [cil.  IX. 

If  one  who  is  discharged  by  want  of  notice,  nevertheless  pays 
the  bill  or  note,  he  may  call  upon  the  antecedent  parties,  if  due 
notice  has  been  given  to  them,  and  if,  by  taking  up  the  paper,  he 
acquires  the  rights  of  the  holder;  or  if  he,  having  been  indorsee, 
indorsed  the  paper  over;  for  he  is  then  remitted  to  his  rights  and 
position  as  indorsee. 

The  right  to  notice  may  be  waived  by  any  agreement  to  that 
efTect  prior  to  the  maturity  of  the  paper.'  It  is  quite  common 
for  an  indorser  to  write,  "  I  waive  notice,"  or,  "  I  waive  demand," 
or  some  words  to  this  effect.  It  should,  however,  be  remembered 
that  these  rights  are  independent.  A  waiver  of  demand  may 
imply  a  waiver  of  notice  of  non-paynient ;  but  a  waiver  of  notice 
of  non-payment  certainly  does  not  imply  a  waiver  of  demand.^ 
So,  if  a  drawer  countermands  his  order,  the  bill  should  still  be 
presented,  but  notice  of  dishonor  need  not  be  given  to  the 
drawer.^  Or,  if  a  drawer  has  no  funds,  and  nothing  equivalent 
to  funds,  in  the  drawee's  hands,  and  would  have  no  remedy 
against  him  or  any  one  else,  as  he  cannot  be  prejudiced  by  want 
of  notice,  it  is  not  necessary  to  give  him  notice.*  But  the  in- 
dorser must  still  be  notified;^  and  a  drawer  for  the  accommoda- 
tion of  the  acceptor,  is  entitled  to  notice,  because  he  might  have 
a  claim  upon  the  acceptor.^ 

If  a  drawer  make  a  bill  payabla  at  his  own  house,  or  counting- 
room,  this  has  been  said  to  be  evidence  to  a  jury  that  the  bill  was 

1  Thus,  in  Phipson  v.  Kneller,  4  Campb.  285,  the  drawer  of  a  bill  of  exchano;c,  a  few- 
days  before  it  became  due,  stated  to  the  holder  that  he  had  no  regular  residence,  and 
that  he  would  call  and  see  if  the  bill  was  paid  by  the  acceptor.  Held,  that  under  these 
circumstances  he  was  not  entitled  to  notice  of  its  dishonor.  And  see  Burgh  v.  Legge, 
5  M.  &  W.  418. 

2  Drinkwater  v.  Tebbetts,  17  Maine,  16;  Lane  v.  Steward,  20  Maine,  98;  Berkshire 
Bank  f.  Jones,  6  Mass.  524;  Backus  v.  Shipherd,  11  Wend.  629;  Buchanan  v.  Mar- 
shall, 22  Vt.  561. 

3  Hill  V.  Heap,  D.  &  E.  N.  P.  57  ;  Prideaux  i'.  Collier,  2  Stark.  57. 

*  Bickerdike  r.  Bollman,  1  T.  11.405;  Cory  v.  Scott,  3  B.  &  Aid.  619;  Carter  v. 
Plower,  16  M.  &  W.  743. 

^  Wilkes  V.  Jacks,  Peake,  202.  This  was  an  action  against  the  indorser  of  a  bill  of 
exchange.  It  appeared  that  notice  had  not  been  given  to  the  defendant,  whereupon  the 
plaintiff  offered  to  show  that  the  drawer  had  no  effects  in  the  hands  of  the  drawee.  But 
Liord  Kenyon  said:  "  That  circumstance  will  not  avail  the  plaintiff;  the  rule  extends 
only  to  actions  brought  against  the  drawer;  the  indorser  is  in  all  cases  entitled  to 
notice,  for  he  has  no  concern  with  the  accounts  between  the  drawer  and  the  drawee." 

6  Ex  parte  Heath,  2  Ves.  &  Beam-  240;  Sleigh  v.  Sleigh,  5  Exch.  514.  And  where 
a  bill  was  drawn  for  the  accommodation  of  an  indorsee,  and  neither  such  indorsee  nor 
the  drawer  had  any  effects  in  the  hands  of  the  acceptor,  it  was  held  that  a  subsequent 
indorsee,  in  order  to  recover  against  the  drawer,  was  bound  to  give  him  notice,  for  the 
drawer  had  a  i-cmedy  over  against  his  immediate  indorsee.  Norton  v.  Pickering,  8  B. 
&  Cr.  610;    Cory  v.  Scott,  3  B.  &  Aid.  619. 


CII.  IX.]  OF   NEGOTIABLE   PAPER.  119 

drawn  for  his  accommodation,  and  that  he  expects  to  provide  for 
the  payment,  and  is  not  entitled  to  notice  of  dishonor.^ 

Actual  ignorance  of  a  party's  residence  justifies  the  delay 
necessary  to  find  it  out,  and  no  more;-  and  after  it  is  discovered, 
the  notifier  has  the  usual  time.^ 

Death,  or  severe  illness  of  the  notifier  or  his  agent,  is  an  excuse 
for  delay  ;  but  the  death,  bankruptcy,  or  insolvency  of  the  drawee 
is  no  excuse.* 

As  the  right  to  notice  may  be  waived  before  maturity,  so  the 
want  of  notice  may  be  cured  afterwards  by  an  express  promise 
to  pay;  and  an  acknowledgment  of  liability,  or  a  payment  in 
part,  is  evidence,  but  not  conclusive  evidence,  of  notice;^  nor 
are  the  jury  bound  to  draw  this  conclusion,  even  if  the  evidence 
be  not  rebutted.^  If  the  promise  be  conditional,  and  the  condi- 
tion be  not  complied  with,  the  promise  has  been  held  to  be  still 
evidence."  Nor  is  it  sufficient  to  avoid  such  promise,  that  it  was 
made  in  ignorance  of  the  law ;  it  must  be  made,  however,  with 
a  full  knowledge  of  the  facts.  The  following  distinction  seems 
to  be  drawn ;  if  the  fact  of  neglect  to  notice  appears,  the  party 
entitled  to  notice  is  not  bound  by  his  subsequent  promise,  unless 
it  was  made  with  a  knowledge  of  the  neglect;  but  if  the  fact  of 

1  Sharp  V.  Bailey,  9  B.  &  Cr.  44. 

2  Bateman  v.  Joseph,  2  Campb.  461,  12  East,  433.  In  this  case,  Lord  Ellenhorough 
said :  "  When  the  holder  of  a  bill  of  exchange  does  not  know  where  the  indorscr  is  to 
be  found,  it  would  bo  very  hard  if  he  lost  his  remedy  by  not  communicating  immediate 
notice  of  the  dishonor  of  the  bill ;  and  I  think  the  law  lays  down  no  such  rigid  rule. 
The  holder  must  not  allow  himself  to  remain  in  a  state  of  passive  and  contented  igno- 
rance ;  but  if  he  uses  reasonable  diligence  to  discover  the  residence  of  the  indorser,  I 
conceive  that  notice  given  as  soon  as  this  is  discovered,  is  due  notice  of  the  dishonor  of 
the  bill,  within  the  usage  and  custom  of  merchants."  But,  in  Beveridge  v.  Burgis,  3 
Campb.  262,  where  the  holder,  being  ignorant  of  the  indorser's  residence,  made  inquiries 
at  a  certain  house  where  the  bill  was  made  payable,  Lord  Ellenhorough  said  :  "Ignorance 
of  the  indorser's  residence  may  excuse  the  want  of  due  notice ;  but  the  party  must 
show  that  he  has  used  reasonable  diligence  to  find  it  out.  Has  he  done  so  here  '?  How 
should  it  be  expected  that  the  requisite  information  should  be  obtained  where  the  bill 
was  payable  ?  Inquiries  might  have  been  made  of  the  other  persons  whose  names  ap- 
peared upon  the  bill,  and  application  might  have  been  made  to  persons  of  the  same 
name  with  the  defendant,  whose  addresses  are  set  down  in  the  directory."  And  see 
Porter  v.  Judson,  1  Gray,  175. 

3  Firth  1-.  Thrush,  8  B.  &  Cr.  387. 

*  Lawrence  v.  Langlcy,  14  N.  H.  70;  Esdaile  v.  Sowcrby,  11  East,  114;  Boultbee  v. 
Stubbs,  18  Ves.  20;  Barton  v.  Baker,  1  Scrg.  &  R.  334;  Gibbs  v.  Cannon,  9  Serg.  & 
E.  198. 

^  Vaughan  v.  Fuller,  2  Strange,  1246 ;  Horford  v.  Wilson,  1  Taunt.  12  ;  Lundie  v. 
Robertson,  7  East,  231  ;  Brett  v.  Levett,  13  East,  213;  Wood  v.  Brown,  I  Stark.  217  ; 
Rogers  v.  Stephens,  2  T.  R.  713  ;  Hicks  v.  The  Duke  of  Beaufort,  4  Bing.  N.  C.  229  ; 
Booth  V.  Jacobs,  3  Nov.  &  M.  351  ;  Brownell  v.  Bonney,  1  Q.  B.  39. 

«  See  Byles  on  Bills,  238  ;  Bell  v.  Frankis,  4  M.  &  Gr.  446. 

7  Campbell  v.  Webster,  2  C.  B.  258. 


120  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

neglect  does  not  appear,  the  subsequent  promise  will  be  taken 
as  evidence  that  there  was  no  neglect,  but  sufficient  notice.^ 
And  a  promise  to  pay,  made  in  expectation  of  the  dishonor  of  a 
bill  or  note,  will  be  construed  as  a  promise  on  condition  of  usual 
demand  and  notice,  and,  of  course,  does  not  waive  them.^  And, 
as  we  have  remarked,  no  waiver  of  laches  can  affect  any  party 
but  him  who  makes  the  waiver.  • 


SECTION  VI. 

OF   THE   EIGHTS    AND   DUTIES   OF   AN   INDORSEE. 

Only  a  note  or  bill  payable  to  a  payee  or  order  is,  strictly 
speaking,  subject  to  indorsement.  Those  who  write  their  names 
on  the  back  of  any  note  or  bill,  are  indorsers  in  one  sense,  and 
are  sometimes  called  so. 

The  payee  of  a  negotiable  bill  or  note  —  whether  he  be  also 
maker  or  not  —  may  indorse  it,  and  afterwards  any  person,  or 
any  number  of  persons,  may  indorse  it.  The  maker  promises  to 
pay  to  the  payee  or  his  order ;  and  the  indorsement  is  an  order 
to  pay  the  indorsee,  and  the  maker's  promise  is  then  to  him.  But 
if  the  original  promise  was  to  the  payee  or  order,  this  "  or  order," 
which  is  the  negotiable  element,  passes  over  to  the  indorsee,  and 
he  may  indorse,  and  so  may  his  indorsee,  indefinitely.^ 

Each  indorser,  by  his  indorsement,  does  two  things;  first,  he 
orders  the  antecedent  parties  to  pay  to  his  indorsee ;  and  next, 
he  engages  with  his  indorsee  that  if  they  do  not  pay,  he  will. 

What  effect  an  indorsement  of  a  negotiable  note  or  bill  by  one 
not  payee,  before  the  indorsement  by  payee,  should  have,  is  not 
quite  certain.  Upon  the  whole,  however,  we  should  hold,  with 
some  reason  and  authority,  that,  where  such  a  name  appears,  as 
it  may  be  made  to  have  the  place  of  a  second  indorser  whenever 
the  payee  chooses  to  write  his  name  over  it,  it  shall  be  held  to 
be  so  intended,  in  the  absence  of  evidence  ;4  and  then,  of  course, 

1  Tebbetts  v.  Dowd,  23  Wend.  379. 

2  Pickin  V.  Graham,  1  Cr.  &  M.  725. 

^  More  V.  Manning,  1  Com.  311  ;  Acheson  v.  Fountain,  1  Strange,  557 ;  Edic  ;;.  The 
East  India  Co.  2  Burr.  1216  ;  Gay  v.  Lander,  6  C  B.  336. 

^  Tliis  is  the  well-settled  law  in  New  York.  See  Dean  v.  Hall,  17  Wend.  214; 
Seabury  v.  liungerford,  2  11^11,  80;   Hall  v.  Newcomb,  3  Hill,  233,  7  id.  416  ;  Spies  v. 


en.  IX.]  OP   NEGOTIABLE   P^ER.  121 

it  gives  the  payee  no  claim  against  such  a  party,  because  a  first 
indorser  can  have  none  against  a  second,  but  the  second  may 
have  a  claim  against  the  first.  But  evidence  is  receivable  to 
prove  that  the  party  put  his  name  on  the  note  for  the  purpose  of 
adding  to  its  security  by  becoming  responsible  for  it  to  the  payee. 
And  then,  if  he  indorsed  the  note  before  it  was  received  by  the 
payee,  the  consideration  of  the  note  attaches  to  him,  and  he  may 
be  held  either  as  surety  for  consideration,  or  as  a  maker.^  If  he 
wrote  his  name  on  the  note  after  it  was  made,  and,  at  the  request 
of  the  payee  or  other  holder,  he  is  bound  only  as  guarantor  or 
surety,  and  the  consideration  of  the  note  being  exhausted,  he  is 
bound  only  by  showing  some  new  and  independent  considera- 
tion.2  No  one  who  thus  indorses  a  note  not  negotiable,  can  be 
treated  or  considered  precisely  as  a  second  indorser,  whatever  be 
the  names  on  the  paper  before  his  own  ;  but  any  indorser  of  such 
a  note  or  bill  may  be  held  to  be  a  new  maker  or  drawer,  or  a 
guarantor  or  surety,  as  the  circumstances  of  the  case  indicate  or 


Gilmorc,  1  Barb.  158,  1  Comst.  321.  But  in  Massachusetts,  and  some  other  States, 
sucli  an  indorser,  in  the  absence  of  all  evidence,  is  held  as  a  co-maker.  Union  Bank 
V.  Willis,  8  Met.  504;  Martin  v.  Boyd,  11  N.  H.  385;  Flint  v.  Day,  9  Vt.  345  ;  Nash 
I".  Skinner,  12  id.  219.  In  Union  Bank  v.  Willis,  supra,  A  made  a  note  payable  to  B 
or  order ;  C  put  his  name  in  blank  on  the  back  of  the  note,  and  B  put  his  name  in 
blank  under  C's  name ;  A  presented  the  note  in  this  condition  to  the  plaintiffs,  M'ho 
discounted  it  for  him.  On  failure  of  A  to  pay  the  note,  the  plaintiffs  gave  notice  to  B 
and  C  of  the  non-payment,  but  did  not  present  the  note  to  C  for  payment.  Held,  in  a 
suit  by  tlie  plaintiffs  against  B,  as  indorser,  that  it  was  to  be  presumed  that  C  put  his 
name  on  the  note  at  the  time  when  A  signed  it ;  tliat  he  was,  tlierefore,  an  original 
promisor;  and  that  B  was  discharged  by  the  omission  of  the  plaintiffs  to  present  the 
note  to  C  for  payment.  IJubbard,  J.,  in  delivering  the  opinion  of  the  court,  said  :  "If 
the  subject  now  brought  before  us  were  a  new  one,  we  should  hesitate  in  giving  counte- 
nance to  such  an  irregularity,  as  to  hold  that  any  person  wliose  name  is  written  on  the 
back  of  a  note  should  be  chargeable  as  a  promisor.  We  should  say  that  a  name  written 
on  the  paper,  which  name  was  not  that  of  the  payee,  nor  following  his  name  on  his 
liaving  indorsed  it,  was  either  of  no  validity  to  bind  such  individual,  because  the  con- 
tract intended  to  be  entered  into,  if  any,  was  incomplete  or  within  the  Statute  of  Frauds ; 
or  that  he  should  be  treated  by  third  parties  simply  as  a  second  indorser;  leaving  the 
payee  and  himsalf  to  settle  their  respective  liabilities,  according  to  tlieir  own  agree- 
ment. But  the  validity  of  such  contracts  has  been  so  long  established,  and  the  course 
of  decisions,  on  tlie  whole,  so  uniform,  that  we  have  now  only  to  apply  the  law,  as  it 
lias  been  previously  settled,  in  order  to  decide  the  present  suit."  The  learned  judge 
then  proceeds  to  a  minute  examination  of  the  cases  previously  decided  on  the  point  in 
Massacliusctts,  and  arrives  at  the  conclusion  stated  above. 

1  Nelson  v.  Dubois,  13  Johns.  175;  Herrick  v.  Carman,  12  id.  IGO;  Ilall  v.  New- 
comb,  7  Hill,  422,  per  Bochee,  Senator.     But  see  cases  supra. 

-  Tenney  v.  Prince,  4  Pick.  385.  In  this  case,  A  gave  B  a  negotiable  promissory 
note,  payable  in  twelve  montlis,  and,  three  months  before  it  fell  due,  C  indorsed  it  in 
blank.  It  was  held  that  B  could  not  declare  upon  C's  indorsement  as  an  original 
promise,  but  that  he  might  maintain  an  action  upon  it  as  a  guaranty,  upon  sliowing  a 
legal  consideration.  And  see,  to  the  same  effect,  Benthall  v.  Judiiins,  13  Met.  265 ; 
Mecorney  v.  Stanley,  8  Cush.  85. 

11 


122  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

require;  but  either  the  original  consideration  or  a  new  one  must 
attach  to  him  to  affect  him  with  a  legal  obligation.^ 

If  the  words  "  to  order,"  or  "  to  bearer,"  are  omitted  acciden- 
tally, and  by  mistake,  it  seems  that  they  may  be  afterwards  in- 
serted without  injury  to  the  bill  or  note; 2  and  whether  a  bill  or 
note  is  negotiable  or  not,  is  held  to  be  a  question  of  law.'^ 

By  the  law-merchant,  bills  and  notes  which  are  payable  to 
order,  can  be  effectually  and  fally  transferred  only  by  indorsement. 
This  indorsement  may  be  in  blank,  or  in  full.  The  writing  of 
the  name  of  a  payee  —  either  the  original  payee  or  an  indorsee 
—  with  nothing  more,  is  an  indorsement  in  blank;  and  a  blank 
indorsement  makes  the  bill  or  note  transferable  by  delivery,  in 
like  manner  as  if  it  had  been  originally  payable  to  bearer.  If 
the  indorsement  consist  not  only  of  the  name,  but  of  an  order 
above  the  name  to  pay  the  note  to  some  specified  person,  then  it 
is  an  indorsement  in  full,  and  the  note  can  be  paid  to  no  one 
else;  nor  can  the  property  in  it  be  fully  transferred,  except  by  the 
indorsement  of  the  indorsee ;  and  he  may  again  indorse  it  in 
blank  or  in  full.  If  the  indorsement  is,  pay  to  A  B  onlij,  or  in 
equivalent  words,  A  B  is  indorsee,  but  cannot  indorse  it  over.* 

Any  holder  for  value  of  a  bill  or  note  indorsed  in  blank, 
whether  he  be  the  first  indorsee  or  one  to  whom  it  has  come 
through  many  hands,  may  write  over  any  name  indorsed,  an 
order  to  pay  the  contents  to  himself,  and  this  makes  it  a  special 
indorsement,  or  an  indorsement  in  full.  This  is  often  done  for 
security ;  that  is,  to  guard  against  the  loss  of  the  note  by  acci- 
dent or  theft.  For  the  rule  of  law  is,  that  negotiable  paper  trans- 
ferable by  delivery,  (whether  payable  to  bearer  or  indorsed  in 
blank,)  is,  like  money,  the  property  of  whoever  receives  it  in  good 
faith.^  The  same  rule  has  been  extended  in  England  to  ex- 
chequer bills  ;*^  to  public  bonds  payable  to  bearer;"  and  to  East 
India  bonds  ;^  and  we  think  it  would  extend  here  to  our  railroad 

1  Josselvn  v.  Ames,  3  Mass.  274 ;  Hall  v.  Newcomb,  3  Hill,  233  ;  Seabury  v.  Hunger- 
ford,  2  Hill,  84. 

2  Kershaw  v.  Cox,  3  Esp.  246. 

3  Grant  v.  Vaughan,  3  Burr.  1516. 

*  Ancher  v.  Bank  of  England,  Doug.  637;    Edie  v.  East  India  Co.  2  Burr.  1227; 
Cramlington  v.  Evans,  2  Vent.  307;  Treuttel  v.  Barandon,  7  Taunt.  100. 

5  Miller  v.  Kace,  1  Burr.  452. 

6  Wookey  v.  Pole,  4  B.  &  Aid.  1. 

~  Gorgier  v.  Mievillc,  3  B.  &  Cr.  45. 
«  Stat.  51  Geo.  3,  c.  64. 


CH.  IX.]  OF   NEGOTIABLE   PAPER.  123 

and  other  corporation  bonds,  and,  perhaps,  to  all  such  instruments 
as  are  payable  to  bearer,  whether  sealed  or  not,  and  whatever 
they  may  be  called.^  If  one  has  such  an  instrument,  and  it  is 
stolen,  and  the  thief  passes  it  for  consideration  to  a  bond  fide 
holder,  this  holder  acquires  a  legal  right  to  it,  because  the  prop- 
erty and  possession  go  together.  But  if  the  bill  or  note  be  spe- 
cially indorsed,  no  person  can  acquire  any  property  in  it,  except  by 
the  indorsement  of  the  special  indorsee.  It  is  said,  however, 
that  this  precaution  protects  only  the  party  who  has  thus 
made  himself  a  special  indorsee;  and  that  the  former  parties 
remain  liable  in  the  same  way  as  if  the  indorsement  continued 
blank.2 

At  one  time,  this  acquirement  of  property  in  negotiable  paper 
was  defeasible  by  proof  of  want  of  care ;  that  is,  if  a  holder 
lost  his  note,  and  a  thief  or  finder  passed  it  oft'  to  a  bond  fide 
holder,  the  property  did  not  pass  if  the  circumstances  were  such 
as  to  show  negligence  on  the  part  of  the  purchaser,  or  a  want  of 
due  inquiry .2  But  this  question  of  negligence  seems  now  to  be 
at  an  end,  and  nothing  less  than  fraud  defeats  the  title  of  the 
purchaser.* 

The  written  transfer  of  negotiable  paper  is  called  an  indorse- 

1  See  State  of  Illinois  v.  Delafield,  8  Paif^c,  527. 

-  Bylcs  OQ  Bills,  115;  Smith  v.  Clark,  Peake,  225;  Walker  v.  McDonald,  2  Exch. 
527. 

3  The  doctrine  alluded  to  in  the  text  was  established  hy  the  case  of  Gill  v.  Cubitt,  3 
B.  &  Cr.  4G6.  There,  a  bill  of  exchange  was  stolen  during  the  night,  and  taken  to  the 
office  of  a  discount  broker  early  on  the  following  morning,  by  a  person  whose  features 
Avcre  known,  but  whose  name  was  unknown  to  the  broker,  and  the  latter  being  satisfied 
with  the  name  of  the  acceptor,  discounted  the  bill,  according  to  his  usual  practice, 
without  making  any  inquiry  of  the  person  who  brought  it.  Held,  in  an  action  on  the 
bill  by  the  broker  against  the  acceptor,  that  the  jury  were  properly  directed  to  find  a 
verdict  for  the  defendant  if  they  thought  the  plaintiff  had  taken  the  bill  under  circum- 
stances which  ought  to  have  excited  the  suspicion  of  a  prudent  and  careful  man. 

*  Gill  V.  Cubitt,  supra,  was  finally  overruled  in  Goodman  v.  Harvey,  4  Ad.  &  El.  870. 
It  was  there  held  that,  in  an  action  by  the  indorsee  of  a  bill  who  has  given  value,  if  his 
title  be  disputed  on  the  ground  that  his  indorser  obtained  the  discount  of  such  bill  in 
fraud  of  the  right  owner,  the  question  for  the  jury  is,  wliethcr  the  indorsee  acted  with 
good  f;\ith  in  taking  the  bill ;  that  the  question  whether  or  not  he  was  guilty  of  gross 
negligence  is  improper;  that  gross  negligence  may  be  evidence  of  mala  Jides,  but  is  not 
equivalent  to  it.  And  Lord  Denman  said:  "  The  question  I  offered  to  ^ubmit  to  the 
jury  was,  whether  the  plaintiff  had  been  guilty  of  gross  negligence  or  not.  I  believe 
we  are  all  of  opinion  that  gross  negligence  only,  would  not  be  a  sufficient  answer  where 
the  party  has  given  consideration  for  the  bill.  Gross  negligence  may  be  evidence  of 
mala  Jides,  but  is  not  the  same  thing.  We  liave  shaken  off  the  last  remnant  of  the  con- 
trary doctrine.  Where  the  bill  has  passed  to  the  plaintiff  without  any  evidence  of  bad 
fiiith  in  him,  there  is  no  objection  to  his  title."  Tiiis  case  has  been  uniformly  adhered 
to  in  England  ever  since ;  but  it  was  disapproved  of  by  tlie  Superior  Court  of  the  city 
of  Xew  York,  in  Pringlc  v.  Phillips,  5  Sandf.  157,  and  a  determination  declared  to  ad- 
here to  Gill  V.  Cubitt. 


124  ELEMENTS   OF  MERCANTILE   LAW.  [CH.   IX. 

ment,  because  it  is  almost  always  written  on  the  back  of  the 
note ;  but  it  has  its  full  legal  effect  if  written  on  the  facc.^ 

Joint  payees  of  a  bill  or  note,  who  are  not  partners,  must  all 
indorse.^ 

An  indorser  may  always  prevent  his  own  responsibility  by 
writing  "  without  recourse,"  or  other  equivalent  words,  over  his 
indorsement ;  2  and  any  bargain  between  the  indorser  and  in- 
dorsee, written  or  oral,  that  the  indorser  shall  not  be  sued,  is 
available  against  that  indorsee,  but  not  against  subsequent  in- 
dorsees without  notice* 

A  bill  or  note  may  be  indorsed  conditionally ;  and  an  acceptor 
of  a  bill  so  indorsed,  who  paid  it  before  such  condition  is  satis- 
fied or  complied  with,  has  been  held  to  pay  it  again  after  the 
condition  is  performed.^ 

Every  indorsement  and  acceptance  admits  conclusively  the 
signature  of  every  party  who  has  put  his  name  upon  the  bill 
previously  in  fact,  and  is  also  previous  in  order.*'  Thus,  an  ac- 
ceptance admits  the  signature  of  the  drawer,  but  not  the  signa- 
ture of  one  who  actually  indorses  before  acceptance,  because 
acceptance  is  in  its  nature  prior  to  indorsement.'^ 

If  a  holder  strike  out  an  indorsement  by  mistake,  he  may  re- 
store it;^  if  on  purpose,  the  indorser  is  permanently  discharged.^ 
If  the  plaintiff,  in  his  declaration,  derives  his  title  through  all  the 
previous  indorsements,  all  must  be  there,  and  proved.^*^  But  a 
holder  may  bring  his  action  against  any  prior  indorser,  and  fill 
any  blank  indorsement  specially  to  himself,  and  sue  accordingly ; 
but  then   he   invalidates   the    subsequent   indorsements.^^     The 

^  Yarborough  v.  Bank  of  England,  16  East,  6. 

'•^  Carvick  v.  Vickery,  Doug.  653;  Bennett  v.  M'Gaugliy,  3  How.  (Miss.)  192. 

3  Richardson  v.  Lincoln,  5  Met.  201  ;  Goupy  v.  Harden,  7  Taunt.  159. 

*  Pike  V.  Street,  M.  &  M.  226. 

5  Robertson  v.  Kensington,  4  Taunt.  30. 

6  Lambert  v.  Oakes,  1  Ld.  Kaym.  443,  12  Mod.  244;  Lambert  v.  Pack,  1  Salk.  127; 
Free  V.  Hakins,  Holt,  N.  P.  550 ;   Critchlow  v.  Parry,  2  Campb.  182. 

7  Smith  V.  Chester,  1  T.  R.  654. 

s  Raper  r..Birkbeck,  15  East,  17;  NovcUi  v.  Rossi,  2  B.  &  Ad.  757  ;  Wilkinson  v. 
Johnson,  3  B.  &  Cr.  428. 

9  Bylcs  on  Bills,  118. 

w  Thus,  in  an  action  against  the  maker  of  a  promissory  note,  payable  to  A  B  or 
bearer,  if  the  declaration  states  that  A  B  indorsed  it  to  the  plaintiff,  this  indorsement 
must  be  proved.     Waynam  v.  Bend,  1  Campb.  175. 

"  Ami  the  subsequent  indorsements  must  be  struck  out.  But  this  may  be  done  at 
the  trial.  Cocks  v.  Borrad*ile,  Chitty  on  Bills,  642.  In  this  case,  Abbott,  C.  J.,  said : 
"All  the  indorsements  must  be  proved,  or  struck  out,  although  not  stated  in  the  decla- 
ration.   I  remember  Mr.  Justice  Baykij  so  ruling,  and  striking  them  out  himself  on  the 


en   IX.]  OF   NEGOTIABLE   PAPER.  125 

reason  is,  that  he  takes  from  them  all  right  to  indorse;  thus,  for 
example,  if  A  makes  a  note  to  B,  and  B,  C,  D,  E,  and  F  indorse 
it  in  blank,  and  G,  the  holder,  writes  over  C's  name,  "  pay  to  G," 
it  is  as  if  C  had  written  this  himself;  and  then  G  only  could  in- 
dorse, and,  of  course,  D,  E,  and  F  could  not,  as  they  were  mere 
strangers.  And  a  holder  precludes  himself  from  taking  advan- 
tage of  the  title  of  any  party  whose  indorsement  is  thus  avoided. 
Nor  can  he  strike  out  the  name  of  any  indorser  prior  to  that  one 
whom  he  makes  defendant;  for,  by  so  doing,  he  deprives  the 
defendant  of  his  right  to  look  to  the  party  whose  name  is  stricken 
out,  and  this  discharges  the  defendant.^ 

One  may  make  a  note  or  bill  payable  to  his  own  order,  and 
indorse  it  in  blank;  and  this  is  now  very  common  in  our  com- 
mercial cities,  because  the  holder  of  such  a  bill  or  note  can  trans- 
fer it  by  delivery,  and  it  needs  not  his  indorsement  to  make  it 
negotiable  further.^ 

A  transfer  by  delivery,  without  indorsement,  of  a  bill  or  note 
payable  to  bearer,  or  indorsed  in  blank,  does  not  generally  make 
the  transferrer  responsible  to  the  transferree  for  the  payment  of  the 
instrument.  Nor  has  the  transferree  a  right  to  fall  back,  in  case 
of  non-payment,  upon  the  transferrer  for  the  original  consideration 
of  the  transfer,  if  the  bill  were  transferred  in  good  faith,  in  ex- 
change for  money  or  goods ;  for  such  transfer  would  be  held  to 
be  a  sale  of  the  bill  or  note,  and  the  purchaser  takes  it  with  all 
risks.2     But  it  seems  not  to  be  so  v^'here  such  a  note  is  delivered* 


trial;  and  this  need  not  be  done  before  the  trial."  And  see  Mayer  v.  Jadis,  1  M.  & 
Rob.  247.  If  there  are  intermediate  indorsements  between  the  payee  and  the  defend- 
ant, these  need  not  be  stated;  but  tlie  plaintiff  may  state  in  his  declaration  that  the 
payee  indorsed  to  the  defendant.     Chaters  v.  Bell,  4  Esp.  210. 

1  Curry  v.  Bank  of  Mobile,  8  Porter,  360. 

'-  See  Flight  v.  Maclean,  16  M.  &  W.  .51  ;  Wood  v.  Mytton,  10  Q.  B.  SC^;  Hooper 
V.  Williams,  2  Exch.  13;  Brown  v.  De  Winton,  6  C.  B.  342;  Gay  v.  Lander,  6  C.  B. 
336. 

''^  "It  is  extremely  clear,"  said  Lord  Kemjon,  in  Fenn  v.  Harrison,  3  T.  R.  759,  "that, 
if  the  holder  of  a  bill  send  it  to  market  without  indorsing  his  name  upon  it,  neither 
morality  nor  the  laws  of  this  country  will  compel  him  to  refund  the  money  for  which 
he  sold  it,  if  he  did  not  know  at  the  time  that  it  was  not  a  good  bill."  So,  where  a 
party  discounted  bills  with  bankers,  and  received,  in  part  of  the  discount,  other  bills, 
but  not  indorsed  by  the  bankers,  which  bills  turned  out  to  be  bad,  it  was  held  that  the 
bankers  were  not  liable.  "  Having  taken  them  without  indorsement,"  said  Lord  Kenyan, 
"  he  hath  taken  the  risk  on  himself  The  bankers  were  the  holders  of  the  bills,  and  by 
not  indorsing  them,  have  refused  to  pledge  their  credit  to  their  validity ;  and  the  trans- 
ferree must  be  taken  to  have  received  them  on  their  own  credit  only."  So,  in  Bank  of 
England  v.  Newman,  I  Ld.  Raym.  442,  where  the  defendant  had  discounted  with  the 
plaintiffs  a  bill  payable  to  bearer,  without  indorsing  it,  and  payment  of  the  bill  was 
afterwards  refused,"it  was  held  that  the  plaintiffs  could  not  maintain  an  action  against 

11* 


126  ELEMENTS    OF   MERCANTILE   LAW.  [cil.  IX. 

either  in  payment  or  by  way  of  security  for  a  previously  existing 
debt.^  Then,  if  the  transferrer  has  lost  nothing  by  the  reception 
of  the  note  by  the  transferree,  because  if  he  had  continued  to  hold 
the  note,  he  would  have  lost  it,  there  seems  to  be  no  reason  why 
the  transferree  should  lose  it.  We  have  no  doubt  that  such  a 
transferrer  may  make  himself  liable,  without  indorsement,  by  ex- 
press contract;  and  that  circumstances  might  warrant  and  require 
the  implication  that  the  bill  or  note  so  transferred  remained,  by 
the  agreement  and  understanding  of  both  parties,  at  the  risk  of 
the  transferrer.^  And  every  such  transferrer  warrants  that  the  bill 
or  note  (or  bank-note)  is  not  forged  or  fictitious.^ 

An  indorsement  may  be  made  on  the  paper  before  the  bill  or 
note  is  drawn;  and^  such  indorsement,  says  Lord  Mansfield,  "is 
a  letter  of  credit  for  an  indefinite  sum,  and  it  will  not  lie  in  the 
indorser's  mouth  to  say  that  the  indorsements  were  not  regular."  ^ 
The  same  rule  applies  to  an  acceptance  on  blank  paper.^  So, 
an  indorsement  may  be  made  after  or  before  acceptance.  If 
made  after  a  refusal  of  acceptance,  which  is  known  to  the  in- 
dorsee, he  takes  only  the  title  of  the  indorser,  and  is  subject  to  all 
defences  available  against  him.*^ 


the  defendant  to  recover  liack  tlie  money  paid  to  him.  And  Holt,  C.  J.,  said:  "If  a 
man  has  a  bill  payable  to  him  or  bearer,  and  he  delivers  it  over  for  money  received, 
without  indorsement  of  it,  this  is  a  plain  sale  of  the  hill,  and  he  who  sells  it  does  not 
become  a  new  security.  But  if  he  had  indorsed  it,  lie  had  become  a  new  security,  and 
then  he  had  been  liable  on  the  indorsement."  And  see  Ex  parte  Shultleworth,  .3  Ves. 
368  ;  Emly  v.  Lye,  15  East,  7. 

'  Thus,  in  Ward  v.  Evans,  2  Ld.  Raym.  928,  it  was  argued,  by  Darnall,  Sergeant, 
"that  if  A  sells  goods  to  B  for  £.50,  and  at  the  same  time  B  gives  A  a  note  for  £50, 
and  A  accepts  it,  this  is  an  actual  payment,  although  the  note  be  never  received,  be- 
cause it  shall  be  taken  as  part  of  the  contract  that  A  was  to  accept  such  note  in  satis- 
faction for  his  goods.  But  where  there  is  a  precedent  debt  or  duty,  such  note  will  not 
amount  to  payment  till  it  be  paid,  unless  there  be  any  negligence  and  delay  in  the  party 
who  takes  the  note,  in  going  to  receive  it."  And  Holt,  C.  J.,  said:  "I  agree  in  the 
difference  taken  by  my  brother  Darnall,  that  taking  a  note  for  goods  sold  is  a  payment, 
because  it  was  part  of  the  original  contract ;  but  paper  is  no  payment  where  there  is  a 
precedent  debt.  For,  when  such  a  note  is  given  in  payment,  it  is  always  intended  to  be 
taken  under  this  condition,  to  be  payment  if  the  money  be  paid  thereon  in  convenient 
time."  And  see,  to  the  same  effect,  Moore  v.  Warren,  1  Strange,  415  ;  Holme  v.  Barry, 
id. ;  Camidge  v.  Allenby,  6  B.  &  Cr.  373. 

2  See  Byles  on  Bills,  124. 

3  Gurney  v.  Womergley,  1  Jur.  N.  S.  328,  4  El.  &  Bl.  133;  Gompertz  v.  Bartlett,  2 
El.  &  Bl.  849 ;  Jones  v.  llyde,  5  Taunt.  488 ;  Young  v.  Cole.  3  Bing.  N.  C.  724. 

*  Russcl  V.  Langstaffe,  Doug.  514.  And  see  Collis  v.  Emett,  1  H.  Bl.  313;  Schultz 
V.  Astley,  2  Bing.  N.  C.  544  ;  Montague  v.  Perkins,  22  L.  J.,  C.P.  187.  But  see  Hatch 
V.  Searles,  2  Sm.  &  Gif.  147 ;  Awde  v.  Dixon,  6  Exch.  8G9. 

^  See  cases  supra. 

•^  Crossley  v.  Ilam,  13  East,  498.  But  if  the  indorsee  had  no  notice  of  the  refusal  to 
accept,  he  will  not  be  prejudiced  by  it.  Thus,  in  O'Kecfe  v.  Dunn,  6  Taunt.  305,  5  M. 
&  S.  282,  the  payee  of  a  bill  of  exchange  presented  it  for  acceptance,  which  was  refused. 


CH.  IX.]  OP   NIEGOTIABLE    PAPER.  127 

A  bill  or  note  once  paid  at  or  after  maturity,  ceases  to  be 
negotiable,  in  reference  to  all  who  could  be  prejudiced  by  its 
transfer.^  So,  where  a  bill  drawn  payable  to  a  third  person,  by 
whom  it  is  indorsed,  is  dishonored  and  taken  up  by  the  drawer, 
it  ceases  to  be  a  negotiable  instrument;  for  the  drawer  has  no 
title  to  indorse  it.^  But  if  one  draw  a  bill  payable  to,  his  oivn 
order,  and  indorse  it  over,  and,  upon  the  bill's  being  dishonored, 
take  it  up,  he  may  indorse  it  again,  and  this  last  indorsee  can 
recover  against  the  acceptor.'^  And  if  a  bill  or  note  is  paid  before 
it  is  due,  it  is  valid  in  the  hands  of  a  subsequent  bond  fide  in- 
dorsee.* 

A  portion  of  a  negotiable  bill  or  note  cannot  be  transferred  so 
as  to  give  the  transferree  a  right  of  action  for  that  portion  in  his 
own  narnc.5  But  if  the  bill  or  note  be  partly  paid,  it  may  be  in- 
dorsed over  for  the  balance.^  If  an  action  be  brought  on  the  bill 
or  note,  no  transfer  during  the  pendency  of  such  action  gives  to 
the  transferree  a  right  of  action,  unless  he  was  ignorant  of  the 
action  ;  then  the  transfer  is  valid.^ 

After  a  holder's  death,  his  personal  representative  should  trans- 
fer.^    But  it  seems  that  if  a  note  needing  indorsement,  was  in- 

He  neglected  to  advise  the  drawer,  and  thereby  discharged  the  drawer  as  between  the 
drawer  and  himself.  He  then  indorsed  the  bill  without  informing  his  indorsee  of  the 
refusal  to  accept.  Held,  that  the  discharge  to  the  drawer  extended  only  to  an  action  at 
the  suit  of  the  party  guilty  of  the  neglect;  and  that  the  indorsee  having  had  no  notice 
of  the  dishonor,  the  same  defence  was  not  available  against  him  as  against  his  indorser. 

1  Bartrum  v.  Caddy,  9  Ad.  &  El.  275;  Lazarus  v.  Cowie,  3  Q.  B.  459;  Eaton  v. 
McKown,  34  Maine,  510;  Cochran  u.  Wheeler,  7  N.  H.  202. 

■■^  Bacon  v.  Searls,  1  H.  Bl.  89,  n.;  Price  i'.  Sharp,  2  Iredell,  417. 

3  Hubbard  v.  Jackson,  4  Bing.  390;  Callow  v.  Lawrence,  3  M.  &  S.  95.  In  this  last 
case,  Lord  Ellenhorough  said:  "A  bill  of  exchange  is  negotiable  ad  iiijiniium,  until  it 
has  been  paid  by  or  discharged  on  behalf  of  the  acceptor.  If  the  drawer  has  paid  the 
bill,  it  seems  that  he  may  sue  the  acceptor  upon  the  bill;  and  if,  instead  of  suing  the 
acceptor,  he  put  it  into  circulation  upon  his  own  indorsement  only,  it  does  not  preju- 
dice any  of  the  other  parties  wlio  have  indorsed  the  bill,  that  the  holder  should  be  at 
liberty  to  sue  the  acceptor.  The  case  Avould  be  different  if  the  circulation  of  the  bill 
would  have  the  effect  of  prejudicing  any  of  the  indorsers."  But  this  language,  as  we 
have  seen,  must  be  taken  with  some  qualifications.     See  cases  in  preceding  note. 

*  "I  agree,"  said  Lord  Ellenborough,  in  Burridge  v.  Manners,  3  Campb.  193,  "that 
a  bill  paid  at  maturity  cannot  be  reissued,  and  that  no  action  can  afterwards  be  main- 
tained upon  it  by  a  subsequent  indorsee.  A  payment  before  it  becomes  due,  however, 
I  think  does  not  extinguish  it  any  more  than  if  it  were  merely  discounted.  A  contrary 
doctrine  would  add  a  new  clog  to  the  circulation  of  bills  of  exchange  and  promissory 
notes;  for  it  would  be  impossible  to  know  whether  there  had  not  been  an  anticipated 
payment  of  them." 

^  Hawkins  v.  Cardy,  1  Ld.  Raym.  360. 
«  Id. 

■?  Marsh  v.  Newell,  1  Taunt.  109 ;  Jones  v.  Lane,  3  Y.  &  C.  281 ;  Colombier  v.  Slim, 
Chitty  on  Bills,  217. 

*  liawlinson  v.  Stone,  3  Wils.  1  ;  "Watkins  v.  Maule,  2  Jac.  &  "Walk.  237,  243;  Rand 
V.  Hubbard,  4  Met.  252,  258. 


128  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

dorsed  by  the  holder,  but  not  delivered,  the  executor  cannot  com- 
plete the  transfer  by  delivery.'  The  husband  who  acquires  a 
right  to  a  bill  or  a  note  given  to  the  wife,  either  before  or  after 
marriage,  may  indorse.^ 

One  who  may  claim  payment  of  a  bill  or  note,  and  of  whom 
payment  may  also  be  demanded,  or  one  who  is  liable  to  con- 
tribute for  the  payment  of  a  note,  cannot  sue  upon  it.  But  if 
only  the  technical  rule  —  that  the  same  party  cannot  be  plaintiff 
and  defendant  —  prevents  the  action,  it  may  be  avoided  by  in- 
dorsement over  to  another  before  maturity.^ 


SECTION  VII. 

OP    THE    RIGHTS    AND    DUTIES    OF    THE    ACCEPTOR. 

Acceptance  applies  to  bills  and  not  to  notes.  It  is  an  engage- 
ment of  the  person  on  whom  the  bill  is  drawn  to  pay  it  according 
to  its  tenor.  The  usual  way  of  entering  into  this  agreement,  or 
of  accepting,  is  by  the  drawee's  writing  his  name  across  the  face 
of  the  bill,  and  writing  over  it  the  word  "  accepted."  But  any 
other  word  of  equivalent  meaning  may  be  used,  and  it  may  be 
written  elsewhere,  and  it  need  not  be  signed,  or  the  drawee's 
name  alone  on  the  bill  may  be  enough.^  But  if  accepted  irregu- 
larly, or  in  an  unusual  way,  the  question  whether  it  were  accepted 
would  generally  go  to  a  jury  under  the  direction  of  the  court.^ 
A  written  promise  to  accept  a  future  bill,  if  it  distinctly  define 
and  describe  that  very  bill,  has  been  held  in  this  country  as  the 
equivalent  of  an  acceptance,  if  the  bill  was  taken  on  the  credit 
of  such  promise.^    But  this  doctrine  of  virtual  acceptance  should, 

'  Bromage  v.  Lloyd,  1  Exch.  32. 

2  Conner  v.  Martin,  3  Wil.  5,  1  Strange,  516;  Barlow  v.  Bishop,  1  East,  432;  Mason 
V.  Morgan,  2  Ad.  &  El.  30. 

3  Morley  v.  Culverwell,  7  M.  &  W.  174;  Steele  v.  Harmer,  14  M.  &  W.  831, 
4  Exch.  1. 

*  Anonymous,  Comb.  401  ;  Powell  v.  Monnier,  2  Atk.  611 ;  Dufaur  v.  Oxenden, 
1  M.  &  Rob.  90. 

5  Id. 

^  Coolidge  V.  Payson,  2  Wheat.  66  ;  Schimmclpennich  v.  Bayard,  1  Pet.  264  ;  Boyce 
V.  Edwards,  4  id.  121.  And  in  New  York  it  has  been  declared  by  statute,  that  "  an  un- 
conditional promise,  in  writing,  to  accept  a  bill  before  it  is  drawn,  shall  be  deemed  an 
actual  acceptance,  in  favor  of  every  person  who,  upon  the  faith  thereof,  shall  have 
received  the  bill  for  a  valuable  consideration."     1  R.  S.  768,  §  8. 


CH.  IX.]  OP   NEGOTIABLE    PAPER.  129 

perhaps,  have  no  application  to  a  bill  drawn  payable  at  some 
fixed  period  aftei'  sight}  In  England  and  in  this  country,  gen- 
erally, an  acceptance  may  be  by  parol.-  And  it  is  said  that  a 
promise,  whether  written  or  verbal,  to  paij  an  existing  bill,  is  an 
acceptance.^  But  the  language,  whether  oral  or  written,  although 
no  form  be  prescribed  for  it,  must  not  be  ambiguous.*  It  must 
distinctly  import  acceptance,  or  an  agreement  to  do  what  accept- 
ance would  bind  the  party  to  do  ;  and  mere  delentinn  of  the  bill 
is  not  acceptance.^  • 

An  acceptance  admits  the  signature  and  capacity  of  the 
drawer; 6  and  the  capacity  at  that  time  of  the  payee  to  indorse, 
which  is  also  admitted  by  the  maker  of  a  promissory  note;  and 
this  cannot  be  denied,  although  the  payee  be  an  infant,  a  married 
woman,  or  a  bankrupt.'''  But  the  acceptance  does  not  admit  the 
validity  of  an  existing  indorsement  ;S  nor,  if  it  be  by  an  agent, 
his  authority ;  9  if,  however,  the  acceptor  knew  that  the  indorse- 
ment was  forged  or  made  without  authority,  he  cannot  use  the 
fact  in  his  defence."^  But  if  the  bill  is  drawn  in  a  fictitious  name, 

'  Per  Story,  J.,  in  Wildes  v.  Savage,  1  Story,  22.  And  see  Kussell  v.  Wiggiu,  2 
Story,  213. 

-  Luinlev  r.  Palmer,  2  Strange,  1000;  Eex  v.  Maggott,  Chitty  on  Bills,  288;  Julian 
r.  Schobrooke,  2  Wil.  9;  Powell  v.  Monnier,  2  Atk.  611;  Sproat  v.  Matthews,  1  T. 
R.  182  ;  Clarke  v.  Cock,  4  East,  72  ;  Edson  v.  Fuller,  2  Fost.  183.  But  in  New  York 
it  is  declared  by  statute,  that  '-no  person  within  that  State  shall  be  charged  as  an  ac- 
ceptor on  a  bill  of  exchange,  unless  his  acceptance  shall  be  in  writing,  signed  by  him- 
self or  his  lawful  agent ;  and  if  such  acceptance  be  written  on  a  paper,  other  than  the 
bill,  it  shall  not  bind  the  acceptor,  except  in  favor  of  a  person  to  whom  such  acceptance 
shall  have  been  shown,  and  who,  on  the  faith  thereof,  shall  have  received  the  bill  for  a 
valuable  consideration."     1  R.  S.  768,  §§  6,  7. 

3  Clark  y.  Cock,  4  East,  72;  AVynne  w.  Raikes,  5  id.  514;  Edson  r.  Fuller,  2  Fost.  183. 

*  Rees  V.  Warwick,  2  B.  &  Aid.  113.  In  this  case,  the  drawer  of  a  bill  wrote  to  the 
drawee,  stating  that  he  had  valued  on  him  for  the  amount,  and  added,  ''  which  please 
to  honor;  "  to  which  the  drawee  answered,  "  the  bill  shall  have  attention."  Held,  that 
these  words  were  ambiguous  and  did  not  amount  to  an  acceptance  of  the  bill.  And 
Abbott,  C.  J.,  said:  "  The  phrase  'shall  have  attention,'  is  at  least  ambiguous;  it  may 
mean  that  the  defendant  would  examine  and  inquire  into  the  state  of  the  accounts  be- 
tween them,  for  the  purpose  of  ascertaining  whether  he  would  accept  the  bill  or  not. 
If,  indeed,  it  could  have  been  shown  that  these  words,  either  generally  in  the  mercan- 
tile world,  or  as  between  these  individual  parties,  meant  an  acceptance  of  the  bill  to 
which  they  related,  the  case  would  have  been  different.  But  that  has  not  been  done." 
And  sec  Powell  v.  Jones,  1  Esp.  17. 

5  Mason  v.  BarfiF,  2  B.  &  Aid.  26. 

•5  Wilkinson  v.  Lutwidge,  1  Strange,  648;  Jenvs  v.  Fawler,  2  id.  946;  Price  v.Neale, 
3  Burr.  1354;  Bass  v.  Clive,  4  M.  &  S.  15  ;  Smhh  v.  Mercer,  6  Taunt.  76;  Robinson 
V.  Reynolds,  2  Q.  B.  196  ;  Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287. 

'  Drayton  v.  Dale,  2  B.  &  Cr.  293 ;  Braithwaite  v.  Gardiner,  8  Q.  B.  473 ;  Taylor  v. 
Croker,  4  Esp.  187 ;  Ilallifax  v.  Lyle,  3  Exch.  446 ;  Smith  v.  Marsack,  6  C  B.  486. 

8  Smith  V.  Chester,  1  T.  R.  654;  Beeman  v.  Duck,  11  M.  &  W.  251 ;  Tucker  v. 
Robarts,  18  L.  J.,  Q.  B.  169. 

^  Robinson  w.  Yarrow,  7  Taunt.  455. 

10  Beeman  v.  Duck,  11  M.  &  W.  251. 


130  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

the  acceptor  is  said  to  be  bound  to  pay  on  an  indorsement  by 
the  same  hand.^  But  a  bill  drawn  and  indorsed  in  a  fictitious 
name,  with  the  knowledge  of  the  drawer,  may,  and  perhaps 
should  be,  declared  on  as  payable  to  bearer.^  In  general,  any 
party  who  gives  credit  and  circulation  to  negotiable  paper,  ad- 
mits, so  far  as  he  is  concerned,  all  properly  antecedent  names.^ 

A  banker  is  liable  to  his  customer  without  acceptance,  if  he 
refuses  to  pay  checks  drawn  against  funds  in  his  hands.'*  So  it 
seems  that  a  banker,  at  whose  house  a  customer,  accepting  a  bill, 
makes  it  payable,  is  liable  to  an  action  at  the  suit  of  the  cus- 
tomer, if  he  refuse  to  pay  it,  having  at  the  time  of  presentment 
sufficient  funds,  and  having  had  those  funds  a  reasonable  time, 
so  that  his  clerks  and  servants  might  know  it.^  But  he  is  not 
liable  to  the  holder  of  the  bill  for  money  had  and  received,  even 
if  funds  have  been  remitted  to  meet  it,  unless  he  has  assented  to 
hold  and  apply  them  for  that  purpose;^  but  that  assent  may  be 
implied  from  usage  or  circumstances.  And  the  banker  has 
authority  from  the  bill  itself  to  apply  to  its  payment  the  funds  of 
the  acceptor.''' 

There  cannot  be  two  or  more  acceptors  of  the  same  bill  not 
jointly  responsible,  as  partners  are.^  If  accepted  by  a  part  only 
of  those  jointly  responsible,  or  joint  drawers,  it  may  be  treated 
as  dishonored ;  but  if  not  so  treated,  the  parties  accepting  will 
be  bound. 

An  acceptance  may  be  made  after  maturity,  and  will  be  treated 
as  an  acceptance  to  pay  on  demand ;  and  if  the  words  "  accord- 

'  Cooper  V.  Meyer,  10  B.  &  Cr.  468;  Beeman  v.  Duck,  11  M.  &  W.  251. 

2  Gibson  v.  Minet,  1  H.  Bi.  569;  Beeman  v.  Duck,  11  M.  &  W.  251. 

^  See  ante,  p.  124,  n.  6. 

*  Marchetti  v.  Williams,  1  B.  &  Ad.  415;  Kolin  v.  Steward,  14  C.  B.  595. 

s  Whitaker  v.  The  Bank  of  England,  1  Cr.  M.  &  Eos.  744. 

«  Williams  v.  Everett,  14  East,  582;  Yates  v.  Bell,  3  B.  &  Aid.  643. 

^  Kymer  r.  Laurie,  18  L.  J.,  Q.  B.  218. 

^  Jackson  v.  Hudson,  2  Campb.  447.  In  this  case,  the  plaintiff  and  one  Irving  hav- 
ing dealings  together,  the  plaintiff  refused  to  supply  Irving  with  goods,  unless  the_  de- 
fendant would  become  his  surety.  The  defendant  agreed  to  do  it.  Goods  to  the  value 
of  .£157  were  accordingly  supplied.  For  the  amount  the  plaintiff  drew  a  bill  on  Irving, 
which  was  accepted  both  by  Irving  and  the  defendant,  each  writing  his  name  on  it.  In 
an  action  on  the  bill  against  the  defendant  as  acceptor,  the  plaintiff  was  nonsuitejl. 
And  Lord  EUenborough  said:  "If  you  had  declared  that,  in  consideration  of  the  plaintiff 
selling  the  goods  to  Irving,  the  defendant  undertook  that  the  bill  should  be  paid,  you 
might  have  fixed  him  by  this  evidence.  But  I  know  of  no  custom  or  usage  of  mer- 
chants, according  to  which,  if  a  bill  be  drawn  upon  one  man,  it  may  be  accepted  by 
two.  The  acceptance  of  the  defendant  is  contrary  to  the  usage  and  custom  of  mer- 
chants. A  bill  must  be  accepted  by  the  drawee,  or,  failing  him,  by  some  one  for  the 
honor  of  the  drawer.    There  cannot  be  a  series  of  acceptors." 


CII.  IX.]  OF  NEGOTIABLE  PAPER.  131 

ing  to  the  tenor  and  effect  of  the  bill,"  or  like  words,  are  used, 
they  will  be  regarded  as  of  no  effect.^ 

The  acceptance  may  be  cancelled  by  the  holder;  and  if  volun- 
tary and  intended,  this  cancelling  is  complete  and  effectual ;  but 
if  made  by  mistake,  by  him  or  other  parties,  and  this  can  be 
shown,  the  acceptor  is  not  discharged.-  And  if  the  cancelling  be 
by  a  third  party,  it  is  for  the  jury  to  say  whether  the  holder 
authorized  or  assented  to  it."^ 

The  liability  of  an  acceptor  or  maker  is  destroyed  by  receiving 
from  him  a  coextensive  or  greater  security  by  specialty,  unless  it 
is  distinctly  agreed  and  declared  that  the  bill  or  note  remains  in 
force.'^ 

If  a  qualified  acceptance  be  offered,  the  holder  may  accept  or 
refuse  it.  If  he  refuses  it,  he  may  treat  the  bill  as  dishonored ;  if 
he  accepts  it,  he  should  notify  antecedent  parties,  and  obtain 
their  consent;  without  which  they  are  not  liable.^  But  if  he  pro- 
tests the  bill  as  dishonored,  for  this  reason,  he  cannot  hold  the 
acceptor  upon  his  conditional  acceptance.'^ 

A  bill  can  be  accepted  only  by  the  drawee  —  in  person  or  by 
his  authorized  agent  —  or  by  so77ie  one  ivho  accepts  for  honor.'' 
And  a  bill  drawn  on  one  incompetent  to  contract,  as  from  in- 
fancy, coverture,  or  lunacy,  may  be  treated  as  dishonored.^ 


SECTION  VIII. 

OF   ACCEPTANCE   FOR   HONOR. 

If  a  bill  be  protested  for  non-acceptance  or  for  better  security, 
any  person  may  accept  it,  for  the  honor  either  of  the  drawer  or 
of  any  indorser.     This  he  should  distinctly  express  at  the  time 

'  Jackson  v.  Pigott,  1  Ld.  Raym.  36-1 ;  Mutford  v.  Walcot,  id.  .574 ;  Williams  v. 
Winans,  2  Green,  339. 

'^  Wilkinson  v.  Johnson,  3  B.  &  Cr.  428  ;  Raper  v.  Biikbeck,  15  East,  17.  And  see 
ante,  p.  124,  n.  8. 

3  Sweeting  v.  Halsc,  9  B.  &  Cr.  365. 

*  Twopenny  v.  Young,  3  B.  &  Cr.  208. 

5  Sebag  V.  Abitbol,  4  M.  &  S.  4G2,  per  Bayley,  J. ;  Boebm  v.  Garcias,  1  Campb.  425; 
Gammon  v.  Schmoll,  5  Taunt.  353,  per  Chambre,  J. 

«  Sproat  V.  Matthews,  1  T.  11.  182  ;  Bentinck  i-.  Dorrien,  6  East,  200. 

'  Polhill  V.  Walter,  3  B.  &  Ad.  114;  Davis  v.  Clarke,  6  Q.  B.  16. 

8  Chitty  on  Bills,  310,  (8th  ed.) 


132  ELEMENTS  OF  MERCANTILE  LAW.         [CH.  IX. 

when  he  makes  his  acceptance,  before  a  notary-public,  and  it 
should  be  noted  by  him.'  A  general  acceptance  supra  protest, 
for  honor,  is  taken  to  be  for  honor  of  the  drawer.^  The  drawee 
himself,  refusing  to  accept  it  generally,  may  thus  accept  for  the 
honor  of  the  drawer  or  an  indorser.^  And  after  a  bill  is  accepted 
for  honor  of  one  party,  it  may  be  accepted  by  another  person  for 
honor  of  another  party.*  And  an  acceptance  for  honor  may  be 
made  at  the  intervention  and  request  of  the  drawee.^ 

No  holder  is  obliged  to  receive  an  acceptance  for  honor ;  he 
may  refuse  it  wholly.^  If  he  receive  it,  he  should,  at  the  maturity 
of  the  bill,  present  it  for  payment  to  the  drawee  who  may  have 
been  supplied  with  funds  in  the  mean  time.'^  If  not  paid,  the 
bill  should  be  protested  for  non-payment,  and  then  presented  for 
payment  to  the  acceptor  for  honor.^ 

The  undertaking  of  the  acceptor  for  honor  is  collateral  only ; 
being  an  engagement  to  pay  if  the  drawee  does  not.^     It  can 

'  In  Beawes'  Lex  Mercatoria,  5th  ed.  p.  435,  pi.  38,  it  is  said :  "  The  method  of  ac- 
cepting supra  protest  is  as  follows,  namely  :  the  acceptor  must  personally  appear  before 
a  notary-public  with  witnesses,  whether  the  same  that  protested  the  bill  or  not,  is  of  no 
importance,  and  declare  that  he  doth  accept  such  protested  bill  in  honor  of  the  drawer, 
or  indorser,  &c.,  and  that  he  will  satisfy  the  same  at  the  appointed  time;  and  then  he 
must  subscribe  the  bill  with  his  own  hand,  thus:  '-Accepted,  s(y;rrt  protest,  in  honor 
of  T.  B.,  &c." 

2  Chitty  on  Bills,  376,  (8th  ed.) ;  Beawes,  pi.  39. 

3  Beawes,  pi.  33. 
*  Beawes,  pi.  42. 

5  Konig  V.  Bayard,  1  Pet.  250. 

6  Mitford  V.  Walcott,  12  Mod.  410;  Gregory  v.  Walcup,  Com.  C7 ;  Pillans  v.  Van 
Mierop,  3  Burr.  1663. 

■?  In  Hoare  v.  Cazenove,  16  East,  391,  it  was  held  that  the  acceptors  of  a  foreign  bill 
of  exchange,  who,  after  presentment  to  the  drawees  for  acceptance,  and  a  refusal  by 
them  to  accept,  and  protest  for  non-acceptance,  accept  the  same  for  the  honor  of  the 
first  indorsers,  are  not  liable  on  such  acceptance,  unless  there  has  been  a  presentment 
of  the  bill  to  the  drawees  for  payment,  and  a  protest  for  non-payment.  And  Lord 
Ellcnhorough  said  :  "  The  reason  of  the  thing,  as  well  as  the  strict  law  of  the  case,  seems 
to  render  a  second  resort  to  the  drawee  proper,  when  the  unaccepted  bill  still  remains 
with  the  holder;  for  effects  often  reach  the  drawee,  who  has  refused  acceptance  in  the 
first  instance,  out  of  which  the  bill  may  and  would  be  satisfied,  if  presented  to  him 
again  when  the  period  of  payment  liad  arrived.  And  the  drawer  is  entitled  to  the 
chance  of  benefit  to  arise  from  such  second  demand,  or  at  any  rate  to  the  benefit  of  that 
evidence  which  the  protest  affords,  that  the  demand  has  been  made  duly  without  effect, 
as  far  as  such  evidence  may  be  available  to  him  for  purposes  of  ulterior  resort." 

8  Williams  v.  Germaine,  7  B.  &  Cr.  468 ;  Mitchell  v.  Baring,  10  id.  4.  And  see 
preceding  note. 

^  In  Williams  v.  Germaine,  7  B.  &  Cr.  477,  Lord  Tenterden,  after  citing  Hoare  v. 
Casenove,  supra,  said :  "  The  result,  as  it  seems  to  me,  of  the  decision  to  which  I  have 
alluded  is,  that  an  acceptance  for  honor  is  to  be  considered  not  as  absolutely  such,  but 
in  tlie  nature  of  a  conditional  acceptance.  It  is  equivalent  to  saying  to  the  holder  of 
the  bill,  '  Keep  this  bill,  don't  return  it,  and  wlien  the  time  arrives  at  which  it  ought  to 
be  paid,  if  it  be  not  paid  by  the  party  on  whom  it  was  originally  drawn,  come  to  me, 
and  you  shall  have  the  money.'.  This  appears  to  me  to  be  a  very  sensible  interpreta- 
tion of  the  nature  of  acceptances  for  honor,  where  the  parties  say  nothing  upon  the 
subject." 


CH.  IX.]  OF   NEGOTIABLE   PAPER.  133 

only  be  made  for  some  party  who  will  certainly  be  liable  if  the 
bill  be  not  paid ;  because,  by  an  acceptance  properly  made,  for 
honor,  supra  protest,  such  acceptor  acquires  an  absolute  claim 
against  the  party  for  whom  he  accepts,  and  against  all  parties  to 
the  bill  antecedent  to  him,  for  all  his  lawful  costs,  payments, 
and  damages,  by  reason  of  such  acceptance.^  If  a  third  party 
takes  up  a  bill  at  its  maturity  for  the  honor  of  the  drawer  and 
at  his  request,  he  discharges  an  accommodation  acceptor  for 
honor  although  he  may  not  have  intended  doing  so.^ 

1  Chitty  pn  Bills,  352. 

'  In  an  action  by  A  against  B,  the  acceptor  of  a  bill  drawn  by  C  in  favor  of  D,  and 
indorsed  by  D  to  A,  it  appeared  on  tiie  trial  that  B  was  an  accommodation  acceptor 
of  C  ;  and  the  court  instructed  the  jury  that  if  they  believed,  from  the  evidence,  that 
the  plaintiff  took  up  the  bill  at  its  maturity  at  the  request  of  C,  the  drawer,  and  for  his 
benefit,  it  was  a  payment  of  the  bill,  and  they  must  find  for  the  defendant,  whether  A 
and  C  intended  to  release  B,  the  acceptor,  or  not.  It  is  certain  that,  if  the  drawer  had 
taken  up  the  bill  himself,  no  action  would  lie  upon  it,  and  a  third  party,  taking  it  up 
for  him,  must  occupy  the  same  position.  McDowell  v.  Cook,  6  Sm.  «&  M.  420; 
Ex  parte  Lambert,  13  Ves.  179. 


12 


134  ELEMENTS   OF   MEKCANTILE   LAW.  [CH.  X. 


CHAPTER   X. 

AGENCY.  • 

SECTION  I. 

OF   AGENCY   IN   GENERAL. 

The  relation  of  principal  and  agent  implies  that  the  principal 
acts  by  and  through  the  agent,  so  that  the  acts  in  fact  of  the 
agent  are  the  acts  in  law  of  the  principal;  and  only  when  one 
is  authorized  by  another  to  act  for  him  in  this  way  and  to  this 
extent,  is  he  an  agent.  One  may  act  as  the  agent  of  another 
who  is  disqualified  from  contracting  on  his  own  account;  as  in- 
fants, married  women,  and  aliens.^ 

A  principal  is  responsible  for  the  acts  of  his  agent,  not  only 
when  he  has  actually  given  full  authority  to  the  agent  thus  to 
represent  and  act  for  him,  but  when  he  has,  by  his  words,  or  his 
acts,  or  both,  caused  or  permitted  the  person  with  whom  the 
agent  deals,  to  believe  him  to  be  clothed  with  this  authority. 
And  a  man  may  be  thus  held  as  a  principal,  because 'he  has  in 
some  way  justified  all  persons  in  believing  that  he  has  consti- 
tuted some  other  man  his  agent,  or  because  he  has  justified  only 
the  party  dealing  with  the  supposed  agent,  in  so  believing.  For 
all  responsibility  rests  upon  two  grounds,  which  are  commonly 
united,  but  either  of  which  is  sufficient ;  one,  the  giving  of  actual 
authority  ;  the  other,  such  appearing  to  give  authority  as  justifies 
those  who  deal  with  the  supposed  agent,  in  believing  that  he 
possesses  this  authority.^ 

A  general  agent  is  one  authorized  to  represent  his  principal  in 

1  Co.  Litt.  52,  a;  Bac.  Abr.  Autliority,  (B.) ;  Cora.  Dig.  Attorney,  (C.  4.)  A  wife 
may  act  as  the  agent  of  her  husband.  Hopkins  v.  Mollinieux,  4  Wendell,  465.  A  slave 
maybe  an  agent.  Chastain  u.  Bowman,  1  Hill,  (So.  Car.)  270;  Gore  i;.  Buzzard,  4 
Leigh,  231  ;  The  Governor  v.  Daily,  14  Ala.  469. 

2  Davis  V.  Lane,  10  N.  H.  156  ;  Beard  v.  Kirk,  11  id.  397;  Dispatch  Line  of  Packets 
V.  Bellamy  Manuf.  Co.  12  id.  224 ;  Bulklcy  v.  The  Derby  Fishing  Co.  2  Conn.  259. 


CH.  X.]  AGENCY.  135 

all  his  business,  or  in  all  his  business  of  a  particular  kind.  A 
particular  agent  is  one  authorized  to  do  only  a  specific  or  a  few 
specified  things^  It  is  not  always  easy  to  discriminate  between 
these;  but  it  is  often  important;  by  reason  of  the  rule,  that  the 
authority  of  a  general  agent  is  measured  by  the  usual  scope  and 
character  of  the  business  he  is  empowered  to  transact.^  By  ap- 
pointing him  to  do  that  business,  the  principal  is  considered  as 
saying  to  the  world  that  his  agent  has  all  the  authority  necessary 
to  the  doing  of  it  in  the  usual  way.  And  if  the  agent  transcends 
his  actual  authority,  but  does  not  go  beyond  the  natural  and 
usual  scope  of  the  business,  the  principal  is  bound,  unless  the 
party  with  whom  the  agent  dealt  knew  that  the  agent  exceeded 
his  authority.^  For,  if  an  agent  does  only  what  is  natural  and 
usual  in  transacting  business  for  his  principal,  and  yet  goes  be- 
yond the  limits  prescribed  by  him,  it  is  obvious  that  the  principal 
must  have  put  particular  and  unusual  limitations  to  his  author- 
ity ;  and  these  cannot  afiect  the  rights  of  a  third  party  who  deals 
with  the  agent  in  ignorance  of  these  limitations.  But,  on  the 
other  hand,  tli^  rule  is,  that  if  an  agent  who  is  specially  author- 
ized to  do  a  specific  thing,  exceeds  his  authority,  the  principal  is 
not  bound;  because  the  party  dealing  with  such  agent  must 
inquire  for  himself,  and  at  his  own  peril,  into  the  authority  given 
to  the  agent.  Here,  however,  as  before,  if  the  party  dealing  with 
the  agent,  and  inquiring,  as  he  should,  into  his  authority,  has 
sufficient  evidence  of  this  authority  furnished  to  him  by  the  prin- 
cipal, and,  in  his  dealings  with  the  agent,  acts  within  the  limits 
of  the*  authority  thus  proved,  he  cannot  be  affected  by  any  reser- 
vations and  limitations  made  secretly  by  the  principal,  and  wholly 
unknown  to  the  person  dealing  with  the  agent.* 

1  Whitehead  v.  Tuckett,  15  East,  400;  Anderson  v.  Coonley,  21  Wend.  279;  Trundy 
V.  Farrar,  32  Maine,  225.  If  an  agency  be  proved,  without  its  extent  being  shown,  it 
is  presumed  to  be  a  general  agency.     Methuen  Co.  r.  Hayes,  33  Maine,  169. 

-  Pickering  v.  Busk,  15  East,  38;  Whitehead  v.  Tuckett,  id.  400  ;  Saltus  v.  Everett, 
20  Wend.  267  ;  Lobdell  v.  Baker,  1  Met.  202. 

'^  Smethurst  v.  Taylor,  12  M.  &  W.  545;  Commercial  Bank  of  Buffalo  i'.  Kortright, 
22  Wend.  361  ;  Lighthody  v.  North  American  Ins.  Co.  23  Wend.  22  ;  Lobdell  i-.  Baker, 
1  Met.  202 ;  Commercial  Bank  of  Lake  Erie  v.  Norton,  1  Ilill,  501  ;  Johnson  v.  Jones, 
4  Barb.  369 ;  Bryant  v.  Moore,  26  Maine,  84  ;  Hatch  v.  Taylor,  10  N.  H.  550,  551.  It 
is  not  necessary,  in  order  to  authorize  the  inference  of  general  agency,  that  the  person 
should  have  done  an  act  the  same  in  specie ;  but  it  is  sufiicient  if  he  has  done  things 
of  the  same  general  character  with  his  principal's  assent.  Commercial  Bank  of  Lake 
Erie  v.  Norton,  1  Ilill,  501. 

*  Hatch  V.Taylor,  10  N.  H.  538;   Bryant  v.  Moore,  26  Maine,  84;    McClung  v. 


136  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  X. 


SECTION   II. 
nOAr   AUTHORITY   MAY   BE   GIVEN   TO    AN   AGENT. 

It  may  be  given  under  seal,  in  writing  without  seal,  or  orally. 
And  an  oral  appointment  authorizes  the  agent  to  make  a  written 
contract,'  but  not  to  execute  instruments  under  seal.^  Nor,  as  it 
seems,  if  an  agent  has  parol  authority  to  make  a  contract,  and 
affixes  a  seal  to  it,  will  the  seal  be  treated  as  a  nullity,  in  order 
to  give  to  the  instrument  the  effect  of  a  simple  contract.^  But 
an  instrument  under  seal,  executed  in  the  principal's  presence, 
and  by  his  request  and  authority,  will  be  regarded  as  the  princi- 
pal's deed,  made  by  himself.*  One  employed  by  another  to  act 
for  him  in  the  usual  trade  or  business  of  the  agent,  as  auctioneer, 
broker,  or  the  like,  acquires  thereby  authority  to  do  all  that  is 
necessary  or  usual  in  that  business.^ 

If  one  is  repeatedly  employed  to  do  certain  thinfs  —  as  a  wife,^ 

Spotswood,  19  Ala.  165.  In  both  general  and  special  agencies,  a  power  to  do  an  act 
includes  authority  to  execute  the  usual  and  necessary  measures  to  accomplish  it. 
Valentine  v.  Piper,  22  Pick.  92;  Goodale  v.  Wheeler,  1 1  N.  H.  428,  429 ;  Anderson  v. 
Coonley,  21  Wend.  279;  Yerby  v.  Grigsby,  9  Leigh,  387. 

1  Anonymous,  12  Mod.  564:  Coles  v.  Trecothick,  9  Ves.  234,  250;  Clinan  v.  Cooke, 
1  Sch.  &  Lef.  22  ;  Ewing  v.  Tees,  1  Binn.  450  ;  Trundy  v.  Farrar,  32  Maine,  225.  And 
this  is  so,  even  wliere  the  contract  is  required  to  be  in  writing  by  the  Statute  of  Frauds. 
Maclean  v.  Uunn,  4  Bing.  722;  Shaw  v.  Nudd,  8  Pick.  9;  Merritt  v.  Clason,  12  Johns. 
102;  M'Comb  v.  Wright,  4  Johns.  Ch.  659;  Ewing  v.  Tees,  1  Binney,  450;  Law- 
rence V.  Taylor,  5  Hill,  107 ;  Graham  v.  Musson,  5  Bing.  N.  C.  603;  Yerby  v.  Grigsby, 
9  Leigh,  387.  Except  in  those  cases  where  the  statute  expressly  recjuires  the  authority 
to  be  in  writing.     Vanhorne  v.  Frick,  6  S.  &  R.  90. 

^  Co.  Litt.  48,  b;  Gordon  v.  Bulkeley,  14  S.  &  R.  331 ;  Hanford  v.  McNair,  9  Wend. 
54;  Blood  v.  Goodrich,  9  id.  68;  Cooper  v.  Rankin,  5  Binn.  613  ;  Gordon  v.  Bulkeley, 
14  S.  &  R.  331 ;  Plummer  v.  Russell,  2  Bibb,  174  ;  Hatch  v.  Smith,  5  Mass.  52. 

3  Wheeler  v.  Morris,  34  Maine,  54.  But  see  Worrall  v.  Munn,  1  Selden,  229;  Law- 
rence V.  Taylor,  5  Hill,  113;  Milton  v.  Mosher,  7  Met.  244;  Osborne  v.  Horner,  11 
Iredell,  359. 

*  Gardner  v.  Gardner,  5  Cush.  483;  Wood  v.  Goodridge,  6  id.  120;  Kime  v.  Brooks, 
9  Iredell,  218. 

^  "If  a  person  put  goods  into  the  custody  of  another  whose  common  business  it  is  to 
sell  without  limiting  his  authority,  he  thereby  confers  an  implied  authority  upon  him 
to  sell  them."  Per  Baykji,  J.,  in  Pickering  i'.  Busk,  15  East,  38.  See  Salters  v.  Eve- 
rett, 20  Wend.  267,  281  ;  Anderson  v.  Coonley,  21  id.  279 ;  Valentine  v.  Piper,  22  Pick. 
92  ;  Goodale  v.  Wheeler,  11  N.  H.  428,  429. 

0  Prestwick  v.  Marshall,  7  Bing.  565;  Huckman  v.  Fernie,  3  M.  &  W.  505;  Attorney- 
General  V.  Riddle,  2  C.  &-Jer.  493;  Piiniincr  r.  Sells,  3  N.&  Mann.  422;  Lord  "v. 
Hall,  8  C.  B.  627  ;  Renaux  v.  Teakle,  20  E.  L.  &  Eq.  345.  The  wife  is  prhml  facie  the 
husband's  agent  in  managing  tl>.e  affairs  of  the  household.  Pickering  v.  Pickering,  6 
N.  H.  124;  Mackinley  v.^M'Gregor,  3  Whart.  369.     The  liability  of  a  man  for  the 


en.  X.]  AGENCY.  137 

or  a  son,'  to  sign  bills  or  receipts;  or  a  domestic  servant  to  make 
purchases;  or  a  merchant  or  broker  to  sign  policies,  and  the  like;^ 
in  all  these  cases,  one  dealing  with  the  person  thus  usually  em- 
ployed, is  justified  in  believing  him  authorized  to  do  those  things, 
with  the  assent  and  approbation  of  his  employer,  and  in  the  way 
in  which  he  has  done  them ;  but  not  otherwise.  Thus,  if  a  ser- 
vant is  usually  employed  to  buy,  but  always  for  cash,  this  im- 
plies no  authority  to  buy  on  credit."^ 

An  agency  may  be  confirmed  and  established,  and  in  fact 
created  by  a  subsequent  adoption  and  ratification;*  but  only 
where  the  act  was  done  by  one  purporting  to  be  an  agent,  or  by 
an  assumed  authority .'^  Generally,  one  who  receives  and  holds 
a  beneficial  result  of  the  act  of  another  as  his  agent,  is  not  per- 
mitted to  deny  such  agency ;  ^  and  in  some  cases  this  is  extended 
even  to  acts  of  such  agent  under  seal.'^     And  if  one,  knowing 

acts  of  a  woman  not  his  wife,  but  witli  whom  he  cohabits  as  such,  is  similar.  Watson 
V.  Thrclkekl,  2  Esp.  637 ;  Robinson  v.  Nahon,  1  Camp.  245  ;  Ryan  v.  Sams,  12  Q.  B. 
460.  In  the  absence  of  the  husband,  the  wife  has  a  general  authority,  unless  the 
husband  has  otherwise  delegated  it,  to  exercise  usual  and  ordinary  control  oj^er  his 
property.  Church  v.  Landers,  10  Wend.  79;  Felker  v.  Emerson,  16  Vt.  653.  But  she 
has  no  implied  authority  to  enter  into  extraordinary  and  unusual  contracts.  Webster 
V.  M'Ginuis,  5  Binney,  235;  Green  v.  Spemy,  16  Vt.  390;  Benjamin  v.  Benjamin,  15 
Conn.  347  ;  Shelton  v.  Pendleton,  18  id.  417.  As  to  the  husband's  liability  for  neces- 
saries furnished  to  his  wife,  see  1  Parsons  on  Contracts,  pp.  43,  287,  289-304. 

'  Watkins  v.  Vince,  2  Stark.  368. 

-  Brockelbank  v.  Sugrue,  5  C.  &  Payne,  21 ;  Haughton  v.  Ewbank,  4  Campb.  88; 
Dows  V.  Greene,  16  Barb.  72. 

3  Rusby  V.  Scarlett,  5  Esp.  75;  Flemyng  v.  Hector,  2  M.  &  W.  181,  per  Lord 
Ahinger,  C.  B. 

*  Townsend  v.  Inglis,  Holt,  N.  P.  278  ;  Haughton  v.  Ewbank,  4  Campb.  88  ;  Barber  v. 
Gingell,  3  Esp.  60 ;  Lucena  v.  Craufurd,  1  Taunt.  325  ;  Clark's  Ex'rs  v.  Van  Riemsdyk, 
9  Cranch,  158  ;  Bell  v.  Cunningham,  3  Pet.  81 ;  Bigelow  v.  Denison,  23  Vt.  564  ;  Perry 
V.  Hudson,  10  Geo.  362.  Such  ratification  relates  back  to  the  original  transaction. 
Lawrence  v.  Taylor,  5  Hill,  113;  Perry  v.  Hudson,  10  Geo.  362;  Dispatch  Line,  &c.  v. 
Bellamy  Manuf.  Co.  12  N.  H.  205.  A  corporation  is  bound  by  the  ratification  of  an 
agent's  act  in  the  same  manner  as  a  private  individual.  Eleckner  v.  United  States 
Bank,  8  Wheat.  3G3 ;  Moss  v.  Rossie  Lead  Mining  Co.  5  Hill,  137 ;  Conro  v.  Port 
Henry  Iron  Co.  12  Barb.  27 ;  Montgomery  Railroad  Co.  v.  Hurst,  9  Ala.  513 ;  Church 
V.  Ste'riing,  16  Conn.  388;  Melledge  i-.  Boston  Iron  Co.  5  Cush.  175.  The  ratification 
of  the  act  of  an  agent  not  previously  authorized,  must,  in  order  to  bind  the  principal, 
be  made  with  a  full  knowledge  of  all  the  material  facts.  Davidson  v.  Stanley,  2  M.  & 
G.  721  ;  Owings  v.  Hull,  9  Pet.  607;  Robertson  v.  Ketchum,  11  Barb.  652 ; 'Culver  v. 
Ashley,  19  Pick.  300;  Bryant  v.  Moore,  26  Maine,  84;  Johnson  v.  Wingate,  29  id. 
404. 

"  Saunderson  v.  Griffiths,  5  B.  &  C.  909;  Vero  v.  Ashby,  10  id.  288;  Wilson  v. 
Tumman,  6  M.  &  G.  242;  Hull  v.  Pickersgill,  1  B.  &  Bing.  282;  Foster  v.  Bates,  12 
M.  &  W.  233. 

6  Bolton  V.  Hillersden,  1  Ld.  Raym.  224,  225;  Thorold  v.  Smith,  11  Mod.  72 ;  Odiorne 
V.  Maxcy,  13  Mass.  178;  Willinks  v.  Hollingsworth,  6  Wheat.  240,  259;  Forrestier  v. 
Bordman,  1  Story,  43;  Byrne  r.  Doughty,  1.3  Geo.  46. 

'  A  parol  ratification  by  the  principal  of  instruments  under  seal,  which  need  not 
have  been  under  seal,  has  been  held  binding.  Hunter  v.  Parker,  7  M.  &  W.  343 ; 
Dispatch  Line  of  Packets  v.  Bellamy  Manuf.  Co.  12  N.  H.  205 ;  Milton  v.  Mosher,  7 

12* 

■  # 


138  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  X. 

that  another  has  acted  as  his  agent,  does  not  disavow  the  author- 
ity as  soon  as  he  conveniently  can,  but  lies  by  and  permits  a 
person  to  go  on  and  deal  with  the  supposed  agent,  or  to  lose  an 
opportunity  of  indemnifying  himself,  this  is  an  adoption  and 
confirmation  of  the  acts  of  the  agent.^  Nor  can  a  principal  adopt 
a  part,  for  his  benefit,  and  repudiate  the  rest  of  the  supposed 
agency ;  he  must  adopt  the  whole  or  none.^  And  if  an  agent 
makes  a  sale,  and  his  principal  ratifies  the  sale,  he  thereby  ratifies 
the  agent's  representations  made  at  the  time  of  the  sale  and  in 
relation  to  it,  and  is  bound  by  them.^  Nor  can  there  be  a  ratifi- 
cation by  one  party  of  an  act  which  creates  a  duty  on  the  part 
of  another,  or  a  claim  for  damages  against  him ;  as  a  demand 
of  money  or  property  on  which  to  ground  trover*  or  to  defeat  a 
tender.^ 

The  act  of  ratification  must  take  place  at  a  time  and  under 
circumstances  when  the  ratifying  party  might  himself  have  law- 
fully done  the  act  as  principal.^ 

The  whole  subject  of  mercantile  agency  is  influenced  and  gov- 
erned by  mercantile  usage.  Thus,  as  to  the  distinction  between 
factors  and  brokers,  the  law  adopts  a  distinction  usual  among 
merchants,  although  it  may  be  not  always  regarded  by  them. 
A  factor  is  a  mercantile  agent,  for  sales  and  purchases,  who  has 


Met.  244 ;  Worrall  v.  Munn,  1  Selden,  229 ;  Brutton  v.  Burton,  1  Chitty,  707.  See 
Banorgee  v.  Hovey,  5  Mass.  11,  24.  But,  in  general,  an  unauthorized  instrument  under 
seal,  entered  into  by  one  as  agent  for  another,  can  be  ratified  only  by  an  instrument 
under  seal.  Steiglitz  v.  Egginton,  Holt,  N.  P.  141  ;  Hunter  v.  Parker,  7  M.  &  W. 
322;  Hanford  v.  McNair,  9  Wend.  54;  Blood  v.  Goodrich,  12  id.  525,  9  id.  68;  Stet- 
son V.  Patten,  2  Greenl.  358. 

1  Walsh  V.  Pierce,  12  Vt.  1 30  ;  Brcdin  v.  Dubarry,  14  S.  &  R.  27 ;  Brigham  v.  Peters, 
1  Gray,  139;  Amory  v.  Hamilton,  17  Mass.  103;  Johnson  v.  Jones,  4  Barb.  369;  Fitz- 
simmons  v.  Joslin,  21  Vt.  129;  Owslev  v.  Woolhopter,  14  Geo.  124;  Perry  v.  Hudson, 
10  Geo.  362 ;  Davidson  v.  Stanley,  2  M.  &  G.  721  ;  Pott  v.  Bevan,  1  C.  &  K.  335. 

2  Wilson  V.  Poulter,  2  Stra.  859;  Smith  v.  Hodson,  4  T.  R.  211  ;  Hovil  v.  Pack,  7 
East,  164 ;  Brewer  v.  Sparrow,  7  B.  &  Cr.  310;  Newell  v.  Hurlburt,  2  Vt.  351  ;  Benedict 
V.  Smith,  10  Paige,  126;  Moss  v.  Rossie  Lead  Mining  Co.  5  Hill,  137;  Corning  v. 
Southland,  3  Hill,  552 ;  Crawford  v.  Barkley,  18  Ala.  270;  Hodnctt  v.  Tatum,  9  Geo. 
70;  Beckwith  v.  Baxter,  3  N.  H.  67. 

^  Doggett  V.  Emerson,  3  Story,  700, 

*  Solomons  v.  Dawes,  1  Esp.  S3. 

^  Cooke  V.  Callaway,  1  Esp.  115  ;  Coles  v.  Bell,  1  Campb.  478,  note.  So,  a  notice  to 
quit,  given  by  an  unauthorized  agent,  cannot  be  made  good  by  the  ratification  of  the 
principal  after  the  proper  time  for  giving  it,  the  agent  having  acted  in  his  own  name  in 
giving  the  notice;  nor,  it  seems,  if  he  acted  in  the  name  of  the  principal.  Right  v. 
Cuthell,  5  East,  491 ;  Doe  dcm.  Mann  v.  Walters,  10  B.  &  Cr.  626 ;  Doe  v.  Goldwin,  2 
Q.  B.  143. 

"  Thus,  it  was  held  that,  where  an  unauthorized  agent  stopped  goods  in  transitu,  his 
act  could  not  be  rendered  effectual  to  defeat  the  consignee's  title  by  the  consignor's 
ratification  of  the  act  after  the  imnsitus  was  ended.    Bird  v.  Brown,  14  Jurist,  132. 


CH.  X.]  AGENCY.  139 

possession  of  the  goods ;  a  broker  is  such  agent,  but  without  pos- 
session of  the  goodsJ  Hence,  a  factor  may  act  for  his'principal, 
but  in  his  own  name,  because  the  actual  owner,  by  delivering  to 
him  the  goods,  gives  to  him  the  appearance  of  an  owner;  but  a 
broker  must  act  only  in  the  name  of  his  principal.^  And  a  pur- 
chaser from  a  factor  jnay  set  off  a  debt  due  from  the  factor,  un- 
less he  buys  the  goods  knowing  that  they  are  another's,  and 
perhaps  even  then ;  not  so,  if  the  purchaser  buy  from  a  broker.^ 
Again,  a  factor  has  a  lien  on  the  goods  for  his  claims  against  his 
principal;'^  but  a  broker  generally  has  not.^  One  may  be  a 
factor  as  to  all  rights  and  duties,  who  is  called  a  broker ;  as  an 
exchange-broker,  who  has  notes  for  sale  on  discount,  certificates 
of  stock,  &c.,  delivered  into  his  possession.'^ 

A  cashier  of  a  bank,  or  other  official  person,  may  be  an  agent 
for  those  whose  officer  he  is,  or  for  others  who  employ  him.  He 
has,  without  especial  gift,  all  the  authority  necessary  or  usual  to 
the  transaction  of  his  business.""     But  he  cannot  bind  his  em- 

1  Parsons  on  Contracts,  p.  78. 

^  "  The  distinction  between  a  broker  and  factor  is  not  merely  nominal,  for  they  differ 
in  many  important  particulars.  A  factor  is  a  person  to  whom  goods  are  consigned  for 
sale  by  a  merchant,  residing  abroad,  or  at  a  distance  from  the  place  of  sale,  and  he 
usually  sells  in  his  own  name,  witliout  disclosing  that  of  his  principal ;  the  latter,  there- 
fore, with  full  knowledge  of  these  circumstances,  trusts  him  with  the  actual  possession 
of  the  goods,  and  gives  him  authority  to  sell  in  his  own  name.  But  the  broker  is  in  a 
different  situation  ;  he  is  not  trusted  with  the  possession  of  the  goods,  and  he  ought  not 
to  sell  in  his  own  name.  The  principal,  therefore,  Avho  trusts  a  broker,  has  a  right  to 
expect  that  he  will  not  sell  in  his  own  name."  Per  Abbott,  C.  J.,  in  Baring  v.  Corrie,  2 
B.  &  Aid.  137,  143. 

3  Baring  v.  Corrie,  2  B.  &  Aid.  137, 143  ;  Lime  Rock  Bank  v.  Plimpton,  17  Pick.  159. 

*  Drinkwater  v.  Goodwin,  Cow.  251  ;  Hudson  v.  Granger,  5  B.  &  Aid.  27  ;  Stevens 
V.  Robins,  12  Mass.  180 ;  Williams  v.  Littlcfield,  12  Wend.  362  ;  Holbrook  v.  Wight, 
24  Wend.  169;  Marficld  v.  Douglass,  1  Sandf  360;  Jordan  v.  James,  5  Hammond, 
(Ohio,)  88.  The  factor  has  a  general  lien  to  secure  all  advances  and  liabilities.  Cowell 
V.  Simpson,  16  Ves.  275;  Stevens  v.  Robins,  12  Mass.  180;  Bryce  v.  Brooks,  26 
Wend.  367  ;  Knapp  v.  Alvord,  10  Paige,  205.  See  Winter  v.  Coit,  3  Selden,  288: 
Dixon  V.  Stansfeld,  10  C.  B.  398. 

^  But  insurance  brokers  have  a  general  lien  on  policies  of  insurance  procured  by 
them,  and  the  amounts  collected  under  them.  Castling  v.  Aubert,  2  East,  325;  Mann 
V.  Shiffner,  2  id.  523  ;  Spring  v.  South  Carolina  Ins.  Co.  8  Wheat.  268,  275  ;  Moody  v. 
Webster,  3  Pick.  424 ;  Cranston  v.  Philadelphia  Ins.  Co.  5  Biuney,  538. 

6  1  Bell's  Comm.  (5th  cd.)  p.  483.  So,  where  the  broker  has  made  advances  or 
guaranteed  the  sale.  Grove  v.  Dubois,  1  T.  R.  112;  Atkvns  v.  Amber,  2  Esp.  493; 
Buckbee  v.  Brown,.  21  Wend.  115;  White  v.  Chouteau,  10  Bavh.  202. 

7  Minor  v.  The  Mechanics'  Bank  of  Alexandria,  1  Pet.  70 ;  Frankfort  Bank  v.  John- 
son, 24  Maine,  490;  Lloyd  v.  West  Branch  Bank,  15  Penn.  St.  172.  The  cashier  of  _a 
bank  has  prima  facie  authority  to  indorse,  on  behalf  of  the  bank,  the  negotiable  securi- 
ties held  by  it.  Wild  v.  The  Bank  of  Passamaquoddy,  3  Mason,  505;  Fleckner  v.  The 
United  States  Bank,  8  Wheat.  360;  Mechanics'  Bank  v.  The  Bank  of  Columbia,  5  id. 
326;  Lafayette  Bank  v.  State  Bank  of  Illinois,  4  McLean,  208;  Folger  v.  Chase,  18 
Pick.  63.  The  same  power  belongs  to  the  general  agent^  or  treasurer  of  a  corporation 
or  joint-stock  company.  Perkins  v.  Bradley,  24  Vt.  (j6.  So,  an  indorsement  of  a 
promissory  note  or  bill  of  exchange  by  the  president  of  a  bank,  pursuant  to  authority 


140  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 

ployers  by  any  unusual  or  illegal  contract  made  with  their  cus- 
tomers.' Nor  would  his  acts  or  permissions  have  any  validity  if 
they  violate  his  official  duties,  and  are  certainly  and  obviously 
beyond  his  power,  even  if  sanctioned  by  his  directors ;  as  if  the 
cashier  of  a  bank  permitted  overdrawing  or  the  like.  And  all 
parties  who  deal  with  such  agent  in  such  a  transaction,  would 
be  affected  by  their  knowledge  or  notice  of  his  want  of  authority, 
whether  that  knowledge  was  actual,  or  constructive  only  and  im- 
plied by  law.  And  the  general  agent  of  a  corporation,  clothed 
with  a  certain  power  by  the  charter  or  the  lawful  acts  of  the 
corporation,  may  use  that  power  for  an  authorized  or  even  a  pro- 
hibited purpose  in  his  dealings  with  an  innocent  third  party,  and 
render  the  corporation  liable  for  his  acts.^ 


SECTION-  in. 


EXTENT  AND  DURATION  OF  AUTHORITT. 

A  general  authority  may  continue  to  bind  a  principal  after  its 
actual  revocation,  if  the  agency  were  known  and  the  revocation 
be  wholly  unknown  to  the  party  dealing  with  the  agent,  without 
his  fault.^ 

An  authority  to  sell  implies  an  authority  to  sell  on  credit,  if 

conferred  by  the  directors,  will  pass  the  property  in  the  same.  Spear  v.  Ladd,  11 
Mass.  94 ;  Northampton  Bank  v.  Pepoon,  id.  288 ;  Merrick  v.  The  Bank  of  the  Metro- 
polis, 8  Gill,  59;  Stevens  v.  Hill,  29  Maine,  133. 

1  An  agreement  by  the  president  and  cashier  of  the  Bank  of  the  United  States,  that 
the  indorser  of  a  promissory  note  should  not  be  liable  on  his  indorsement,  was  held  not 
to  bind  the  bank.  Bank  of  United  States  v.  Dunn,  6  Pet.  51.  Nor  has  he  authority  to 
bind  the  bank  by  declarations,-  beyond  the  scope  of  his  ordinary  duties.  Merchants' 
Bank  v.  Marine  Bank,  3  Gill,  96  ;  Bank  of  Metropolis  v.  Jones,  8  Pet.  12 ;  Salem  Bank 
V.  Gloucester  Bank,  17  Mass.  1.  Nor  can  he  accept  bills  of  exchange  on  behalf  of  the 
bank,  for  the  accommodation  of  the  drawers  merely ;  and  the  holder,  with  notice  of 
such  acceptance,  cannot  recover  against  the  bank.  Farmers'  and  Mechanics'  Bank  v. 
The  Troy  City  Bank,  1  Doug.  (Mich.)  457. 

2  The  general  agent  of  a  corporation,  clothed  with  a  certain  power  by  its  charter, 
and  using  that  power  for  an  unauthorized  or  prohibited  purpose  in  dealings  with  an 
innocent  third  party,  may  render  the  corporation  liable ;  but  if  such  agent  has  no  such 
power,  he  cannot  bind  the  corporation  by  its  exercise.  All  parties  who  deal  with  him 
are  aifected  with  knowledge  or  notice  of  his  want  of  authority,  whether  the  same  be 
actual,  or  constructive  and  implied  by  law.  •  Life  and  Fire  Ins.  Co.  v.  Mechanics'  Fire 
Ins.  Co.  7  Wend.  31  ;  Hood  v.  New  York  and  New  Haven  R.  R.  Co.  22  Conn.  502; 
Goodspced  u.  East  Haddam  Bank,  22  Conn.  530;  Frankfort  Bank  v.  Johnson,  24 
Maine,  490;  Bank  of  Kentucky  v.  Schuylkill  Bank,  1  Parson's  Sel.  Cas.  180. 

3  Trueman  v.  Loder,  11  A. '&  E.  589;  Beard  v.  Kirk,  11  N.  H.  398;  Lightbody  v. 
North  American  Ins.  Co.  23  Wend.  18;  Morgan  v.  Stcll,  5  Biun.  316. 


CH.  X.]  AaENCY.  141 

that  be  usual ;  otherwise  not ;  ^  and  if  an  agent  sells  on  credit 
without  any  authority,  or  by  exceeding  his  authority,  the  princi- 
pal may  reclaim  his  goods  from  the  purchaser,^  or  hold  the  agent 
responsible  for  their  price.^  And  the  agent  is  generally  respon- 
sible if  he  blends  the  goods  of  his  principal  with  his  own,  in  such 
a  manner  as  to  confuse  them  together,  or  takes  a  note  payable  to 
himself,  unless  this  be  authorized  by  the  usage  of  the  trade.* 
And  if  the  agent  (or  factor)  takes  a  fiote  payable  to  himself,  and 
becomes  bankrupt,  such  note  belongs  to  his  principal,  and  not  to 
the  agent's  assignees.^  In  our  view  of  the  law,  a  power  to  sell 
gives  a  power  to  warrant,  where  there  is  a  distinct  usage  of 
making  such  sales  with  warranty,  and  the  want  of  authority  to 
warrant  is  unknown  to  the  purchaser  without  his  fault;  and  not 
otherwise.^     A  general  authority  to  sell  goods  carries  with  it  an 

1  Anonymous,  12  Modern,  514 ;  Scott  v.  Surman,  "Willes,  406,  407  ;  Houghton  v. 
Matthews,  3  Bos.  &  Pull.  489;  M'Kinstry  v.  Pearsall,  3  Johns.  319;  Van  Alen  y. 
Vanderpool,  6  Johns.  69;  Delafield  v.  Illinois,  26  Wend.  223;  Laussatt  v.  Lippincott, 
6  S.  &  R.  386;  Greely  v.  Bartlett,  1  Greenl.  172;  Goodenow  v.  Tyler,  7  Mass.  36; 
Hapgood  V.  Batcheller,  4  Met.  573  ;  Forrestier  v.  Bordman,  1  Story,  43  ;  Gerbier  v. 
Emery,  2  Wash.  C.  C  413.  But  an  auctioneer  cannot  sell  on  credit.  3  Chitty  on 
Com. 'and  Manuf.  218.  Nor  a  broker  employed  to  sell  stock.  AViltshire  v.  Sims,_  1 
Campb.  258.  An  agent  for  a  State,  who  is  authorized  to  raise  money  on  a  sale  of  its 
stocks,  cannot,  without  express  authority  from  the  State,  sell  such  stocks  on  credit. 
State  of  Illinois  v.  Delafield,  8  Paige,  527,  2  Hill,  159,  26  Wend.  192.  And  an  author- 
it}'  to  sell  on  credit  in  the  principal's  name,  does  not  confer  an  authority  to  collect  the 
debts  by  suit.  Soule  ;;.  Dougherty,  24  Vt.  92.  An  authority  to  make  a  contract  in- 
volves an  authority  to  rescind  it.  with  the  consent  of  the  other  partv.  Anderson  v. 
Coonley,  21  Wend.  279  ;  Scott  v.  Wells,  6  W.  &  S.  357. 

"  Anonymous,  12  Mod.  514  ;  Paley  on  Agency,  by  Lloyd,  (3d  Am.  ed.)  p.  212.  See 
The  State  of  Illinois  v.  Delafield,  8  Paige,  527,  2  Hill,  159,  26  Wend.  192;  Robertson 
I'.  Ketchum,  11  Barb.  652;  Peters  v.  Ballistier,  3  Pick.  495;  Parsons  v.  Webb,  8 
Greenl.  38. 

3  Walker  v.  Smith,  4  Dall.  389  ;  Barksdale  v.  Brown,  1  Nott  &  McCord,  517. 

*  The  taking  of  a  note  by  the  agent,  on  a  sale  of  the  principal's  goods,  payable  to 
himself,  does  not  per  se  render  the  agent  responsible  to  his  principal  in  case  of  the  pur- 
chaser's insolvency.  If  such  is  the  usage  of  trade,  the  agent  is  not  personally  respon- 
sible.    Goodenow  v.  Tyler,  7  Mass.  36. 

'  Messier  r.  Amery,  1  Yeates,  540  ;  Scott  r.  Surman,  Willes,  400.  Where  the  agent 
sells  goods  belonging  to  several  principals,  and  takes  from  the  vendee  a  note  which  in- 
cludes the  purchase-money  of  the  whole,  payable  to  himself,  he  is  not  thereby  made 
liable  to  his  principals  for  the  debt.  Corlies  v.  Gumming,  6  Cow.  181.  But  where  the 
agent  sells  his  own  goods  and  those  of  his  principal,  and  takes  in  payment  of  both  the 
promissory  note  of  a  third  person,  payable  to  himself,  he  makes  himself  personally 
responsible  to  his  principal.  Symington  v.  M'Lin,  1  Dev.  &  Bat.  291  ;  Jackson  v. 
Baker,  1  Wash.  C.  C.  394  ;  Brown  v.  Arrott,  6  Watts  &  Serg.  402.  It  is  held  that,  if 
an  agent,  at  the  expiration  of  the  credit  given  at  a  sale,  takes  a  note  payable  on  a  fur- 
ther day  to  himself,  he  makes  the  debt  his  own.  Hosmer  v.  Beebe,  14  Martin,  368.  A 
factor  who  sells  his  principal's 'goods  consigned  to  him  for  that  purpose,  and  takes  the 
notes  of  the  vendee,  which  he  afterwards  has  discounted  for  his  own  accommodation, 
becomes  responsible  for  the  amount  of  the  sales  in  the  event  of  the  purchaser's  insol- 
vency.    Myers  v.  Entriken,  6  Watts  &  Serg.  44.     See  Wren  v.  Kirton,  11  Ves.  382. 

•^  An  agent  to  sell  a  horse,  may  warrant  him.  Alexander  v.  Gibson,  2  Campb.  555; 
Helyear  v.  Hawke,  5  Esp.  72,  75 ;  Pickering  v.  Busk,  15  East,  45  ;  Skinner  v.  Gunn,  9 
Porter,  305  ;  Bradford  v.  Bush,  10  Ala.  386  ;  Peters  v.  Farnsworth,  15  Vt.  159.    The 


142  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 

authority  to  sell  by  sample.^  General  authority  to  transact  busi- 
ness, or  even  to  receive  and  discharge  debts,  does  not  enable  an 
agent  to  accept  or  indorse  bills  or  notes,  so  as  to  charge  his 
principal.^  Indeed,  special  authorities  to  indorse  are  construed 
strictly.^  Bat  this  authority  may  be  implied  from  circumstances 
or  from  the  usage  of  the  agent  recognized  and  sanctioned  by  the 
principal.*  An  agent  to  receive  cash,  has  no  authority  to  take 
bills  or  notes,  except  bank-notes;^ 

If  an  agent  sells,  and  makes  a  material  representation  which 
he  believes  to  be  true,  and  the  principal  knows  it  to  be  false  and 

distinction  has  been  taken  that  a  servant,  with  authority  to  sell  a  horse,  and  forbidden 
to  warrant  him,  may  bind  his  master  by  a  warranty ;  but  a  stranger,  with  tlie  same 
authority  and  restriction,  cannot  bind  bis  princi])al  by  a  warranty.  Fenn  v.  Harrison, 
3  T.  K.  760,  per  Ashliurst,  J. ;  Pickering  v.  Busk,  15  East,  45.  In  this  last  case,  Bai/- 
ley,  J.,  said  :  "  If  the  servant  of  a  horse  dealer,  with  express  directions  not  to  warrant, 
do  warrant,  the  master  is  bound ;  because  the  servant,  having  a  general  authority  to 
sell,  is  in  a  condition  to  warrant,  and  the  master  has  not  notified  to  the  world  that  the 
general  authority  is  circumscribed."  See  Seignior  and  Wolmer's  case,  Godbolt,  360. 
So,  it  has  been  held,  as  to  other  articles  of  personal  property,  that  the  power  to  sell  car- 
ries with  it  the  power  to  warrant  their  condition  and  quality.  Williamson  v.  Cana-^ 
day,  3  Iredell,  349;  Hunter  v.  Jameson,  6  Iredell,  252;  Woodford  v.  McClenahan,  4* 
Gilm.  85 ;  Nelson  v.  Cowing,  6  Hill,  336.  Where  an  authority  to  warrant  is  implied 
from  an  authority  to  sell,  it  is,  in  general  at  least,  limited  to  the  present  state  and  qual- 
ity of  the  thing  sold,  and  does  not  extend  to  the  future ;  as,  that  goods  sold  for  a  dis- 
tant voyage,  shall  not  deteriorate  during  that  voyage.  Upton  v.  Suffolk  County  Mills, 
S.  J.  C.  Mass.  Nov.  T.  1853.  In  Gibson  v.  Colt,  7  Johns.  390,  it  was  held  that  a  special 
agent  cannot  bind  his  master  by  an  unauthorized  warranty.  But  the  decision  in  this 
case  has  been  disapproved.  See  Jeffrey  v.  Bigclow,  13  Wend.  521  ;  Sandford  v.  Handy, 
23  Wend.  260  ;  Nelson  v.  Cowing,  supra:  Bryant  v.  Moore,  26  Maine,  84.  A  warranty 
by  a  person  merely  intrusted  to  deliver  goods,  does  not  bind  the  owner.  Woodin  v. 
Burford,  2  Cromp.  &  Meeson,  391,  4  Tyrwh.  264.  The  warranty  of  the  agent,  to  bind 
the  principal,  must  be  made  at  the  time  of  the  sale.  Alexander  v.  Gibson,  2  Campb. 
555  ;  Ilelyear  v.  Hawke,  5  Esp.  72. 

1  Andrews  v.  Kneeland,  6  Cow.  354. 

2  Gardner  v.  Baillie,  6  T.  K.  591  ;  Kilgour  v.  Finlyson,  1  H.  Bl.  153;  Hogg  v. 
Snaith,  1  Taunt.  347 :  Murray  v.  The  East  India  Company,  5  B.  &  Aid.  204,  210,  211 ; 
Esdaile  v.  La  Nauze,  1  You.  &  Col.  394  ;  Eossiter  v,  Rossiter,  8  W^end.  494 ;  Paige  v. 
Stone,  10  Met.  160.  See  Valentine  v.  Packer,  5  Penn.  St.  333.  But  see  Howard  v. 
Baillie,  2  H.  Bl.  618;  Layet  v.  Gano,  17  Ohio,  466.  An  authority  to  get  a  bill  dis- 
counted does  not  give  authority  to  indorse  it,  so  as  to  bind  the  owner.  Eenn  v.  Harri- 
son, 3  T.  R.  757. 

^  A  power  to  accept  bills  for  a  party  and  on  his  behalf,  does  not  authorize  the  attor- 
ney to  accept  bills  drawn  on  account  of  his  principal's  business  as  a  partner.  Attwood 
V.  Munnings,  7  B.  «&  C.  278.  An  authority  to  draw  is  not  an  authority  to  indorse. 
Robinson  v.  Yarrow,  7  Taunt.  455.  Where  A  authorized  B  to  sign  his  name  to  a  note 
for  $250,  payable  in  six  months,  and  B  put  A's  name  to  a  note  for  that  sum,  payable  in 
sixty  days,  it  was  held  that  A  was  not  liable.  Batty  v.  Carswell,  2  Johns.  48.  An  , 
authority  to  indorse  notes,  it  seems,  does  not  include  an  authority  to  receive  notice  of 
their  dishonor.     Bank  of  Mobile  v.  King,  9  Ala.  279. 

*  Thus,  where  a  confidential  clerk  had  been  accustomed  to  draw,  and  the  master  had 
in  one  instance  authorized  him  to  indorse,  and  on  two  other  occasions  had  received 
money  obtained  by  his  indorsement,  it  was  held  that  a  jury  might  infer  a  genei'al 
authority  to  indorse.     Prescott  v.  Flinn,  9  Bing.  19. 

^  Sykes  v.  Giles,  5  M.  &  W.  645. 


CH.  X.]  AGENCY.  143 

does  not  correct  it,  this  is  the  fraud  of  the  principal  and  avoids 
the  sale.i 

If  an  agency  be  justly  implied  from  general  employment,  it 
may  continue  so  far  as  to  bind  the  principal  after  his  withdrawal 
of  the  authority,  if  that  withdrawal  be  not  made  known  in  such 
way  as  is  usual  or  proper,  to  all  who  deal  with  the  agent  as 
such. 2 

Revocation,  generally,  is  always  in  the  power  and  at  the  will 
of  the  principal,  and  his  death  operates  of  itself  a  revocation.^ 
But  the  death  of  an  agent  does  not  revoke  the  authority  of  a 
sub-agent  appointed  by  the.  agent  under  an  authority  given  him 
by  the  principal.^  If  the  power  be  coupled  with  an  interest,  or 
given  for  a  valuable  consideration  ;  and  if  the  continuance  of  the 
power  is  requisite  to  make  the  interest  available,  then  it  cannot 
be  revoked  at  the  pleasure  of  the  principal.^  Marriage  of  the 
principal,  if  a  feme  sole,  revokes  a  revocable  authority  given  by 
her.*5 

If  an  agent  to  whom  commercial  paper  is  given  for  collection, 
be  in  fault  towards  his  principal,  the  measure  of  his  responsibility 

1  Schneider  u.  Heath,  3  Campb.  505;  Cornfoot  v.  Fowke,  6  M.  &  W.  358;  Wilson 
V.  Fuller,  3  Q.  B.  58,  68,  1009;  Fitzsimmons  v.  Joslin,  21  Vt.  129. 

2  Monk  V.  Clayton,  cited  in  10  Mod.  110;  v.  Harrison,  12  Mod.  346;  Salte  v. 

Field,  5  T.  K.  214,  per  Buller,  J. ;  Spencer  v.  Wilson,  4  Munf.  130;  Morgan  v.  Siell,  5 
Binn.  305;  Bowerbank  v.  Morris,  Wallace,  126. 

3  Co.  Litt.  52,  (b)  ;  Bac.  Abr.  Authorit)',  (E):  Shipman  v.  Thompson,  Willes,  104, 
note;  King  v.  The  Corporation  of  the  Bedford  Level,  6  East,  356;  Wallace  v.  Cook, 
5  Esp.  117;  Smout  v.  Ilbery,  10  M.  &  W.  1  ;  Harper  v.  Little,  2  Greenl.  14;  Gale  v. 
Tappan,  12  N.  H.  145;  Mcbonald  v.  Black,  20  Ohio,  185 ;  Gleason  v.  Dodd,  4  Met. 
333;  Huston  v.  Cantrill,  11  Leigh,  136.  And  death  operates  as  a  revocation  even 
before  notice  thereo'f  communicated  to  the  agent.  Gait  v.  Galloway,  4  Pet.  344  ; 
Jenkins  i'.  Atkins,  1  Humph.  294.  But  see  Cassiday  v.  M'Kenzie,  4  W.  &  S.  282.  If 
two  give  a  warrant  of  attorney  to  confess  judgment  against  them,  and  one  dies,  judg- 
ment cannot  be  entered  against  the  other.  Raw  v.  Aklerson,  7  Taunt.  453  ;  Hunt  v. 
Chamberlin,3  Halst.  336.  A  power  of  attorney  by  deed  may  be  terminated  by  a  parol 
revocation.  Brookshire  v.  Brookshire,  8  Iredell,  74.  But  if  the  power  be  left  in  the 
agent's  hands,  he  may  bind  the  principal  by  his  dealings  with  third  parties,  on  faith  of 
it,  who  arc  ignorant  of  the  revocation.     Beard  v.  Kirk,  11  N.  H.  397. 

*  Smith  V.  White,  5  Dana,  383. 

^  "Where  an  agreement  is  entered  into  on  a  sufficient  consideration,  whereby  an 
authority  is  given  for  the  purpose  of  securing  some  benefit,  such  an  authority  is  irre- 
vocable. This  is  what  is  usually  meant  by  an  authority  coupled  with  an  interest,  and 
which  is  commonly  said  to  be  irrevocable."  Per  Wilde,  C.  J.,  in  Smart  v.  Sandars,  5 
C.  B.  917.  So,  Lord  Kenyan  held  that  a  power  of  attorney  given  as  part  of  a  security 
for  money,  was  not  revocable.  Walsh  v.  Whitcomb,  2  Esp.  565.  And  where  A,  being 
indebted  to  B,  in  order  to  discharge  the  debt,  executed  to  B  a  power  of  attorney 
authorizing  him  to  sell  certain  lands  belonging  to  A,  this  was  held  to  be  an  authority 
coupled  with  an  interest,  and  not  revocable.  Gaussen  v.  Morton,  10  B.  &  C.  731.  See 
further,  1  Parsons  on  Cont.  p.  58,  n.  (h),  and  p.  61,  n.  (m.) 

•5  2  Kent's  Com.  645  ;  Anonymous,  W.  Jones,  388 ;  Charnley  v.  Winstanley,  5  East, 
266. 


144  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  X. 

is  the  damage  actually  sustained  by  his  principal.^  He  must 
give  notice  of  the  dishonor  of  such  paper  to  his  principal,  who 
must  notify  the  indorsers  ;  and  the  agent  need  not  notify  the 
indorsers.2 

If  a  bank  receive  notes  or  bills  for  collection,  although  charging 
no  commission,  the  possible  use  of  the  money  is  consideration 
enough  to  make  them  liable  as  agents  for  compensation ;  that  is, 
liable  for  any  want  of  due  and  legal  diligence  and  care/^  But, 
by  the  prevailing,  though  certainly  not  uniform  authority,  if  the 
bank  exercise  proper  skill  and  care  in  the  choice  of  a  collecting 
agent,  or  of  a  notary  or  other  person  or  officer,  to  do  what  may 
be  necessary  in  relation  to  the  paper  committed  to  them,  the 
bank  is  not  liable  for  his  want  of  care  or  skill.^ 

In  general,  an  exigency  or  even  necessity  which  would  make 
an  extension  of  the  power  of  an  agent  very  useful  to  his  em- 
ployer, will  not  give  that  extension.  A  master  of  a  ship,  however, 
may  sell  it,  in  case  of  necessity,  or  pledge  it  by  bottomry,  to  raise 
money.  But  this  is  a  peculiar  effect  of  the  law-merchant,  and 
no  such  general  rule  applies  to  ordinary  agencies.^ 

'  Allen  V.  Suydara,  20  Wend.  321  ;  Hoard  v.  Garner,  3  Sandf.  179 ;  Arrott  v.  Brown, 
6  Whart.  9.     See  Harvey  v.  Turner,  4  llawle,  223. 

2  Mead  v.  Engs,  5  Cow.  303 ;  Howard  v.  Ives,  1  Hill,  263 ;  Bank  of  the  United 
States  V.  Davis,  2  id.  451 ;  Colt  v.  Noble,  5  Mass.  167;  Church  v.  Barlow,  9  Pick.  547; 
Lawson  v.  The  Farmers'  Bank  of  Salem,  1  Ohio  St.  221. 

3  Smedes  v.  Utica  Bank,  20  Johns.  372,  3  Cow.  663 ;  McKinster  v.  The  Bank  of 
Utica,  9  Wend.  46,  11  id.  473;  Mechanics'  Bank  v.  Merchants'  Bank,  6  Met.  13;  Win- 
gate  V.  Mechanics'  Bank,  10  Penn.  St.  104. 

*  Bellemire  v.  Bank  of  United  States,  4  Whart.  105.  A  bank,  receiving  bills  and 
notes  for  collection  payable  at  another  place,  and  transmitting  the  same  according  to 
usage,  to  a  suitable  bank  or  other  agent  at  the  place  of  payment  for  that  purpose,  is  not 
responsible  to  the  owner  thereof  for  the  default  of  such  bank  or  ageiTt.  Jackson  v. 
Union  Bank,  6  Harris.  &  Johns.  146;  East  Haddam  Bank  v.  Scovil,  12  Conn.  303; 
Wingate  v.  Mechanics'  Bank,  10  Penn.  St.  104;  Fabens  v.  Mercantile  Bank,  23  Pick. 
330;  Dorchester  and  Milton  Bank  v.  New  England  Bank,  I  Cush.  177;  Warren  Bank 
V.  Suffolk  Bank,  S.  J.  C.  Mass,  Suffolk,  March  T.  1853.  So,  it  was  held  by  the  Su- 
preme Court  of  New  York,  in  Allen  v.  Merchants'  Bank,  15  Wend.  482,  which  decision 
was  reversed  by  the  Court  of  Errors  by  a  vote  of  14  to  10,  Chancellor  Wcilivorth  deliv- 
ering an  opinion  in  favor  of  affirming  the  judgment  of  the  Supreme  Court.  22  Wend. 
215.  This  decision  of  the  Court  of  Errors  is  regarded  as  having  settled  the  law  for 
New  York.  See  Hoard  v.  Garner,  3  Sandf.  179;  The  Montgomery  County  Bank  v. 
The  Albany  City  Bank,  8  Barb.  396,  3  Selden,  459. 

^  Thus,  where  no  authority  is  given  to  an  agent  to  borrow  money,  he  cannot  borrow 
in  case  of  an  emergency.  Hawtayne  v.  Bourne,  7  M.  &  W.  595  ;  Chapman  v.  Morton, 
11  id.  534.  Masters  of  vessels  are  justified  in  departing  from  precise  instructions,  if  an 
unforeseen  emergency  arises,  and  they  act  in  good  faith  and  for  the  obvious  and  certain 
advantage  of  their  principal.  Judson  i'.  Sturges,  5  Day,  556 ;  Drummond  v.  Wood,  2 
Caines,  310;  Liotard  v.  Graves,  3  Caines,  226  ;  Lawlcr  v.  Keaquick,  1  Johns.  Cas.  174; 
Stainbank  v.  Shepard,  20  Eng.  Law  and  Eq.  547  ;  Forrestier  i'.  Bordman,  1  Story,  34; 
Gould  V.  Rich,  7  Met.  556.     See  post,  the  chapter  on  the  law  of  shipping. 


CH.  X.]  AGENCY.  145 


SECTION  IV. 


OF  THE  EXECUTIOX  OF  AUTHORITY. 


Generally,  an  authority  must  be  conformed  to  with  great 
strictness  and  accuracy;  otherwise,  the  principal  will  not.be 
bound,  although  the  agent  may  be  bound  personally.^  Thus,  if 
A,  the  agent  of  B,  signs  "A  for  B,"  it  has  been  said  that  this  is 
not  the  act  of  B,  but  of  A  for  him.  But  if  he  signs  "  B  by  A," 
this  is  the  act  of  B  by  his  instrument  A.  This  strictness  is  now 
abated  considerably ;  and,  whatever  be  the  form  or  manner  of  the 
signature  of  a  simple  contract,  it  will  be  held  to  bind  the  princi- 
pal, if  that  were  the  certain  and  obvious  intent.^  In  the  case  of 
sealed  instruments,  it  would  seem  that  the  ancient  severity  is 
more  strictly  maintained,^  That  the  authority  must  be  con- 
formed to  with  strict  accuracy,  in  all  matters  of  substance,  is 
quite  certain ;  but  the  whole  instrument  will  be  considered,  in 
order  to  ascertain  the  intention  of  the  parties  and  the  extent  of 

1  Nixon  V.  Hyserott,  5  Johns.  58 ;  North  River  Bank  v.  Aymar,  3  Hill,  262.  Thus, 
where  A  authorized  B  to  sign  his  name  to  a  note  for  S250  payable  in  six  months,  and 
B  put  A's  name  to  a  note  for  that  sum  payable  in  sixty  days,  it  was  held  that  A  was 
not  liable.  Batty  v.  Carswell,  2  Johns.  48.  And  see  Andrews  v.  Kneeland,  6  Cow. 
357;  Moody  v.  Threlkeld,  13  Geo.  55;  Gordon  v.  Buchanan,  5  Yerg.  71.  Where  the 
agent  completely  executes  his  authority  and  goes  beyond  it,  and  the  excess  can  be 
rejected,  it  seems  that  his  principal  will  be  bound  to  the  extent  of  the  authority  con- 
ferred. Co.  Litt.  258,  (a) ;  Alexander  v.  Alexander,  2  Ves.  Sen.  644;  1  Livermore  on 
Agency,  pp.  98-101.  So,  where  the  nature  of  the  agency  authorizes  the  agent  to  at- 
tempt its  execution  in  part,  and  having  done  this,  he  is  unable  to  complete  it,  the  prin- 
cipal will  be  bound.  Gordon  v.  Buchanan,  5  Yerg.  81  ;  Johnson  v.  Blasdale,  1  Sm.  & 
Marsh.  1 ;  1  Livermore  on  Agency,  99. 

2  See  Mechanics'  Bank  v.  The  Bank  of  Columbia,  5  Wheat.  326,  337  ;  Long  v.  Col- 
burn,  11  Mass.  97;  Wilks  v.  Back,  2  East,  142  ;  Beckham  v.  Drake,  9  M.  &  W.  79.  It 
is  now  well  settled  that  a  deed  purporting  to  be  the  deed  of  A,  and  executed  "B  for 
A,"  is  well  executed  as  the  deed  of  A,  if  B  was  duly  authorized  to  execute  it.  Wilks 
r.  Back,  2  East,  142 ;  Hunter  v.  Miller,  6  B.  Mon.  612  ;  Wilburn  v.  Larkin,  3  Blackf. 
55 ;  Mussey  v.  Scott,  7  Cush.  215;  Hale  v.  Woods,  10  N.  H.  470. 

3  Bac.  Abr.  Leases,  (I,  10.)  Clarke  v.  Courtney,  5  Pet.  319,  350  ;  Bogart  v.  De 
Bussy,  6  Johns.  94;  Townsend  v.  Corning,  23  Wend.  435  ;  Elwell  v.  Shaw,  16  Mass.  42; 
Brinley  v.  Mann,  2  Cush.  337 ;  Abbey  v.  Chase,  6  id.  54.  The  opinion  was  intimated 
in  Wood  V.  Goodridge,  6  Cush.  117,  that  the  signing  by  an  attorney  of  the  name  of  his 
principal  to  an  instrument,  which  contains  nothing  to  indicate  that  it  is  executed  by  at- 
torney, and  without  adding  his  own  signature  as  such,  is  not  a  valid  execution.  But  it 
was  held,  in  Morse  v.  Green,  13  N.  H.  32,  that,  where  a  party  has  authorized  another 
to  subscribe  his  name  to  a  note,  the  fact  that  his  signature  was  placed  there  by  an  agent, 
need  not  appear  on  the  note. 

13 


146  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

authority.!  A  power  given  to  two  cannot  be  executed  by  one;^ 
but  some  exception  to  the  rule  as  to  joint  power  exists  in  the 
case  of  public  agencies,^  and  also  in  many  commercial  trans- 
actions. Thus,  either  of  two  factors  —  whether  partners  or  not  — 
may  sell  goods  consigned  to  both."^  And  where  there  are  joint 
agents,  whether  partners  or  not,  notice  to  one  is  notice  to  both.^ 
In  commercial  matters,  usage,  or  the  reason  of  the  thing,  may 
sometimes  seem  to  add  to  an  authority ;  so  far  at  least  as  is  re- 
quisite for  the  full  discharge  of  the  duty  committed  to  the  agent 
in  the  best  and  most  complete  manner.^  Thus,  it  is  held  that  an 
agent,  to  get  a  bill  discounted,  may  indorse  it  in  the  name  of  his 
principal;"  and  a  broker,  employed  to  procure  insurance,  may 
adjust  a  loss  under  the  same ;  but  he  cannot  give  up  any  advan- 
tages, rights,  or  securities  of  the  assured,  by  compromise  or  other- 
wise, without  special  authority.^ 

'  Long  V.  Coburn,  11  Mass.  97;  Eioe  v.  Gove,  22  Pick.  158;  Townsend  v.  Corning, 
23  Wend.  435;  Townsend  i'.  Hubbard,  4  Hill,  357;  Pinckney  v.  Hagadorn,  1  Duer,  96. 
And  where  the  agency  appears  from  a  contract  made  by  the  agent  for  a  domestic  prin- 
cipal, the  presumption  is  that  the  agent  meant  to  bind  his  principal  only.  Kirkpatrick 
V.  Stainer,  22  Wend.  255 ;  Dyer  v.  Burnham,  25  Maine,  13  ;  Alexander  v.  Bank  of  Kut- 
land,  24  Vt.  222. 

^  Andover  v.  Grafton,  7  N.  H.  304  ;  Dispatch  Line  of  Packets  v.  Bellamy  Manuf.  Co. 
12  id.  226;  Kupfer  v.  South  Parish  in  Augusta,  12  Mass.  185;  Damon  v.  Granby,  2 
Pick.  354 ;  Copeland  v.  Mercantile  Ins.  Co.  6  id.  202;  First  Parish  in  Sutton  v.  Cole, 
3  id.  244  ;  Low  v.  Perkins,  10  Vt.  532  ;  Green  v.  Miller,  6  Johns.  39.  But  it  is  other- 
wise where  an  intention  appears  in  the  instrument  creating  the  authority  to  authorize 
the  agents  to  act  separately.     Guthrie  v.  Armstrong,  5  B.  &  Aid.  628. 

3  Co.  Litt.  181,  b. ;  Com.  Dig.  Attorney,  (C) ;  Bac.  Abr.  Authority,  (C) ;  King  v. 
Beeston,  3  T.  R.  592 ;  Grindley  v.  Barker,  1  B.  &  P.  229  ;  The  King  v.  Whitaker,  9  B. 
&  C.  648. 

*  Godfrey  v.  Saunders,  3  Wils.  114. 

5  Bank  of  the  United  States  v.  Davis,  2  Hill,  463,  464. 

6  Parsons  on  Contracts,  p.  52  ;  Sutton  v.  Tatham,  10  Ad.  &  El.  27  ;  Le  Eoy  v.  Beard, 
8  How.  467.  The  application  of  this  doctrine  to  cases  where  the  authority  is  in  writing, 
is  at  least  doubtful.  Attwood  v.  Munnings,  7  B.  &  C.  278;  Johnston  v.  Usborne,  11 
A.  &  E.  557;  Delafield  v.  Illinois,  26  Wend.  192;  Schimmclpennich  v.  Bayard,  1  Pet. 
264.  Usage  may  likewise  limit  a  general  authority.  Dickinson  v.  Lilwall,  4  Campb. 
279. 

■?  Penn  v.  Harrison,  4  T.  R.  177.     See  Nickson  v.  Birhan,  10  Mod.  109.    Unless  the  . 
agent  be  expressly  forbidden  to  indorse  the  bill.     Fenn  v.  Harrison,  3  T.  R.  757. 

^  Richardson  v.  Anderson,  1  Campb.  43,  n.     Therefore,  a  settlement  made  by  a  set- 
off of  the  premiums  due  from  the  broker  to  tlie  underwriter,  on  general  account  against " 
the  sum  due  on  the  policy  from  the  underwriter,  will  not  bind  the  assured,  unless  as- 
sented to  by  him.     Todd  v.  Reid,  4  B.  &  Aid.  210;  Russell  v.  Bangley,  id.  395  ;  Bart- 
lett  V.  Peutland,  10  B.  &  C.  760  ;  Scott  v.  Irving,  1  B.  &  Ad.  605. 


en.  X.]  AGENCt.  147 


SECTION  V. 


LIABILITY   OF   AN   AGENT. 


Generally,  an  agent  makes  himself  liable  by  his  express  agree- 
ment,^ or  by  transcending  his  authority,  or  by  a  material  de- 
parture from  it,2  or  by  concealing  his  character  as  agent,^  or  by 
such  conduct  as  renders  his  principal  irresponsible,*  or  by  his 
own  bad  faith.  If  he  exceeds  his  authority,  he  is  liable  on  the 
whole  contract,  although  a  part  of  it  is  within  his  authority.^ 
One  who,  having  no  authority,  acts  as  agent,  is  personally  respon- 
sible.^ But  if  an  agent  transcends  'his  authority  through  an 
ignorance  of  its  limits,  which  is  actual  and  honest,  and  is  not 
imputable  to  his  own  neglect  of  the  means  of  knowledge,  it  may 
be  doubted  whether  he  would  be  held.  But  we  think  he  would, 
if  an  innocent  party  dealing  with  him  as  agent,  would  otherwise 
suffer  loss.''     But  he  should  be  sued  in  an  action  on  the  case  for 

'  If  an  agent,  executing  a  written  contract,  use  language  the  legal  effect  of  which  is 
to  charge  himself  personally,  it  is  not  competent  for  him  to  exonerate  himself  by  show- 
ing that  he  acted  for  a  principal,  and  that  the  other  contracting  party  knew  this  fact  at 
the  time  when  tiie  agreement  was  made  and  signed.  Jones  v.  Littledale,  6  Ad.  &  El. 
486  ;  Magce  v.  Atkinson,  2  M.  &  W.  440 ;  Higgins  v.  Senior,  8  id.  834.  A  fortiori, 
where  the  contract  is  under  seal.  Appleton  v.  Binks,  5  East,  148  ;  Duvall  v.  Craig,  2 
Wiieat.  56;  Tippets  i-.  Walker,  4  Mass.  595 ;  Forster  i'.  Fuller,  6  id.  58;  White  v. 
Skinner,  13  Johns.  307  ;  Stone  v.  Wood,  7  Cow.  453;  Fash  v.  Ross,  2  Hill,  (S.  Car.) 
294. 

2  Feeter  v.  Heath,  11  Wend.  477;  White  v.  Skinner,  13  Johns,  307;  Johnson  v. 
Ogilby,  3  P.  W.  279  ;  Pitman  v.  Kintner,  5  Blackf.  250.  As  where  he  sells  for  credit, 
contrary  to  the  instructions  of  his  principal.  Walker  v.  Smith,  4  Dallas,  389.  But 
this  departure  from  authority,  in  order  to  charge  the  agent,  must  be  unknown  to  the 
other  contracting  party.    Jones  v.  Downman,  4  Q.  B.  235,  n.  (a.) 

3  Franklyn  v.  Lam^pd,  4  C.  B.  637  ;  Evans  v.  Evans,  3  Ad.  &  El.  132. 

*  Fenn  v.  Harrison,  3  T.  R.  761,  per  Ashurst,  J. ;  Savage  v.  Rix,  9  N.  H.  263. 

5"  Fleeter  v.  Heath,  11  Wend.  485.  It  was  held,  in  Johnson  v.  Blasdale,  1  S.  &  M.  1, 
that,  if  an  agent,  in  filling  up  a  blank  note,  exceed  his  authority,  and  the  third  party 
receive  the  note  with  knowledge  that  the  authority  has  been  transcended,  the  note  will 
not  be  void  in  tolo,  but  onlv  for  the  excess  beyond  the  sum  authorized. 

6  East  India  Co.  v.  Hensley,  1  Esp.  112;  Johnson  v.  Ogilby,  3  P.  W.  278,  279; 
Bowcn  v:  Morris,  2  Taunt,  38'5,  386 ;  Jones  v.  Downman,  4  Q.  B.  235 ;  Thomas  v. 
Hewcs,  2  C.  &  Mee.  530,  note  (a) ;  Dusenbury  v.  Ellis,  3  Johns.  Cas.  70;  Meech  v. 
Smith,  7  Wend.  315;  ^Voodes  v.  Dennett,  9  N.  H.  55;  Palmer  v.  Stephens,  1  Denio, 
471. 

■^  Smout  V.  Ilbery,  10  M.  &  W.  9.  See  a  contrary  dictum  of  Lord  Tenterden,  in  Pol- 
hill  V.  Walter,  3  B.  &  Ad.  124,  where  it  was  said  that,  if  tpe  agent  "acted  upon  a 
power  of  attorney  which  he  supposed  to  be  genuine,  but  which  was  in  fact  a  forgery, 
he  would  have  incurred  no  liability,  for  he  would  have  made  no  statement  which  he 
knew  to  be  false."  According  to  a  recent  case  in  England,  the  agent  is  not  liable  to 
the  party  dealing  with  him,  where  there  has  been  no  fraud  or  concealment  on  his  part, 


148  ELEMENTS  OF 'mercantile  LAW.  [CH.  X. 

falsely  assuming  authority  to  act  as  agent,  and  not  on  the  con- 
tract, unless  it  contains  apt  words  to  charge  hira  personally.^ 


SECTION  VI. 


RIGHTS   OF   ACTION   GROWING   OUT   OF   AGENCY. 

If  an  agent  intrusted  with  goods,  sell  the  same  without  author- 
ity, the  principal  may  affirm  the  sale  and  sue  the  buyer  for  the 
price,  or  he  may  disaffirm  the  sale  and  recover  the  goods  from 
the  vendee.2 

In  case  of  a  simple  contract,  an  undisclosed  principal  may 
show  that  the  nominal  party  was  actually  his  agent,  and  thus 
make  himself  actually  a  party  to  the  contract,  and  sue  upon  it.^ 
But  he  cannot  do  this  to  the  detriment  of  the  other  party.^  So, 
too,  an  undisclosed  principal,  when  discovered,  may  be  made 
liable  on  such  contract ;  ^  but  would  be  protected  if  his  accounts 

and  the  circumstances  which  revoked  his  authority  before  the  business  was  transacted, 
were  equally  within  the  knowledge  of  both  contracting  parties.  Thus,  where  a  man 
who  had  been  in  the  habit  of  dealing  with  the  plaintiff  for  meat  supplied  to  his  house, 
went  abroad,  leaving  his  wife  and  family,  and  died  abroad,  it  was  held  that  the  wife 
was  not  liable  for  meat  supplied  to  her  after  his  death,  and  before  information  thereof 
had  been  received.     Smout  v.  Ilbery,  supra. 

1  Long  V.  Colburn,  11  Mass.  97  ;  Ballou  v.  Talbot,  16  id.  461 ;  Jefts  v.  York,  4  Cush. 
371 :  Abbey  v.  Chase,  6  id.  54;  Harper  v.  Little,  2  Greenl.  14;  Stetson  v.  Patten,  id. 
358-  Hopkins  v.  Mehaffy,  11  S.  &  R.  126  ;  Jenkins  v.  Hutchinson,  13  Q.  B.  744.  See 
2  Cro.  &  Mee.  530,  note ;  Wilson  v.  Barthrop,  2  M.  &  W.  863  ;  Jones  v.  Down  man,  4 
Q.  B.  235,  note ;  Woodes  v.  Dennett,  9  N.  H.  55  ;  Savage  v.  Rix,  9  id.  263  ;  Moor  v. 
Wilson,  6  Fost.  332.  But  in  New  York,  the  agent  is  held  liable  on  the  contract  in 
such  cases,  whatever  may  be  the  language  used.  Dusenbury  v.  Ellis,  3  Johns.  Cas.  70; 
White  V.  Skinner,  13  Johns.  307  ;  Randall  v.  Van  Vechten,  19  id.  60 ;  Meech  v.  Smith, 
7  Wend.  315  ;  Palmer  v.  Stephens,  1  Denio,  471. 

"^  See  ante,  p.  141,  nn.  2  and  3. 

3  The  Duke  of  Norfolk  v.  Worthy,  1  Campb.  337  ;  Sadler  v.Ceigh,  4  id.  195  ;  Cop- 
pin  V.  Walker,  7  Taunt.  237 ;  Wilson  v.  Hart,  id.  295  ;  Higgins  v.  Senior,  8  M.  &  W. 
844;  Whitmore  v.  Gilmour,  12  id.  808;  Taintor  v.  Prendergast,  3  Hill,  72;  Edwards 
r.  Golding,  20  Vt.  30;  Commercial  Bank  v.  French,  21  Pick.  486;  Huntington  v. 
Knox,  7  Cush.  371 ;  Girard  v.  Taggart,  5  S.  &  R.  27.  The  same  rule  applies  where 
the  agent  is  a  partner  or  joint  party,  acting  for  his  copartners  or  the  other  joint  parties. 
Skinner  v.  Stocks,  4  B.  &  Aid.  437  ;  Garrett  v.  Handley,  4  B.  &  C.  664 ;  Cothay  v. 
Fennell,  10  id.  671.  But  if  the  agent  describes  himself  as  owner  in  the  written  con- 
tract, the  principal  cannot  sue.     Humble  v.  Hunter,  12  Q.  B.  310. 

*  George  v.  Clagett,  7  T.  R.  359;  Stracey  v.  Deev,  7  id.  361,  note;  Baring  v.  Corrie, 
2  B.  &  Aid.  137;  Carr  v.  Hinchliff,  4  B.  &  C.  547 ;  Sims  v.  Bond.  5  B.  &  Ad.  389  ; 
W.arner  v.  M'Kay,  1  M.  &  W.  591  ;  Kelley  v.  Munson,  7  Mass.  324;  Lime  Rock  Bank 
f.  Plimpton,  17  Pick.  159;  Violett  v.  Powell,  10  B.  Monr.  347;  Gardner  v.  Allen,  6 
Ala.  187;  Wait  v.  Johnson,  24  Vt.  112. 

^  Moore  v.  Clementson,  2  Campb.  22;  Thomas  v.  Edwards,  .2  M.  &  W.  215  ;  Jones 
V.  Littledale,  6  A.  &  E.  486;  Nelson  v.  Powell,  3  Doug.  410;  Trueman  v.  Loder,  11 
A.  &  E.  589;    Beebee  v.  Robert,  12  Wend.  413  ;  Taintor  v.  Prendergast,  3  Hill,  72; 


CH.  X.]  AGENCY.  149 

or  relations  with  his  agent  had  been  in  the  mean  time  changed 
in  good  faith,  so  as  t6  make  it  detrimental  to  him  to  be  held 
liable.'  If  one  sells  to  an  agent,  knowing  him  to  be  an  agent, 
and  knowing  who  is  his  principal,  and  elects  to  charge  the  goods 
to  the  agent  alone,  he  cannot  afterwards  transfer  the  charge  to 
the  principal.^ 

In  any  transaction  done  through  an  agent,  the  knowledge  of 
the  principal  is  said  to  be  the  knowledge  of  the  agent  ;3  we 
should  doubt  whether  it  were  so  always,  at  the  instant  of  the 
principal's  acquiring  it;  but  it  certainly  is  when  the  pftncipal  has 
had  the  means  of  communicating  the  knowledge  to  the  agent* 
Notice  to  an  agent  before  the  transaction  goes  so  far  as  to  render 
the  notice  useless,  is  notice  to  the  principal.^  And  knowledge 
obtained  by  an  agent  in  the  course  of  the  transaction  itself,  is 
knowledge  of  the  principal.^     Notice  to  an  officer  or  member  of 

Upton  V.  Gray,  2  Greenl.  373;  Hyde  v.  Wolf,  4  Louis.  234;  Conro  v.  Port  Henry  Iron 
Co.  12  Barb.  27;  Clealand  t-.  Walker,  11  Ala.  1064;  Perth  Amboy  Manuf.  Co.  v. 
Condit,  1  Zabriskie,  (N.  J.)  G59.  And  the  same  rule  holds  where  the  party  dealing 
with  the  agent  knows  him  to  be  acting  as  agent;  but,  not  knowing  who  his  principal  is, 
credits  the  agent.  Thomson  v.  Davenport,  9  B.  &  C  78 ;  Raymond  v.  Crown  and 
Eagle  Mills,  2  Met.  319  ;  JJaxter  v.  Duren,  29  Maine,  434.  According  to  the  English 
authorities,  the  liability  of  the  unnamed  principal  in  such  cases  is  not  affected  by  the 
Statute  of  Frauds.  Higgins  v.  Senior,  8  M.  &  W.  844 ;  Traeman  v.  Loder,  1 1  A.  & 
E.  589  ;  Beckham  v.  Drake,  9  M.  &  W.  79,  11  id.  315.  But  this  has  been  denied  in 
this  country.     Fenly  v.  Stewart,  5  Sandf.  101.     And  sec  1  Parsons  on  Cont.  48,  n.  (a.) 

1  Thompson  v.  Davenport,  9  B.  &  C.  78;  Kymer  v.  Suwercropp,  1  Campb.  109;  Carr 
V.  Hinchliff,  4  B.  &  C.  551 ;  Horsf:ill  v.  Fauntleroy,  10  B.  &  C.  755  ;  Taylor  v.  Kymer, 
3  B.  &  Ad.  334  ;  Sims  v.  Bond,  5  B.  &  Ad.  393  ;  Smyth  v.  Anderson,  7  C.  B.  21. 

-  Paterson  v.  Gandasequi,  15  East,  62;  Addison  v.  Gandassequi,  4  Taunt.  574; 
Thomson  v.  Davenport,  9  B.  &  C  78  ;  Patapsco  Ins.  Co.  v.  Smith,  6  H.  &  J.  171  ; 
French  v.  Price,  24  Pick.  13:  Green  v.  Tanner,  8  Met.  411  ;  Paige  v.  Stone,  10  id.  169; 
Hyde  v.  Paige,  9  Barb.  150;  Clealand  v.  Walker,  11  Ala.  1058. 

"3  Mayhew  v.  Eames,  3  B.  &  C-  601 ;  Powles  v.  Page,  3  C.  B.  16. 

*  In  Willis  V.  Bank  of  England,  4  Ad.  &  El.  21,  39,  the  doctrine  of  notice  was  thus 
stated  by  Lord  Denman:  "The  general  rule  of  law  is,  that  notice  to  the  principal  is 
notice  to  all  his  agents ;  at  any  rate,  if  there  be  reasonable  time,  as  there  was  here,  for 
the  principal  to  communicate  that  notice  to  his  agents,  before  the  event  which  raises 
the  question  happens.  .  .  .  We  have  been  pressed  with  the  inconvenience  of  requiring 
every  trading  company  to  communicate  to  their  agents  everywhere  whatever  notices 
they  may  receive,  but  the  argument  ah  inconvenienti  is  seldom  entitled  to  much  weiglit 
in  deciding  with  legal  questions;  and  if  it  were,  other  inconveniences  of  a  more  serious 
nature  would  obviouslv  grow  out  of  a  different  decision." 

5  Astor  V.  Wells,  4  Wheat.  466  ;  Hovey  v.  Blanchard,  13  N.  H.  145.  As  to  the  time 
when  notice  may  be  given,  see  Tourville  v.  Naish,  3  P.  Wms.  307  ;  Wigg  v.  Wigg,  1 
Atk.  384;  Story  v.  Lord  Windsor,  2  Atk.  630;  More  v.  Mayhow,  1  Ch.  Cas.  34; 
Bracken  i'.  Miller,  4  W.  &  S.  102.  Where  a  notice  is  required,  and  nothing  is  said  as 
to  the  manner  of  notification,  in  general  it  may  be  by  parol.  McEwen  v.  The  Mont- 
gomery County  Ins.  Co.  5  Hill,  101.  If  one  assume  to  act  as  agent  of  another,  the 
party  adopting  the  act  must  take  it  charged  with  notice  of  such  matters  as  appear  to 
have  been  at  the  time  of  the  act  within  the  knowledge  of  the  agent.  Hovey  v. 
Blanchard,  svpra. 

6  Fitzherbert  v.  Mather,  IT.  R.  12;  Cowen  v.  Simpson,  1  Esp.  290;  Berkeley  v. 
"Watling,  7  Ad.  &  El.  29 ;  Sutton  v.  Dillaye,  3  Barb.  529.    So  the  principal  is  charge- 

13* 


150  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 

a  corporation,  is  notice  to  that  corporation,  if  the  officer  or  mem- 
ber, by  appointment,  or  by  usage,  had  authority  to  receive  it  for 
the  corporation ;  ^  but  notice  to  any  member  is  not  necessarily 
notice  to  a  corporation.^ 

If  money  be  paid  to  one  as  agent  of  a  principal  who  has  color 
of  right,  the  party  paying  cannot  try  that  right  in  an  action 
against  the  agent  for  money  had  and  received,  but  must  sue  the 
principal.^  But  where  the  principal  has  no  right,  the  action  may 
be  brought  against  the  agent,  unless  he  has  in  good  faith  paid 
the  money*over  to  his  principal,  or  made  himself  personally  liable 
to  him  for  it.*  '  And  if  he  received  the  money  illegally,  he  may 
be  sued,  although  he  has  paid  it  over;^  or  if  he  has  paid  it  over 
when  he  should  not  have  done  so ;  as  if  he  pays  it  before  a  cer- 
tain condition,  precedent  to  the  payment,  be  performed.*^ 

able  with  notice  to  a  duly  autliorized  sub-agent.  Boyd  v.  Vanderliemp,  1  Barb.  Ch. 
273.  But  notice  to  the  agent,  in  order  to  affect  the  principal,  must  be  obtained  in  the 
course  of  tlie  same  transaction.  Thus,  it  is  held  that  knowledge  obtained  by  an  attor- 
ney in  another  transaction,  does  not  bind  his  client.  Mountford  v.  Scott,  3  Madd.  34; 
Worsley  v.  Scarborough,  3  Atk.  392  ;  Hiern  v.  Mill,  13  Ves.  120;  Hood  v.  Fahnestock, 
8  Watts,  489;  Bracken  v.  Miller,  4  W.  &  S.  102.  But  see  Hargreaves  v.  Rothwell,  1 
Keen,  154;  Champlin  v.  Layton,  6  Paige,  189;  Griffith  V.Griffith,  9  id.  315,  1  HofF. 
Ch.  153.  Where  vendor  and  purchaser  employ  the  same  solicitor,  the  purchaser  is 
affected  with  notice  of  whatever  that  solicitor  had  notice  of  in  that  transaction,  in  his 
capacity  of  solicitor  for  either  vendor  or  purchaser.  Toulmin  v.  Stcere,  3  Meriv.  210; 
Fuller  V.  Benett,  2  Hare,  394;  Dryden  v.  Frost,  3  Mylne  &  Cr.  670. 

1  Taff  Vale  Railway  Co.  v.  Giles,  22  Eng.  Law  and  Eq.  202 ;  Bank  of  United  Slates 
V.  Davis,  2  Hill,  451 ;  North  River  Bank  v.  Aymar,  3  id.  274  ;  Conro  v.  Port  Henry 
Iron  Co.  12  Barb.  27  ;  The  New  Hope  and  Delaware  Bridge  Co.  v.  The  Phccnix  Banls, 
3  Comst.  156;  Porter  v.  Bank  of  Rutland,  19  Vt.  410.  It  has  been  held  that  notice  to 
a  director  of  a  bank  is  not  notice  to  the  bank.  Louisiana  State  Bank  v.  Scnecal,  13 
Louis.  525 ;  Commercial  Bank  v.  Cunningham,  24  Pick.  276;  Custer  v.  Tompkins 
County  Bank,  9  Penn.  St.  27.  But  if  a  director  wlio  has  received  notice,  communicates 
the  same  to  the  board  of  directors  at  a  regular  meeting,  the  bank  is,  of  course,  bound. 
Bank  of  Pittsburgh  v.  Whitehead,  10  Watts,  397.  And  notice  to  the  president  or 
cashier  of  a  bank,  of  matters  relating  to  the  ordinary  business  of  the  institution,  is 
notice  to  the  bank.  New  Hope  and  Delaware  Bridge  Co.  v.  The  Phoenix  Bank,  3 
Comst.  156  ;  Conant  v.  The  Seneca  County  Bank,  1  Ohio  St.  R.  298;  Bank  of  St. 
Marys  v.  Mumford,  6  Geo.  44. 

■^  Hoiy5atonic  and  Lee  Banks  v.  Martin,  1  Met.  308 ;  Bank  of  Pittsburgh  v.  White- 
head, 10  Watts,  397;  Union  Canal  Co.  v.  Loyd,  4  W.  &  S.  393.  And  see  Fulton 
Bank  v.  New  York  and  Sharon  Canal  Co.  4  Paige,  136  ;  National  Bank  v.  Norton,  1 
Hill,  578 ;  Powles  v.  Page,  3  C.  B.  16. 

3  Pond  V.  Underwood,  2  Ld.  Raym.  1210  ;  Sadler  v.  Evans,  4  Burr.  1984  ;  Horsfall  v. 
Handly,  8  Taunt.  136;  Alexander  v.  Southey,  5  B.  &  Aid.  247  ;  Bamford  v.  Shuttle- 
worth,  11  Ad.  &  El.  926  ;  Stephens  v.  Badcock,  3  B.  &  Ad.  354  ;  Costigan  v.  Ncwland, 
12  Barb.  456  ;  Colvin  i?.  Ilolbrook,  2  Comst.  126.  But,  to  protect  the  agent,  the  money 
should  be  paid  to  him  voluntarily  and  for  the  principal's  use.  Snowdon  v.  Davis, 
1  Taunt.  359  ;  Ripley  v.  Gelston,  9  Johns.  209. 

*  Buller  V.  Harrison,  Cowp.  565;  Wilson  v.  Anderton,  1  B.  &  Ad.  450 ;  Cox  v. 
Prentice,  3  M.  «&  S.  344;  Hearsey  v.  Pruyn,  7  Johns.  182;  McDonald  v.  Napier,  14 
Geo.  89. 

5  Townson  v.  Wilson,  1  Campb.  396;  Smith  v.  Sleap,  12  M.  &  W.  585. 

6  Hardman  v.  Willcork,  9  Bing.  382,  note.     So,  if  the  agent  has  received  notice  not 


CH.  X.]  AGENCY.  151 

For  an  injury  sustained  from  a  third  party  through  the  default 
of  an  agent,  a  principal  may,  generally,  bring  an  action  against 
that  third  party  in  his  own  name;  and  then  may  have  the  evi- 
dence of  the  agentf  If  an  agent  and  a  third  person  have  used 
the  principal's  money  illegally,  as  in  the  purchase  of  lottery 
tickets,  though  the  agent  could  bring  no  action,  the  principal 
may,  if  personally  innocent.  And  where  an  agent  has  been  in- 
duced, by  the  fraud  of  a  thirct  person,  to  pay  money  which  ought 
not  to  have  been  paid,  cither  the  agent  or  the  principal  may 
bring  an  action  to  recover  the  money  back.' 

An  agent  in  possession  of  negotiable  paper  may  be  treated 
with  as  having  full  authority  to  dispose  of  the  same,  by  any  per- 
son not  having  knowledge  of  the  absence  or  limitation  of  author- 
ity .^  But  if  they  are  given  only  in  payment  of  or  as  security  for 
a  preexisting  debt,  there  is,  perhaps,  reason  for  saying  that  the 
receiver  takes  only  the  right  and  interest  of  the  party  from  whom 
he  receives  them.  Such,  at  least,  has  been  the  decision  in  some 
cases ;  on  the  ground  that  this  was  not  a  proper  business  use  of 
negotiable  paper.  But  we  are  not  entirely  satisfied  either  with 
the  reason,  or  the  conclusion.^ 

to  pay  over,  then  he  may  be  sued.    Sadler  v.  Evans,  4  Burr.  1984;  Hardacre  v.  Stewart, 

5  Esp.  103;  Hearsey  v.  Pruyn,  7  Johns.  179;  Elliott  v.  Swartvvout,  10  Pet.  136;  Bend 
V.  Hoyt,  13  id.  263;  Gary  v.  Curtis,  3  How.  236.  And  knowledge  that  such  payment 
would  be  wrongful,  is  equivalent  to  express  notice.  Edwards  v.  Hodding,  5  Taunt.  815. 
It  is  held  in  New  York  that,  where  an  agent  rightfully  receives  money  for  his  principal, 
•which  ought  to  be  paid  over  by  the  principal  to  a  third  person,  such  third  person  can- 
not maintain  an  action  against  the  agent  to  recover  it,  though  the  agent  has  never  in 
fact  paid  it  over  to  his  principal,  and  though  the  agent  had  notice  of  the  claim  of  such 
third  person.  Costigan  v.  Newland,  12  Barb.  456;  Colvin  v.  Holbrook,  2  Comst.  126  ; 
McDonald  v.  Napier,  14  Geo.  89. 

'  Stevenson  v.  Mortimer,  Cowp.  806;  Holt  v.  Ely,  18  Eng.  Law  and  Eq.  422,  1  Ell. 

6  Black.  795. 

-  Collins  V.  Martin,  1  B.  &  P.  648 ;  Bolton  v.  Puller,  1  id.  539 ;  Jarvis  v.  Eogers,  13 
Mass.  105;  Bay  v.  Coddington,  5  Johns.  Ch.  54,  20  Johns.  637.  But  if  a  person,  re- 
ceiving such  paper  from  the  agent,  has  notice  of  the  extent  and  limitation  of  liis 
authority,  he  is  bound  by  it.  Goodman  v.  Harvey,  4  Ad.  &  El.  870;  Uther  v.  Rich,  10 
id.  784;  Stephens  v.  Foster,  1  Cromp.,  Mees.  &  Ros.  849;  Arbouin  v.  Anderson,  1  Q. 
B.  498.  So,  if  the  indorsement  is  restrictive ;  for  this  is  constructive  notice.  Treuttel 
V.  Barandon,  8  Taunt.  100;  Sigourney  v.  Lloyd,  8  B.  &  C.  622,  5  Bing.  525 ;  Brown  v. 
Jackson,  1  Wash.  C.  C.  515. 

^  Bav  V.  Coddington,  5  Johns.  Ch.  54,  20  Johns.  637;  Payne  v.  Cutler,  13  Wend. 
605;  S'talker  v.  M'Donald,  6  Hill,  93.  And  see,  contra,  Swift  v.  Tyson,  16  Pet.  15; 
Chicopee  Bank  v.  Chapin,  8  Met.  40;  Stevens  v.  Blanchard,  3  Cush.  169;  Bramhall  v. 
Beckett,  31  Maine,  205. 


152  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  X. 

SECTION   VII. 

HOW   A    PRINCIPAL   IS    AFFECTED   BY    THE    ACTS    OF   HIS    AGENT. 

If  an  agent  make  a  fraudulent  representation,  a  principal  may 
be  liable  for  resulting  injury,  although  personally  ignorant  and 
innocent  of  the  wrong  ;i  nor  can  he  take  any  benefit  therefrom.^ 
And  even  if,  without  actual  fraud,  he  makes  a  false  representa- 
tion as  to  a  matter  peculiarly  within  the  knowledge  of  himself  or 
his  principal,  the  principal  cannot  claim  or  hold  any  advantage 
therefrom  ;  but  the  party  dealing  with  the  agent  may  rescind  and 
annul  the  transaction,  if  he  do  so  as  soon  as  he  has  knowledge 
of  the  untruth  ;  and  may  then  recover  back  money  paid  or  goods 
sold  or  delivered.^  But  such  representations  will  not  affect  the 
principal  unless  they  are  made  during  and  in  the  very  course  of 
that  transaction."* 

Payment  to  an  agent  binds  the  principal  only  if  made  to  him 
in  the  course  of  business,  and  appropriated  by  the  payer  to  that 
specific  purpose,  and  the  agent  has  authority  to  receive  the 
money,  either  by  express  appointment,  by  usage,  or  by  the  reason 
of  the  case.^     Payment  to  a  sub-agent  appointed  by  the  agent, 

1  Hern  v.  Nicliols,  1  Salk.  289;  Fitzhevbert  v.  Mather,  1  T.  II.  12;  Doe  v.  Martin, 
4  id.  66;  Taylor  v.  Green,  8  C.  &  P.  316  ;  Irving  ?'.  Motly,  7  Bing.  543;  Attorney- 
General  ;;.  Ansted,  12  M.  &  W.  520 ;  Locke  v.  Stearns,  1  Met.  560 ;  Southwick  v.  Estes, 
7  Cusli.  385;  Concord  Bank  v.  Gregg,  14  N.  H.  331.  And  he  is  so  liable  for  the  fraud 
of  his  agent,  acting  in  violation  of  positive  instruction,  provided  he  keeps  within  the 
course  of  iiis  usual  employment.  Johnson  v.  Barber,  5  Gilman,  425  ;  Lobdell  v.  Baker, 
1  Met.  193;  Concord  Bank  v.  Gregg,  14  N..H.  331.  And  see  Peto  v.  Hague,  5  Esp. 
135;  Huckman  v.  Fernie,  3  M.  &  W.  505;  Woodin  v.  Burford,  2  Cr.  &  Mees.  392; 
Sherwood  v.  Marwick,  5  Greenl.  302;  United  States  v.  Williams,  Ware,  175.  Aider,  if 
he  goes  beyond  the  scope  of  his  business,  or  if  he  is  known,  by  the  party  dealing  with 
him,  to  be  violating  his  instructions.     Cases  supra. 

2  Seaman  w.  Foncreau,  2  Stra.  1183;  Taylor  v.  Green,  8  C.  &  P.  31G;  Jeffrey  v. 
Bigeiow,  13  Wend.  518;  Olmsted  v.  Hotailing,  1  Hill,  317;  Fitzsimmons  v.  Joslin,  21 
Vt.  129  ;  Veazie  v.  Williams,  3  Story,  611,  8  How.  134  ;  Mason  v.  Crosby,  1  Wood.  & 
Minot,  342;  Foster  v.  Swasey,  2  Wood.  &  Minot,  217. 

3  Willes  V.  Glover,  4  B.  &  P.  14  ;  Fitzherbert  v.  Mather,  1  T.  E.  16 ;  Carpenter  «;. 
Am.  Ins.  Co.  1  Story,  57.  And,  it  seems,  the  purchaser,  without  rescinding  the  con- 
tract, may  maintain  case  for  deceit  against  the  principal.    Fuller  v.  Wilson,  3  Q.  B.  58. 

*  Peto  V.  Hague,  5  Esp.  134;  Dawson  v.  Attv,  7  East,  367;  Snowball  v.  Goodricke, 
4  B.  &  Ad.  543  ;  Fairlie  v.  Hastings,  10  Vcs.  12.3;  Thallhimer  v.  Brinckerhoft',  4  Wend. 
394;  Hubbard  v.  Elmer,  7  Wend.  446;  Sandford  v.  Handy,  23  id.  260;  Bank  of  the 
United  States  v.  Davis,  2  Hill,  464  ;  Nelson  v.  Cowing,  6  Hill,  336  ;  Hannay  v.  Stewart, 
6  Watts,  487;  Hough  v.  llichardson.  3  Story,  689. 

^  Thomson  v.  Thomson,  7  Ves.  470  ;  Drinkwater  v.  Goodwin,  Cowp.  256 ;  Moore  v. 
Clementson,  2  Camp.  22  ;  Capel  v.  Thornton,  3  C.  &  P.  352;  Morris  v.  Cleasby,  1  M. 
&  S.  566  ;  Hodnett  v.  Tatum,  9  Geo.  70.   • 


Cti.  X.]  AGENCY.  153 

but  whose  appointment  is  not  authorized  by  the  principal,  binds 
the  agent,  and  renders  him  liable  to  the  principal  for  any  loss  of 
the  money  in  the  sub-agent's  hands.^  A  legacy  to  a  tradesman, 
paid  to  a  shopman  who  was  in  the  habit  of  receiving  daily  pay- 
ments, was  held  not  a  sufficient  payment  to  discharge  the  execu- 
toT?  Nor  is  the  principal  bound,  if  the  agent  be  authorized  to 
receive  the  money,  but,  instead  of  actually  receiving  it,  discharge 
a  debt  due  from  him  to  the  payer,  and  then  give  a  receipt  as  for 
money  paid  to  his  principal,^  unless  it  can  be  shown  that  he  has 
special  authority  to  receive  payment  in  this  way,  or  that  such 
payment  is  justified  by  known  usage.* 

1  Taber  v.  Perrot,  2  Gall.  565. 

2  Sanderson  r.  Bell,  2  Cr.  &  Mecs.  31.3.  See  Monk  v.  Whittenbury,  2  M.  &  Eob. 
81.  "If  a  sbopman  who  is  authorized  to  receive  payment  over  the  counter  only,  re- 
ceives money  elsewhere  than  in  the  shop,  that  payment  is  not  good.  The  principal 
might  be  willing  to  trust  the  agent  to  receive  money  in  the  regular  course  of  business 
in  the  shop,  when  the  latter  was  under  his  own  eye,  or  under  the  eyes  of  those  in  whom 
he  had  confidence,  but  he  might  not  wish  to  trust  tlie  agent  with  the  receipt  of  money 
elsewhere."     Per  Parke,  B.,  in  Kaye  v.  Brett,  5  Exch.  274. 

3  Todd  V.  Reid,  4  B.  &  Aid.  210  ;  Russell  v.  Bangley,  4  id.  395 ;  Bartlett  v.  Pertland, 
10  B.  &  C.  760;  Scott  v.  Irving,  1  B.  &  Ad.  605;  Kingston  v.  Kincaid,  1  Wash.  C.  C. 
454 ;  Sangston  v.  Maitland,  11  G.  &  J.  286.  An  agent  authorized  to  receive  the  debt 
in  money,  cannot  take  a  note  or  bill,  or  a  banker''^  check.  Ward  v.  Evans,  2  Ld. 
Eaym.  930,  2  Salk.  442 ;  Thorold  v.  Smith,  11  Mod.  71,  87  ;  or  other  personal  property. 
Doct.  &  Stud.  286.  So,  an  agent  authorized  to  sell,  must  sell  for  money,  and  cannot 
barter.  Howard  v.  Chapman,  4  C.  &  P.  508  ;  Guerrciro  r.  Peilc,  3  B.  &  Aid.  616; 
Hays  V.  Stone,  7  Hill,  135,  136.  When  authorized  to  receive  payment  by  a  note,  he 
cannot  pledge  or  otherwise  dispose  of  it.  Jones  v.  Farley,  6  Greenl.  226  ;  Hays  v. 
Lynn,  7  Watts,  524. 

*  Stewart  ;;.  Aberdcin,  4  M.  &  W.  211.  So,  where  an  agent  is  authorized  to  pay, 
out  of  the  sum  to  be  collected  by  him  as  agent,  a  debt  due  to  him  from  the  principal. 
In  Barker  v.  Greenwood,  2  Young  &  Coll.  418,  Alderson,  B.,  says  :  "  If  a  man,  being 
indebted  to  his  own  agent,  authorize  that  agent  to  receive  money  due  to  him  from  his 
debtor,  intending  that  he  should  thereout  pay  himself  his  own  debt,  does  he  authorize 
that  agent  impliedly,  to  the  extent  at  least  of  that  debt,  to  receive  payment  in  any  way 
lie  may  think  fit  ?  I  think  he  does.  An  agent  with  a  general  authority  like  this,  is, 
as  it  seems  to  me,  only  bound  to  receive  payment  in  such  a  way  as  thereby  to  put  it  in 
his  power  completely  to  discharge  the  duty  he  himself  owes  to  his  principal.  If,  there- 
fore, he  is  bound  to  pay  the  whole  over  to  the  principal,  he  must  receive  it  in  cash  from 
the  debtor.  And  a  person  who  pays  such  an  agent,  and  who  means  to  be  safe,  must 
see  that  tiie  mode  of  payment  does  enable  the  agent  to  perform  this,  his  duty.  If, 
therefore,  the  agent  be  not  a  creditor  of  his  principal,  he  must  receive  the  whole  in  cash; 
for,  otherwise,  he  does  not,  by  the  act  done  between  him  and  the  debtor,  put  himself 
into  the  situation  of  being  able  to  pay  it  over.  Such  were  the  cases  of  Todd  v.  Reid, 
4  B.  &  Aid.  210 ;  Russell  v.  Bangley,  4  B.  &  Aid.  395 ;  Bartlett  v.  Pentland,  10  B.  &  C. 
760;  Scott  V.  Irving,  1  B.  &  Ad.  605.  For  in  those  cases,  the  assured  was  entitled,  as 
between  himself  and  the  broker,  to  the  whole  amount  which  the  latter  might  have  re- 
ceived in  cash  from  the  underwriter.  But  if  the  agent  be  himself  a  creditor  of  the 
principal,  and  the  principal  intends,  when  he  makes  him  his  agent  to  receive,  that  he 
shall  retain  his  own  debt  out  of  the  sum  received,  his  only  duty  is  to  pay  over  to  the 
principal  the  balance,  after  deducting  his  own  debt.  If  he,  therefore,  takes  care  to 
receive  in  cash  that  balance,  he,  as  it  seems  to  me,  puts  himself  into  a  situation  as  com- 
pletely to  discharge  his  duty  as  if  he  had  received  the  whole  in  cash.  For,  what  pos- 
sible difference  can  it  make  to  the  principal,  whether  his  agent  receives  the  whole  and 
retains  pdrt,  or  only  receives  that  balance  which  he  himself  is  entitled  to  receive  from 
the  agent.     A  person,  however,  who  does  not  take  the  ordinary  and  proper  course  of 


154  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  X. 

Ill  general,  although  a  principal  may  be  responsible  for  the 
deliberate  fraud  of  his  agent  in  the  execution  of  his  employment, 
he  is  not  responsible  for  his  criminal  acts,  unless  he  expressly 
commanded  them.^  There  is,  however,  a  class  of  cases  in  which 
the  principal  has  intrusted  property  to  his  agent,  and  the  agent 
has  used  it  illegally;  and  this  act  of  the  agent  is  primd  facie  evi- 
dence, sufficing,  if  unexplained,  to  render  the  principal  liable 
criminally,  without  proof  of  his  direct  participation  in  the.  act 
itself.  The  smuggling  of  goods,  the  issue  of  libellous  publica- 
tions, and  the  sale  of  intoxicating  liquors,  by  agents,  belong  to 
this  class.2 


SECTION  VIII. 

MUTUAL   RIGHTS   AND   DUTIES   OF   PRINCIPAL   AND   AGENT. 

An  agent  cannot  depart  from  his  instructions  without  making 
himself  liable  to  his  principal  for  the  consequences.^  In  deter- 
mining the  purport  or  Extent  of  his  instructions,  custom  and 
usage  in  like  cases  will  often  have  great  influence;  because,  on 
the  one  hand,  the  agent  is  entitled  to  all  the  advantages  which  a 
known  and  established  usage  would  give  him ;  and  on  the  other, 
the  principal  has  a  right  to  expect  that  his  agent  will  conduct 
himself  according  to  such  usage.'^     But  usage  is  never  permitted 

paying  the  whole  in  money,  must  talce  care  to  be  able  to  prove  that  the  agent  is  in  this 
situation.  If,  tiiorefore,  he  pays  by  settlement  in  account,  lie  takes  upon  himself,  in 
such  a  case  as  this,  the  risk  of  being  able  to  show  the  debt  due  from  the  principal  to 
the  agent,  and  the  specific  circumstances  under  which  the  agent  was  appointed  to 
receive  the  money." 

^  Hern  v.  Nichols,  1  Salk.  289,  per  Holt,  J.  C. ;  Crockford  v.  Winter,  1  Camp.  124 ; 
Rex  V.  Huggins,  2  Str.  885. 

-  Ilex  V.  Almon,  5  Burr.  2686;  Rex  v.  Gutch,  M.  &  Mai.  433;  Attorney-General  v. 
Siddon,  1  Cro.  &  Jerv.  220;  Commonwealth  v.  Nichols,  10  Met.  259. 

^  Anonymous,  2  Mod.  100;  Chapman  v.  Morton,  11  M.  &  W.  540;  Rundle  v. 
Moore,  3  Johns.  Cas.  36 ;  Liotard  v.  Graves,  3  Caines,  238  ;  Leverick  v.  Meigs,  1  Cow. 
645  ;  Manella  v.  Barry,  3  Cranch,  415,  439 ;  Kingston  v.  Kincaid,  I  Wash.  C  C.  454; 
Loraine  v.  Cartwright,  3  Wash.  C.  C.  151 ;  Day  v.  Crawford,  13  Geo.  508  ;  Evans  v. 
Root,  3  Selden,  186.  "And  no  motive  connected  with  the  interest  of  the  principal,  how- 
ever honestly  entertained,  or  however  wisely  adopted,  can  excuse  a  breach  of  tlie  in- 
structions." Per  Wnsldnglon,  J.,  in  Coureier  v-  Ritter,  4  Wash.  C.  C.  551.  But  there 
are  cases  of  unexpected  emergencies  which  have  been  held  to  .justify  a  departure  from 
the  instructions,  wlien  such  departure  was  for  tlie  certain  benefit  of  the  principal.  Wil- 
liams V.  Shackelford,  16  Ala.  318;  Davis  v.  Waterman,  10  Vt.  526;  Perez  v.  Miranda, 
19  Martin,  494.  Such  emergencies  arise  mainly  where  the  agent  is  a  master  of  a  ves- 
sel, a  supercargo,  or  a  foreign  factor,  and  are  peculiar  to  the  law-merchant.  Sec  Dusar 
V.  Perit,  4  Binn.  361. 

*  Marzetti  v.  Williams,  1  B.  &  Ad.  415  ;  Sutton  v.  Tatham,  10  Ad.  &  El.  27;  Syke8 


CH.  X.]  AGENCY.  155 

to  prevail  over  express  instructions.^  A  principal  who  accepts 
the  benefit  of  an  act  done  by  his  agent  beyond  or  aside  from  his 
instructions,  discharges  the  agent  from  responsibility  therefor.^ 
And  any  delay  in  renouncing  the  transactioji  as  soon  as  he  can, 
or  any  inclination  to  wait  and  make  a  profit  out  of  it,  is  an  ac- 
ceptance of  the  act.^  But  if  the  agent  has  bought  goods  for  his 
principal  without  authority,  the  latter  may  renounce  the  sale,  and, 
nevertheless,  hold  the  goods  if  he  has  advanced  money  on  them.* 
In  general,  every  agent  is  entitled  to  indemnity  from  his  prin- 
cipal, when  acting  in  obedience  to  his  lawful  orders,^  or  when  he, 
in  conformity  with  his  instructions,  does  an  act  which  is  not 
wrong  in  itself,  and  which  he  is  induced  by  his  principal  to  sup- 
pose right  at  that  time.*' 

,  An  attorney  or  agent  cannot  appoint  a  sub-attorney  or  agent, 
unless  authorized  to  do  so  expressly,  or  by  a  certain  usage,  or 
the  obvious  reason  and  necessity  of  the  case.^     And  a  sub-agent, 

V.  Giles,  5  M.  &  W.  645  ;  Kingston  v.  Wilson,  4  Wash.  C.  C.  310.  Nor  need  the 
usage  be  known  to  the  principal,  rdlock  v.  Stables,  12  Q.  B.  765;  Baylifte  v.  Butter- 
worth,  1  Exch.  425. 

1  Catlin  r.  Bell,  4  Camp.  184;  Giierreiro  v.  Peile,  3  B.  &  Al.  616;  Parkist  v.  Alex- 
ander, 1  Johns.  Ch.  394.  As,  where  the  authority  is  in  writing.  Attwood  v.  Mnnnings, 
7  B.  &  C.  278;  Johnston  v.  Usborne,  11  A.  &  E.  557;    Schimmelpennich  v.  Bayard, 

1  Pet.  264  :  Delafield  v.  Illinois,  26  Wend.  192. 

2  Clarke  ;•.  Perrier,  2  Ereera.  48  ;  Prince  v.  Clark,  1  B.  &  C.  186  ;  Owsley  v.  Wool- 
hopter,  14  Geo.  124. 

a  Prince  v.  Clark,  1  B.  &  Cr.  186;  Cornwal  r.  Wilson,  1  Ves.  Sen.  509. 

*  Cornwal  v.  Wilson,  1  Ves.  Sen.  .509;  per  Lord  Eldon,  in  Kemp  v.  Pryor,  7  Ves. 
240,  247 ;  per  Bm/lcy,  J.,  in  Prince  v.  Clark,  1  B.  &  Cr.  190. 

5  Westropp  V.'  Solomon,  8  C.  B.  345  ;  D'Arcy  v.  Lyle,  5  Binn.  441 ;  Ramsay  v. 
Gardner,  11  Johns.  439 ;  Powell  v.  The  Trustees  of  Newburgh,  19  id.  284;  Hill  v. 
Packard,  5  AVend.  375  ;  Kogers  v.  Knceland,  10  id.  218 ;  Gower  v.  Emery,  18  Maine,  79. 

•^  Adamson  v.  Jarvis,  4  Bing.  66  ;  Belts  v.  Gibbins,  2  A.  &  E.  57  ;  Allaire  v.  Onland, 

2  Johns.  Cas.  56;  Coventry  v.  Barton,  17  Johns.  142;  Avery  v.  Halsey,  14  Pick. 
174. 

■  Coombc's  case,  9  Rep.  75,  b,  76,  a;  Schmaling  v.  Thomlinson,  6  Taunt.  147  ;  Tip- 
pets V.  Walker,  4  Mass.  595;  Stoughton  v.  Baker,  4  Mass.  522;  Emerson  v.  Provi- 
dence Manuf.  Co.  12  Mass.  237;  Brewster  v.  Ilobart,  15  Pick.  302;  Lyon  v.  Jerome, 
26  Wend.  485;  Hunt  v.  Douglass,  22  Vt.  128;  Andover  v.  Grafton,  7  N.  H.  304; 
Dispatch  Line  v.  Bellamy  Manuf.  Co.  12  N.  H.  228;  Wilson  v.  York  and  Maryland 
Line  R.  R.  Co.  11  G.  &  J."74.  A  broker  cannot  delegate  his  authority.  Cockran  v. 
Irlam,  2  M.  &  S.  301,  note;  Henderson  v.  Barnewall,  1  Y.  &  Jerv.  387.  Nor  can  a 
factor.  Solly  v.  Rathbonc,  2  M.  &  S.  298;  Catlin  v.  Bell,  4  Camp.  183;  Warner  v. 
Martin,  11  How.  209.  But  the  power  to  perform,  a  merely  ministerial  act,  involving 
the  exercise  of  no  discretion,  may  be  delegated.  Mason  v.  Joseph,  1  Smith,  406,  per 
Lord  EUenhorougli ;  Lvon  v.  Jerome,  26  AVend.  485  ;  Commercial  Bank  of  Lake  Erie  v. 
Norton,  1  Hill,  501  ;  Powell  v.  Tuttle,  3.  Comst.  396;  Gillis  v.  Bailey,  1  Foster,  149. 
See  Blore  v.  Sutton,  3  Meriv.  237.  So,  where  the  appointment  of  a  sub-agent  is  neces- 
sary and  according  to  usage.  Moon  v.  Guardians  of  Witney  Union,  3  Bing.  N.  C. 
8I4';  Dorchester  and  Milton  Bank  v.  New  England  Bank,  I'Cush.  177;  Warner  v. 
Martin,  11  How.  224.  Thus,  a  consignee  or  agent  for  the  sale  of  merchandise  may 
employ  a  broker  for  the  purpose,  when  such  is  the  usual  course  of  business.  Trueman 
V.  Loder,  1 1  Ad.  &  El.  589  ;  Warner  v.  Martin,  1 1  How.  223.     The  unauthorized  ap- 


156  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  X. 

appointed  without  such  authority,  is  only  the  agent  of  the  agent, 
and  not  of  the  principal.^ 

An  agent  is  bound  to  use,  in  the  affairs  of  hris  principal,  all 
that  care  and  skill  which  a  reasonable  man  would  use  in  his  own. 
And  he  is  also  bound  to  the  utmost  good  faith.^  Where,  how- 
ever, an  agent  acts  gratuitously,  without  an  agreement  for  com- 
pensation, or  any  legal  right  to  compensation  growing  out  of  his 
services,  less  than  ordinary  diligence  is,  in  general,  required  of 
him,  and  he  will  not  be  held  responsible  for  other  than  gross 
negligence.3  gul;  g,  gratuitous  agent  will  be  held  responsible  for 
property  intrusted  to  him.*  For  any  breach  of  duty,  an  agent 
is  responsible  for  the  whole  injury  thereby  sustained  by  his  prin- 
cipal; and,  generally,  a  verdict  against  the  principal  for  miscon- 
duct of  the  agent,  measures  the  claim  of  the  principal  againsi 
the  agent.^  The  loss  must  be  capable  of  being  made  certain 
and  definite ;  and  then  the  agent  is  responsible  if  it  could  not 
have  happened  but  for  his  misconduct,  although  not  imme- 
diately caused  by  it.*^  If  any  agent  embezzles  his  employer's 
property,  it  is  quite  clear  that  the  employer  may  reclaim 
it  whenever  he  can  distinctly  trace  and  identify  it.  But  if 
it  be  blended  indistinguishably  with  the  agent's  ov^'n  goods,  and 
the  agent  die  or  become  insolvent,  the  principal  can  claim 
only  as  a  common  creditor,  as  against  other  creditors;'^  but  as 


pointmcnt  of  a  sub-agent,  when  ratified  by  the  principal,  binds  him  in  the  same  manner 
as  if  originally  autliorized.  Doe  d.  Rhodes  v.  KoViinson,  3  Bing.  N.  C.  677  ;  Mason  v. 
Joseph,  1  Smith,  400;   McKenzie  v.  Nevius,  22  Maine,  138. 

1  Cobb  V.  Beekc,  6  Q.  B.  930 ;  Stephens  v.  Badcock,  3  B.  &  Ad.  354.  But  if  the  ap- 
pointment was  authorized  expressly  or  by  implication,  the  sub-agent  is  the  agent  of  the 
principal.     McKenzie  v.  Nevius,  22  Maine,  138;  Wilson  v.  Smith,  3  How.  763. 

'^  Co.  Litt.  89,  a;  Chapman  v.  AValton,  10  Bing.  57;  Lawler  v.  Keaquick,  1  Johns. 
Cas.  174  ;  Kingston  v.  Kincaid,  1  Wash.  C.  C.  454. 

3  Doorman  v.  Jenkins,  2  A.  &  El.  256;  Balfe  v.  West,  22  Eng.  Law  and  Eq.  506; 
Lyon  V.  Tarns,  6  English,  (Ark.)  189.  Unless  such  person  holds  himself  out  as  exer- 
cising one  of  certain  i)rivileged  professions  or  trades,  as  that  of  attorney,  in  which  case, 
it  seems,  he  will  be  bound  to  exercise  the  skill  appropriate  to  such  trade  or  profession. 
Dartnall  v.  Howard,  4  B.  &  C.  345  ;  Shiells  v.  Blackburne,  1  H.  Bl.  158;  Lanphier  v. 
Phipos,  8  C.  &  B.  479  ;  Denew  v.  Daverell,  3  Camp.  451.  See  Wilson  v.  Brett,  II  M. 
&  W.  113;  1  Parsons  on  Contracts,.pp.  73,  581-586. 

*  Stewart  ('.  Frazier,  5  Ala.  114. 

6  Mainwaring  v.  Brandon,  8  Taunt.  202 ;  Green  v.  N.  R.  Co.  4  T.  R.  589. 

6  Park  I'.  Hamond,  4  Camp.  344,  6  Taunt.  495;  Mallough  v.  Barber,  4  Camp.  150; 
Smith  V.  Lascalles,  2  T.  R.  187  ;  Davis  v.  Garrett,  6  Bing.  716;  Sliort  v.  Skipwith,  1 
Brock.  103  ;  De  Tastctt  v.  Crousillat,  2  Wash.  C.  C.  132  ;  Morris  v.  Summerl,  2  id.  203  ; 
Hays  V.  Stone,  7  Hill,  136.  But  the  loss  must  be  capable  of  being  ascertained  with 
reasonable  certainty.  Webster  v.  De  Tastet,  7  T.  R.  157;  The  Amiable  Nancy,  3 
Wheat.  560 :  Bell  v.  Cunningham,  3  Pet.  84,  85  ;  Smith  v.  Condry,  1  How.  28. 

■f  Thompson  v.  Perkins,  3  Mason,  232. 


CH.  X.]  AGENCY.  157 

against  the  factor  himself,  the  whole  seems  to  belong  to  the 
principal.' 

An  agent  employed  to  sell  property,  cannot  buy  it  himself; ^ 
and  if  employed  to  buy,  he  cannot  buy  of  himself,  unless  ex- 
pressly authorized  to  do  so.*^  Nor  can  a  trustee  purchase  the 
property  he  holds  in  trust  for  another.'^ 

Among  the  obvious  duties  of  all  agents  is  that  of  keeping  an 
exact  account  of  their  doings,  and  particularly  of  all  pecuniary 
transactions.^  After  a  reasonable  time  has  elapsed,  the  court 
will  presume  that  such  an  account  was  rendered,  accepted,  and 
settled.*^  Otherwise,  every  agent  might  always  remain  liable  to 
be  called  upon  for  such  account.  Moreover,  he  is  liable  not  only 
for  the  balances  in  his  hands,  but  for  interest,'^  or  even,  where 
there  has  been  a  long  delay  to  the  profit  of  the  agent,  he  might, 

'  Lupton  V.  'White,  15  Vcs.  436  ;  Chcdworth  v.  Edwards,  8  id.  46 ;  Wren  v.  Kirton, 
11  Ves.  377  ;  Hart  v.  Ten  Eyck,  2  Jolins.  Ch.  62. 

-  Wren  v.  Kirton,  8  Ves.  502;  Morse  v.  Royal,  12  id.  355;  Charter  v.  Trevelyan, 
11  CI.  &-Fin.  714;  Moore  v.  Moore,  1  SeUlcn,  256;  Church  i-.  Sterling,  16  Conn.  400; 
Bartholomew  v.  Leech,  7  Watts,  472;  Baker  v.  Whiting,  3  Sumner,  476  ;  Copehind  v. 
Mercantile  Ins.  Co.  6  Pick.  204.  A  sub-agent  is  under  the  same  disability.  Baker  v. 
Whiting,  1  Story,  241.  Nor  can  the  agent  of  a  ])rincii)al,  authorized  to  sell,  purchase 
for  another.  Hawley  v.  Cramer,  4  Cow.  717;  Harrison  r.  McHenry,  9  Geo.  164.  If 
an  agent  or  attorney  is  entitled  to  purchase,  yet  if,  instead  of  openly  purchasing,  he 
jiurcliase  in  the  name  of  a  trustee  or  agent  without  disclosing  the  fact,  no  such  purcliase 
can  stand.     Lewis  v.  Ilillinan,  3  House  of  Lords'  Cases,  630. 

=*  Lees  V.  Nuttall,  2  M.  &  K  819 ;  Taylor  v.  Salmon,  4  M.  &  Cr.  139. 

*  Nesbitt  V.  Tredennick,  1  Ball  &.  Beatty,  46,  47  ;  De  Caters  v.  Le  Roy  De  Chaumont, 

3  Paige,  178;  Slade  v.  Van  Vetchcn,  11  Paig«,  26. 

5  Lord  Chcdworth  v.  Edwards,  8  Ves.  49;  Lady  Ormond  v.  Hutchinson,  13  id.  47; 
Lord  Hardwicke  r.  Vernon.  14  id.  510:  Lupton  v.  White,  15  id.  436 ;  Pearse  v.  Green, 
1  Jac.  &  Walker,  135;  Collyer  v.  Dudley,  Turn.  &  Russ.  421;  Clark  v.  Moody,  17 
Mass.  148.  A  servant,  intrusted  with  money  for  the  payment  of  trademen's  bills,  it  is 
said,  is  not  liable  to  account.  Terry  v.  Wacher,  15  Sim.  448.  Nor  is  the  agent  of  an 
agent,  who  is  not  the  sub-agent  of  the  principal,  accountable  to  the  principal.  Stephens 
V.  Badcock.  3  B.  &r  Ad.  354  ;    Cartwright  r.  Hateley,  1  Ves.  Jr.  292  ;  Sims  r.  Brittain, 

4  B.  &  Ad.  375 ;  Tripler  v.  Olcot,  3  Johns.  Ch.  473.  A  demand  by  the  principal 
must  precede  an  action  against  an  agent  for  not  accounting  or  for  not  paying  over  the 
proceeds  of  a  safe  or  money  collected.  Topliam  v.  Braddick,  1  Taunt.  572;  Taylor  v. 
Bates,  5  Cow.  376 ;  Rathbun  r.  Ingalls,  7  Wend.  320  ;  Brink  v.  Dolsen.  8  Barb.  337 ; 
Hall  V.  Pecke,  10  Vt.  474;  Hutchins  v.  Gilman,  9  N.  H.  359  ;  Sally  v.  Capps,  1  Ala. 
121  ;  Potter  V.  Sturges,  1  Dev.  79:  White  v.  Miller,  3  Dev.  &  Batt,  55;  State  v.  Sugg, 
3  Iredell,  96;  Waring  r.  Richardson,  11  id.  77;  Armstrong  r.  Smith,  3  Blackf.  251  ; 
Judali  v.  Dyott,  3  id.  324.  But  no  demand  is  necessary  where  the  agent  denies  his 
agency,  or  uin-easonably  neglects  to  account,  or  is  otherwise  in  default.  Tillottson  v. 
McCr'illis,  11  Vt.  477;  Ferris  v.  Paris,  10  Johns.  285;  Cooley  v.  Betts,  24  Wend.  203; 
Wait  V.  Gibbs,  7  Pick.  146;  Langley  v.  Sturtevant,  7  id.  214;  Witherup  v.  Hill,  9  S. 
&  K.  II. 

*^    Topham  v.  Braddick,  1  Taunt.  572. 

7  Brown  v.  Southou'^e,  3  Bro.  C.  C.  107;  Williams  v.  Storrs,  6  Johns.  Ch.  353; 
People  V.  Gasherie,  9  Johns.  71;  Dodge  v.  Perkins,  9  Pick.  368.  So  the  principal  is 
entitled  to  all  increase  or  profit  made  by  the  agent  in  the  use  of  the  principal's  prop- 
ertv.  Diplock  v.  Blackburn,  3  Camp.  43  ;  Brown  r.  Litton,  1  P.  Wms.  141 ;  Massey 
V.  bavies,  2  Ves.  Jr.  317  ;  Hays  i'.  Stone,  7  Hill,  135. 

14 


158  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

perhaps,  be  liable  for  compound  interest,  on  the  same  ground  on 
which  it  has  been  charged  in  analogous  cases  against  executors, 
trustees,  and  guardians.^  No  interest  whatever  would  be  charged 
if  such  were  the  intention  of  the  parties,  or  the  effect  of  the  bar- 
gain between  them  ;  and  this  intention  may  be  inferred  either 
from  direct  or  circumstantial  evidence, —  as  the  nature  of  the 
transaction,  or  the  fact  that  the  principal  knew  that  the  money 
lay  useless  in  the  agent's  hands,  and  made  no  objection  or 
claim.^ 

Although,  as  we  have  seen,  the  revocation  of  authority  is  gen- 
erally within  the  power  of  the  principal,  an  agent  ought  not  to 
suffer  damage  from  acting  under  a  revoked  authority,  if  the  revo- 
cation were  wholly  unknown  to  him  without  his  fault.^  But 
where  his  authority  was  only  a  general  one,  he  has  been  held 
liable  to  the  assignees  for  acts  done  by  him  after  his  principal's 
bankruptcy.* 

One  requested  to  act  as  agent,  and  agreeing  to  do  so,  but  not 
beginning  his  work,  nor  being  intrusted  with  property  for  the 
employment,  is  not  liable  for  not  doing  what  he  undertakes, 
unless  he  has  a  consideration  for  his  undertaking.^ 


SECTION  IX. 

OF   FACTORS   AND   BROKERS. 

All  agents  who  sell  goods  for  their  principals,  and  guarantee 
the  price,  are  said  abroad  to  act  under  a  del  credere  comfnission.^ 

1  See  1  Parsons  on  Cont.  103,  115;  Ackerman  v.  Emott,  4  Barb.  626. 

2  Beaumont  v.  Boultbee,  11  Ves.  360  ;  Kogcrs  v.  Boehm,  2  Esp.  704;  Williams  v. 
Storrs,  6  Johns.  Ch.  353. 

3  United  States  v.  Jarvis,  Davies,  287.  In  this  case  it  was  held,  by  Ware,  J.,  that 
the  power  of  an  agent  may  be  revoked  at  any  time  by  the  principal  without  notice  ;  but 
if  the  aiient,  in  the  prosecution  of  the  business  of  his  principal,  has  fairly  and  in  good 
faith,  before  notice  of  the  revocation  of  liis  powers,  entered  into  any  engagements  or 
come  under  any  liabilities,  the  principal  will  be  bound  to  indemnify  him.  So  an  agent, 
after  accepting  an  agency,  cannot  renounce  it  at  pleasure,  without  notice  or  good  cause, 
without  rendering  himself  responsible  for  any  loss  which  may  thereby  be  sustained  by 
the  principal. 

*  Pearson  v.  Graham,  6  A.  &  Ell.  899. 

5  Elsee  V.  Gatward,  5  T.  R.  143  ;  Balfe  v.  West,  22  Eng.  Law  and  Eq.  506 ;  Thome 
V.  Deas,  4  Johns.  84. 

•»  A  del  credere  commission  confers  no  additional  power  on  the  fiictor.  Morris  v. 
Cleasby,  4  M.  &  S.  566 ;  Thompson  v.  Perkins,  3  Mason,  232.  But  it  does  in  the  case 
of  a  broker.    White  v.  Chouteau,  10  Barb.  202. 


I 


en.  X.]  AGENCY.  159 

In  this  country,  this  phrase  is  seldom  used,  nor  is  such  guaranty 
usually  given,  except  by  commission  merchants.  And  where 
such  guaranty  is  given,  the  factor  is  still  but  a  surety,  so  far  that 
his  employers  must  first  have  recourse  to  the  principal  debtor.' 
But  his  promise  is  not  "a  promise  to  pay  the  debt  of  another," 
within  the  Statute  of  Frauds.-  Nor  does  he  guarantee  the  safe 
arrival  of  the  money  received  by  him  in  payment  of  the  goods, 
and  transmitted  to  his  employer,  but  must  use  proper  caution  in 
sending  it.^  If  he  takes  a  note  from  the  purchaser,  this  note  is 
his  employer's;^  and  if  he  takes  depreciated  or  bad  paper,  he 
must  make  it  good.^ 

A  broker  or  factor  is  bound  to  the  care  and  skill  properly  be- 
longing to  the  business  which  he  undertakes,  and  is  responsible 
for  the  want  of  it.^ 

A  factor  intrusted  with  goods,  may  pledge  them  for  advances 
to  his  principal,  or  for  advances  to  himself  to  the  extent  of  his 
lien." 

The  mere  wishes  or  intimations  of  his  employer  bind  him  only 
so  far  as  they  are  instructions ;  ^  these  he  must  obey ;  but  may 

'  Pecle  17.  Nortlicote,  7  Taunt.  478;  Gall  v.  Comber,  7  id.  558;  Thompson  v.  Per- 
kins, 3  Mason,  232 ;  Wolff  v.  Koppel,  5  Hill,  458,  2  Denio,  368.  In  which  last  case 
conflicting  opinions  were  given.  The  contrary  doctrine  seems  to  have  prevailed  at  an 
early  date,  which  made  tlie  factor  liable  absolutely  and  in  the  first  instance.  Grove  v. 
Dubois,  1  T.  R.  112;  Haughton  v.  Matthews,  3  B.  &  P.  485;  Leverick  v.  Meigs,  1 
Cow.  663,  664.  "  The  selling  under  a  del  credere  commission,  while  it  secures  the 
amount  of  the  sales  to  the  principal,  does  not  in  law  require  the  factor  to  anticipate  the 
credit;  and  the  principal  is  only  entitled  to  have  the  amount  passed  to  his  credit  when 
the  sale  is  matured."     Per  Hubbard,  J.,  in  Upham  v.  Lefiivour,  II  Met.  185. 

2  Swan  V.  Nesmith,  7  Pick.  220  ;  Wolff  v.  Koppell,  5  Hill,  458,  2  Denio,  368 ;  Bradley 
V.  Richardson,  23  Vt.  731,  732  ;  Couturier  v.  Hastie,  16  Eng.  Law  and  Ex.  562,  8  Exch. 
40 ;  2  Parsons  on  Cont.  307. 

#3  IMuhler  v.  Bohlens,  2  Wash.  C.  C.  378.  But  see  Lucas  v.  Groning,  7  Taunt.  164; 
Mackenzie  v.  Scott,  6  Bro.  P.  C.  280. 

*  West  Boylston  Manuf.  Co.  v.  Searle,  15  Pick.  225 ;  Pitts  v.  Mower,  18  Maine,  361. 

5  Dunnell  v.  Mason,  1  Story,  543. 

6  See  ante.  p.  156,  n.  3;  Vera  v.  Smith,  1  Vent.  121. 

■?  M'Combie  v.  Davies,  7  East,  5 ;  Solly  v.  Rathbone,  2  M.  &  S.  298 ;  Pultney  v. 
Keymer,  3  Esp.  182;  Urquhart  v.  Mclver,  4  Johns.  116;  W.arner  v.  Martin,  11  How. 
225.  So,  an  innocent  pledgee  may  hold  the  pledge  where  the  owner  has  held  for  the 
agent  as  principal.  Boyson  v.  Coles,  6  M.  &  S.  14 ;  Williams  v.  Barton,  3  Bing.  139 ; 
Warner  v.  Martin,  supra.  The  power  of  a  factor  to  pledge  the  goods  of  his  principal 
has  recently  been  enlarged,  by  statute,  in  England  and  in  many  of  our  States.  See 
1  Parsons  on  Cont.  50,  n.  (g). 

8  Brown  i'.  M'Gran,  14  Pet.  480.  In  Marfield  v.  Douglass,  1  Sandf  360,  405,  S.  C, 
mm.  Marfield  v.  Goodhue,  3  Comst.  62,  a  principal  wrote  to  his  factor,  giving  his 
views  of  the  propable  supply  of  the  article  consigned,  and  stating  facts  which  indicated 
a  short  supply.  In  conclusion  he  said :  "I  have  thought  it  best  for  you  to  take  my 
pork  out  of  the  market  for  the  present,  as  thirty  days  will  make  an  important  change 
in  the  value  of  the  article."  It  was  held  that  the  letter  constituted  instructions  to  the 
factor  to  withhold  the  property  fror^^^ale  until  the  receipt  of  further  directions.     So,  of 


160  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 

still,  as  we  have  already  stated,  depart  from  their  letter,  if  in  good 
faith,  and  for  the  certain  benefit  of  his  employer,  in  an  unforeseen 
exigency.'  Having  possession  of  the  goods,  he  may  insure  them ; 
but  is  not  bound  to  do  so,  nor  even  to  advise  insurance;  unless 
requested,  or  unless  a  distinct  usage  makes  this  his  duty.^  He 
has  much  discretion  as  to  the  time,  terms,  and  manner  of  a  sale, 
but  must  use  this  discretion  in  good  faith.  For  a  sale  which  is 
precipitated  by  him,  without  reason  and  injuriously,  is  void,  as 
unauthorized.^  If  he  send  goods  to  his  principal  without  order, 
or  contrary  to  his  duty,  the  principal  may  return  them,  or  in  good 
faith  and  for  the  benefit  of  the  factor,  may  sell  them  as  the  fac- 
tor's goods.* 

Although  a  factor  have  no  del  credere  commission,  he  is  liable 
to  his  principal  for  his  own  "default ;  or  if  he  sells  on  credit,  and, 
when  it  expires,  takes  a  note  to  himself;^  but  if  he  takes  at  the 
time  of  the  sale  a  negotiable  note  from  a  party  in  fair  credit,  and 
the  note  is  afterward  dishonored,  this  is  the  loss  of  his  em- 
ployer, unless  the  factor  has  guaranteed  it.*"  If  he  sells  the  goods 
of  many  owners  to  one  purchaser,  taking  a  note  for  the  whole 
to  himself,  and  gets  it  discounted  for  his  own  use  or  accommo- 
dation, he  is  then  liable  for  the  payment  of  that  note.'^  So,  if  he 
gets  discounted  for  his  own  use  a  note  taken  wholly  for  his  prin- 
cipal's goods.s     But  he  may  discount  them  to  reimburse  himself 


a  similar  letter,  saying  :  "  But  thirty  days  will  tell  the  story ;  with  these  facts  before 
me,  I  have  thought  best  to  hold  on  to  my  pork,  and  I  wish  you  to  take  it  out  of  the 
market  for  the  present."  And  Sandford,  J.,  said  :  "  In  our  view,  the  letters  were  not 
ambiguous,  nor  calculated  to  mislead  the  defendants.  Tliey  contain  a  plain  direction 
to  withhold  the  plaintiff's  pork  from  the  market ;  not  couched  in  imperious  or  abrupt 
language,  which  was  wholly  unnecessary  ;  but  in  such  language  as  any  courteous  map 
would  use  to  another,  expressing  a  decisive  wish  and  conclusion  that  his  pork  should 
be  withheld  from  sale.  This  constituted  instructions  from  tlie  principal  to  the  factors 
to  pursue  the  course  indicated." 
'  See  ante,  p.  154,  n.  3. 

2  De  Forest  v.  The  Fire  Ins.  Co.  1  Hall,  84 ;  Brisban  v.  Boyd,  4  Paige,  17. 

3  Shaw  V.  Stone,  1  Cush.  228,  248. 

*  Kemp  V.  Pryor,  7  Ves.  Jr.  237  ;  Cornwal  v.  Wilson,  1  Ves.  Sr.  509. 

^  Hosmer  v.  Beebc,  14  Martin,  368.     And  see  ante,  p.  154,  n.  3. 

^  Goodenow  v.  Tyler,  7  Mass.  36;  Grecly  v.  Bartlett,  1  Greenl.  172:  Rogers  v. 
White,  6  id.  193;  Goldthwaite  v.  M'Whorter,  5  Stew.  &  Port.  284;  Kidd  v.  King,  5 
Ala.  84  ;  Messier  v.  Amery,  1  Yeates,  540;  Towns  v.  Birchett,  12  Leigh,  173  ;  Hamil- 
ton V.  Cunningham,  2  Brock.  350.  The  mere  taking  by  the  factor  of  a  note  payable  to 
himself,  which  includes  the  purchase-money  of  goods  belonging  to  several  principals, 
does  not  render  the  factor  personally  liable  for  the  maker's  solvency.  Corlies  v.  Gum- 
ming, G  Cow.  181.  So,  where  the  note  includes  a  debt  due  to  the  principal,  and  a  debt 
due  to,  himself.     Ilapgood  v.  Batciieller,  4  Met.  573. 

■^  Johnson  v.  O'Hara,  5  Leigh,  456;  Byrne  v.  Schwing,  6  B.  Monr.  199. 

8  Myers  v.  Eatriken,  6  W.  &  S.  44.     See  Wreii,  v.  Kirton,  1 1  Ves.  382. 


CH.  X.]  AGENCY.  161 

for  advances,  without  making  himself  liable.^  If  he  sends  his 
own  note  for  the  price  to  his  employer,  he  must  pay  it.^ 

A  factor  may  have  a  claim  against  a  purchaser  founded  on  his 
lien  upon  the  goods  for  advances,  while  the  principal  has  a  claim 
for  the  price.  But,  generally,  a  purchaser,  paying  either  principal 
or  factor,  will  be  protected  against  the  other,  unless  he  had 
knowledge  or  notice  of  the  adverse  valid  claim  of  the  other.^ 

As  a  factor  has  possession  of  the  goods,  he  may  use  his  own 
name  in  all  his  transactions,  even  in  suits  at  law;  but  a  broker 
can  buy,  sell,  receipt,  &c.,  only  in  the  name  of  his  employer.* 
So,  a  factor  has  a  lien  on  the  goods  in  his  hands,  for  his  advances, 
his  expenses,  and  his  commissions,  and  for  the  balance  of  his 
general  account.  And  the  factor  may  sell  from  time  to  time, 
enough  to  cover  his  advances,  unless  there  be  something  in  his 
employment  or  in  his  instructions,  from  which  it  may  be  inferred 
that  he  had  agreed  not  to  do  so.^  But  a  broker,  having  no  pos- 
session, has  no  Tien.  The  broker  may  act  for  both  parties,  and 
often  does  so.*^  But,  from  the  nature  of  his  employment,  a  factor 
should  act  only  for  the  party  employing  hira.'^  A  broker  has  no 
authority  to  receive  payment  for  the  goods  he  sells,  unless  that 
authority  be  given  him,  expressly  or  by  implication.^     Nor  will 

1  Towns  V.  Birchett,  12  Leigh,  173. 

'^  Simpson  v.  Swan,  3  Camp.  291  ;  Le  Fever  v.  Lloyd,  5  Taunt.  749;  Goupy  v. 
Harden,  7  id.  159;  Jackson  v.  Bossonette,  24  Vt.  611.  See  Shaw  v.  Picton,  4  B.  &  C. 
715. 

3  Drinkwater  v.  Goodwin,  Cowper,  251 ;  Coppin  v.  Craig,  7  Taunt.  243;  Hudson  v. 
Granger,  5  B.  &  Aid.  27 ;  Atkyns  v.  Amber,  2  Esp.  493. 

*  Baring  v.  Corrie,  2  B.  &  Aid.  137,  143,  148;  Warner  v.  M'Kay,  1  M.  &  "W.  591. 
But  a  broker  may  act  in  his  own  name,  if  he  is  specially  authorized  so  to  act.  Kemble 
V.  Atkins,  7  Taunt.  260.  If  he  has  made  advances  on  the  goods  sold  by  him,  or  guar- 
anteed the  sale,  he  may  sue  in  his  own  name.  Grove  v.  Dubois.  1  T.  R.  112;  Atkyns 
t'.  Amber,  2  Esp.  493;  Buckbec  v.  Brown,  21  Wend.  110;  White  v.  Chouteau,  10 
Barb.  202. 

*  Brown  v.  McGran,  14  Pet.  479 ;  Parker  v.  Brancker,  22  Pick.  40 ;  Frothingham 
r.  Everton,  12  N.  H.  239;  Blot  v.  Briceau,  3  Comst.  78;  Marfield  v.  Goodhue,  1  Sandf. 
360,  3  Comst.  62  ;  Porter  v.  Patterson,  15  Penn.  St.  229.  See  Smart  v.  Sandars,  3  C. 
B.  380,  5  id.  895.  In  Upham  v.  Lefavour,  11  Met.  174,  it  was  held  that  a  factor  who 
makes  advances  on  goods  consigned  to  him,  may  maintain  an  action,  before  the  goods 
are  sold,  to  recover  the  money  advanced,  unless  there  is  an  agreement  to  the  contrary. 

6  Colvin  V.  Williams,  3  H.  &  J.  38. 

■^  Rucker  v.  Cammeyer,  1  Esp.  105;  Hinde  z;.  Whitehouse,  7  East,  558,  569  ;  Hender- 
son V.  Barnewall,  1  You.  &  Jerv.  387  ;  Beal  v.  M'Kiernan,  6  Louis.  417. 

s  Baring  v.  Corrie,  2  B.  &  Aid.  137;  Campbell  v.  Hassell,  1  Stark.  233.  An  insur- 
ance broker  may  receive  payment,  but  only  in  money,  and  cannot  set  off  a  debt  due 
from  himself  to  the  purchaser.  Todd  v.  Rcid,  4  B.  &  Aid.  210;  Russell  v.  Bangley, 
4  id.  395  ;  Bartlett  v.  Pentland,  10  B.  &  C.  760  ;  Scott  v.  Irving,  1  B.  &  Ad.  605. 
Payment  to  the  broker  is  good  if  the  principal  has  held  him  out  as  the  owner.  Camp- 
bell V.  Hassell,  s«/)ra ;  Morris  v.  Cleasby,  1  M.  &  S.  566;  Coates  v.  Lewis,  1  Camp. 
444 ;  Favenc  v.  Bennett,  1 1  East,  36  ;  Kemble  v.  Atkins,  7  Taunt.  260. 

14* 


162  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  X. 

payment  to  a  factor  discharge  a  debtor  who  has  received  notice 
from  the  principal  not  to  make  such  payment.^ 

Generally,  neither  factor  nor  broker  can  claim  their  commis- 
sions until  their  whole  service  be  performed,  and  in  good  faith, 
and  with  proper  skill,  care,  and  industry.^  But  if  the  service  be- 
gins, and  is  interrupted  wholly  without  their  fault,  they  may 
claim  a  proportionate  compensation.^  If  either  bargains  to  give 
his  whole  time  to  his  employer,  he  will  not  be  permitted  to  derive 
any  compensation  for  services  rendered  to  other  persons.*  Nor 
can  either  have  any  valid  claim  against  any  one  for  illegal  ser- 
vices, or  those  which  violate  morality  or  public  policy.^ 

A  principal  cannot  revoke  an  authority  given  to  a  factor,  after 
advances  made  by  the  factor,  without  repaying  or  securing  the 
factor.^ 

The  distinction  between  a  foreign  and  a  domestic  factor  is 
quite  important.  A  domestic  factor  is  one  who  is  employed  and 
acts  in  the  same  country  with  his  principal.  A  foreign  factor  is  , 
one  employed  by  a  principal  who  lives  in  a  different  country. 
And  a  foreign  factor  is  as  to  third  parties  —  for  most  purposes 
and  under  most  circumstances  —  a  principal.  Thus,  they  cannot 
sue  the  principal,  because  they  are  supposed  to  contract  with 
the  factor  alone,  and  on  his  credit,  although  the  principal  may 
sue  them; 7  and  a  foreign  factor  is  personally  liable,  although  he 

1  Moore  v.  Clementson,  2  Camp.  22;  Gardiner  v.  Davis,  2  C.  &  P.  49;  Hornby  v. 
Lacy,  6  M.  &  S.  166;  Edmond  v.  Caldwell,  15  Maine,  340.  Payment  to  an  agent 
authorized  to  receive  it,  may  be  made  before  it  becomes  due.  Patten  v,  FuUerton,  27 
Maine,  58. 

"  Hamond  v.  Holiday,  1  C.  &  P.  384  ;  Dalton  v.  Irvin,  4  id.  289;  Broad  v.  Thomas, 
7  Bing.  99  ;  Read  v.  Kann,  10  B.  &  C.  438;  Hill  ;;.  Kitching,  3  C.  B.  299.  And  the 
factor's  negligence  may  be  given  in  evidence  to  reduce  his  compensation,  or  bar  all 
claim  therefor.  Hamond  v.  Holiday,  supra;  Denew  v.  Daverell,  3  Camp.  451  ;  Money- 
penny  V.  Hartland,  1  C.  &  P.  352;  White  v.  Chapman,  1  Stark.  113 ;  Hurst  v.  Holding, 

3  Taunt.  32;  Shaw  v.  Ardcn,  9  Bing.  287;  Dodge  v.  Tileston,  12  Pick.  328. 
^  See  cases  supra.    And  see  furthei-,  Fenton  v.  Clark,  11  Vt.  557;  Seaver  v.  Morse, 

20  id.  620 ;  Dickey  v.  Linscott,  20  Maine,  453  ;  Fuller  v.  Brown,  11  Met.  440. 

■>  Thompson  v.  Havelock,  1  Campb.  527;  Gardner  u.  M'Cutcheon,  4  Beavan,  534. 
5  Haines  v.  Busk,  5  Taunt.  521  ;  Joseph  v.  Pebrer,  3  B.  &  C.  639  ;  Waldo  v.  Martin, 

4  id.  319.  But  where  the  employment  of  the  agent,  which  was  occasioned  by  an  illegal 
enterprise,  is  subsequent  to  and  disconnected  with  the  illegality,  he  may  recover  his 
compensation.  Toler  v.  Armstrong,  4  Wash.  C.  C  297,  11  Wheat.  258;  Wooten  v. 
Miller,  7  S.  &  M.  380;  Howell  v.  Fountain,  3  Geo.  176. 

«  Brown  v.  McGran,  14  Pet.  479,  495;  Marfield  v.  Goodhue,  3  Comst.  62;  Blot  v. 
Boiceau,  3  Comst.  78.  But  see  Smart  v.  Sandars,  5  C.  B.  895 ;  Raleigh  v.  Atkinson, 
6  M.  &  W.  670. 

7  De  Gaillon  v.  Aigle,  1  B.  &  P.  368;  Gouzales  v.  Sladen,  Bull.  N.  P.  130;  Pater- 
son  V.  Gandasequi,  15  East,  62  ;  Addison  v.  Gandassequi,  4  Taunt.  574  ;  Thompson 
V.  Davenport,  9  B.  &  C.  78 ;  Merrick's  Estate,  5  W.  &  S.  9  ;  Newcastle  Manuf.  Co.  v. 
Red  River  R.  R.  Co.  1  Rob.  (La.)  145.     See  Smyth  v.  Anderson,  7  C.  B.  21. 


CH.  X.]  AGENCY.  163 

fully  disclose  his  agency,  and  his  principal  is  known.^  But  this 
doctrine  is  not  extended  to  cases  where  a  contract  for  personal 
services  is  made  in  the  country  where  the  factor  is  doing  busi- 
ness, by  a  person  resident  there,  but  the  contract  is  to  be  per- 
formed or  executed  in  the  country  where  the  principal  resides. 
For,  if  such  a  contract  be  made  in  the  name  of  the  principal,  he 
alone  is  responsible.^  One  who  deals  with  a  domestic  factor, 
may  sue  the  principal,  unless  it  is  shown  fliat  credit  was  given 
exclusively  to  the  factor.^  And  for  the  purpose  of  this  distinc- 
tion, and  the  rules  founded  upon  it,  we  hold,  on  the  weight  of 
authority,  that  our  States  are  foreign  to  each  other.* 

Every  factor  is  bound  to  reasonable  care ;  and  he  is  liable  for 
a  loss  by  fire,  or  robbery,  or  other  accid'ent,  occurring  without  his 
default,  if  he  had  previously  done  some  wrongful  act,  without 
which  the  property  might  have  been  safe.°  And  this  rule  would 
apply  even  to  a  gratuitous  agent.*^ 

1  McKenzie  v.  Nevius,  22  Maine,  138. 

2  Eogers  v.  March,  33  Maine,  106. 

3  Paterson  v.  Gandasequi,  15  East,  62;  Addison  v.  Gandassequi,  4  Taunt.  574. 

*  Kirkpatrick  v.  Stainer,  22  Wend.  244 ;  Taintor  v.  Prendergast,  3  Hill,  72.  Eng- 
land and  Scotland  do  not  seem  to  be  foreign  countries  in  respect  to  this  rule.  Thomp- 
son V.  Davenport,  9  B.  &  C.  78. 

5  Caffrey  v.  Darby,  6  Ves.  496 ;  Hays  v.  Stone,  7  Hill,  136 ;  Davis  v.  Garrett,  6 
Bing.  716;  Evans  v.  Boot,  3  Selden,  186. 

^  Stewart  v.  Frazier,  5  Ala.  114. 


164 


ELEMENTS    OF   MERCANTILE   LAW. 


[CH.  XI. 


CHAPTER   XI. 
PARTNERSHIP. 

SECTION  I. 


WHAT   A   PARTNERSHIP   IS. 

When  two  or  more  persons  combine  their  property,  labor,  or 
skill,  for  the  transaction  of  business  for  their  common  profit,^ 
they  enter  into  partnership.  Sometinhes  the  word  "  firm  "  is  used 
as  synonymous  with  partnership ;  sometimes,  however,  it  seems 
to  mean  only  the  copartnership-name. 

A  single  joint  transaction  out  of  which,  considered  by  itself, 
neither  profit  nor  loss  arises,  will  not  create  a  partnership.^  If  a 
joint  purchase  be  made,  and  each  party  then  takes  his  distinct 
and  several  share,  this  is  no  partnership.-^  But  it  seems  that 
there  will  be  a  partnership  if  the  joint  transactions  actually  and 
materially  enlarge  the  value  of  the  property,  although  the  respec- 
tive shares  are  divided  among  the  holders  without  a  sale.*  But 
a  joint  contract  to  do  a  piece  of  work,  if  the  price  for  it  is  to  be 
divided  immediately  among  those  entitled  to  it,  will  not  make 
them  partners.^ 

1  The  object  of  the  joint  transactions  must  be  the  common  profit.  Hence,  a  deed  of 
assignment  in  the  usual  form  to  trustees  for  the  benefit  of  creditors,  which  empowers 
the  trustees  to  carry  on  the  business  of  the  debtor,  for  the  purpose  of  closing  up  his 
affairs,  does  not  create  a  partnership  between  the  creditors.  Coate  v.  Williams,  9  Eng. 
Law  and  Eq.  481 ;  Janes  v.  Whitbread,  5  Eng.  Law  and  Eq.  431.  As  to  charitable 
associations  and  clubs,  see  Beaumont  v.  Meredith,  3  Ves.  &  B.  180 ;  Delauney  v.  Strick- 
land, 2  Stark.  416;  Flemyng  v.  Hector,  2  Mee.  &  W.  172. 

2  As,  if  tenants  in  common  give  a  joint  order  for  the  sale  of  their  property.  Jackson 
V.  Robinson,  3  Mason,  140.  See  Hall  v.  Leigh,  8  Cranch,  50;  Sims  v.  Willing,  8  Ser. 
&R.  103. 

3  Hoare  v.  Dawes,  Doug.  371 ;  Coope  v.  Eyre,  1  H.  Bl.  37 ;  Gibson  v.  Lupton,  9 
Bing.  297;  Post  v.  Kimberly,  9  Johns.  470;  Barton  v.  Williams,  5  B.  &  Aid.  395; 
Holmes  v.  United  Ins.  Co.  2  Johns.  Cas.  329  ;  Felichy  v.  Hamilton,  1  Wash.  C.  C.  491 ; 
Ballon  V.  Spenser,  4  Cow.  163  ;  Harding  v.  Foxcroft,  6  Greenl.  76 ;  Gilmore  v.  Black, 
2  Fairf  485;  Brady  v.  Calhoun,  1  Pennsyl.  140,  147. 

*  Everitt  v.  Chapman,  6  Conn.  347;    Musicr  v.  Trumpbour,  5  Wend.  275.     See 
Loomis  V.  Marshall,  12  Conn.  69;  Bucknam  v.  Barnum,  15  Conn.  73. 
5  Finch  V.  Stacy,  Select  Cas.  in  Ch.  9;  Porter  v.  M'Clure,  15  Wend.  187. 


CH.  XI.]  PARTNERSHIP.  165 

Any  persons  competent  to  transact  business  on  their  own  ac- 
count, may  enter  into  partnership  for  that  purpose ;  and  no 
others. 


SECTION  II. 

HOW   A   PARTNERSHIP  MAY  *BE   FORMED. 

No  especial  form  or  manner 'is  necessary.  It  may  be  by  oral 
agreement,  or  by  a  written  agreement,^  which  may  have  a  seal 
or  not.  But  the  liability  and  authority  of  the  partners  begins 
with  the  actual  formation  of  the  partnership,  and  does  not  wait 
for  the  execution  of  any  articles.^  In  general,  if  there  be  an 
agreement  to  enter  into  business,  or  some  particular  transactions, 
together,  and  share  the  profits  and  losses,  this  constitutes  a  part- 
nership, which  is  just  as  extensive  as  the  business  proposed  to  be 
done,  and  not  more  so.  The  parties  may  agree  to  share  the 
profits  in  what  proportion  they  choose ;  but  in  the  absence  of 
any  agreement,  the  law  presumes  equal  shares.^  So  they  may 
agree  as  to  any  way  of  dividing  the  losses,  or  even  that  one  or 
more  partners  alone  shall  sustain  them  all,  without  loss  to  the 

1  In  Smith  v.  Burnham,  3  Sumner,  435,  it  was  held,  by  Stonj,  J.,  that  a  partnership 
agreement  to  speculate  in  the  purchase  and  sale  of  land,  must,  under  the  Statute  of 
Frauds,  be  in  writing.  But  Ware,  J.,  in  re  Warren,  Daveis,  320,  held  that  a  written 
agreement  was  necessary  in  such  case  only  as  between  the  partners  themselves,  while, 
as  far  as  the  rights  of  third  persons  were  involved,  such  a  partnership  might  be  proved 
by  parol.  See  Ralph  v.  Harvy,  1  Q.  B.  845  ;  Vice  v.  Anson,  7  B.  &  Cress.  409.  And 
from  the  following  language  of  Ware,  J.,  in  the  case  above  cited :  "  If  the  partnership 
is  by  parol  only,  and  one  of  the  partners  makes  a  purchase  in  his  own  name,  but  in- 
tended for  the  benefit  of  the  firm,  the  other,  on  the  mere  ground  of  the  partnership,  that 
being  by  parol,  cannot  take  advantage  of  the  contract,  for  if  he  could,  he  would  acquire 
an  interest  in  land  by  parol,  directly  in  opposition  to  the  Statute  of  Frauds ; "  and  from 
the  recent  case  of  Smith  v.  Tarlton,  2  Barb.  Ch.  336,  it  seems  that,  if  one  purchases 
land  in  his  own  name,  another  cannot  take  advantage  of  it,  solely  on  the  ground  of  an 
oral  agreement  to  make  it  a  partnership  transaction  ;  but  if,  under  such  an  agreement, 
»the  property  is  actually  paid  for  out  of  the  joint  funds,  a  court  of  equity  will  decree  an 
account,  although  the  legal  title  is  in  one  alone.  See  Henderson  v.  Hudson,  1  Munf. 
510.  See  further.  Dale  v.  Hamilton,  5  Hare,  369.  The  general  principles  of  equity 
which  are  applied  to  the  real  estate  of  a  partnership,  will  be  considered  hereafter.  A 
partnership  was  entered  into  by  a  parol  agreement,  and  was  to  continue  three  years. 
Walworth  Ch.,  held  that  this  was  not  an  agreement  whicli  was  not  to  be  performed 
within  one  year;  so  as  to  require  it  to  be  in  writing,  under  the  Statute  of  Frauds. 
Smith  V.  Tarlton,  2  Barb.  Ch.  336. 

■-^  Battley  v.  Lewis,  1  Man.  &  Gran.  155.  Sec  Wilson  v.  Campbell,  5  Oilman,  383  ; 
Williams  v.  Jones,  5  B.  &  C.  108. 

3  Peacock  v.  Peacock,  16  Ves.  49  ;  Farrar  v.  Beswick,  1  Mood.  &  Rob.  527  ;  Gould 
V.  Gould,  6  Wend.  263 ;  Webster  v.  Bray,  7  Hare,  179,  per  Wigram,  V.  Ch.;  Dohelsou 
V.  Posey,  13  Ala.  752. 


166  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

rest.  And  this  agreement  is  valid  as  between  themselves ;  ^ 
though  not  against  third  parties,  unless  they  knew  of  this  agree- 
ment between  the  partners,  and  gave  credit  accordingly.  The 
rale  seems  to  be  that,  if  exemption  from  loss  is  claimed  on  ac- 
count of  any  special  limitation  of  the  partners'  authority  to  bind 
the  firm,  mere  knowledge  of  such  limitation  will  affect  third  par- 
ties.2  But  an  agreement  exempting  partners  from  loss  generally, 
or  from  loss  beyond  the  amount  invested,  will  only  operate 
between  the  partners,  unless  it  can  be  shown  that  the  third  party 
not  only  knew  the  agreement,  but  contracted  with  the  firm  on 
the  basis  of  this  agreement.^  In  general,  each  partner  is  abso- 
lutely responsible  to  every  creditor  of  the  copartnership,  for  the 
whole  amount  of  the  debt.*  And  if  thereby  obliged  to  suffer  loss, 
his  only  remedy  is  against  the  other  partners. 

Although  partners  may  agree  and  provide  as  they  will  in  their 
articles,  a  long  neglect  of  these  provisions  will  be  treated  by  a 
court  of  equity,  and,  perhaps,  of  law,  as  a  mutual  waiver  of 
them.^ 

Persons  may  be  partners  as  to  third  parties,  or  strangers,  who 
are  not  partners  inter  se.^  The  latter  question  would  generally 
be  determined  by  the  intention  of  the  parties,  as  drawn  from 
their  contract  —  whether  oral  or  written  —  under  the  ordinary 
rules  of  evidence  and  construction."  But  whether  one  is  liable 
as  a  partner  to  one  who  deals  with  the  firm,  must  depend  in  part 
upon  liis  intention,  but  more  upon  his  acts ;  for,  if  by  them  he 
justifies  those  who  deal  with  the  firm  in  thinking  him  a  partner 
in  that  business,  he  must  bear  the  responsibility ;  as  if  he  declare 
that  he  has  a  joint  interest  in  the  property,  or  conducts  the  busi- 

1  Hesketh  v.  Blanchard,  4  East,  144;  Winship  v.  United  States  Bank,  5  Pet.  529; 
Pollard  V.  Stanton,  7  Ala.  761. 

-  Boardman  v.  Gore,  15  Mass.  336  ;  Dow  v.  Sayward,  12  N.  H.  271,  275  ;  Ensign  v. 
Wands,  1  Johns.  Cas.  171 ;  New  York  Fire  Ins.  Co.  v.  Bennett,  5  Conn.  579;  Cargill 
V.  Corby,  15  Miss.  425.     See  Galway  v.  Matthew,  1  Camp.  403.  < 

3  Danforth  v.  Allen,  8  Mete.  341,  per  Wilde,  J.;  King  v.  Dodd,  9  East,  516,  527; 
Saufley  v.  Howard,  7  Dana,  367,  370  ;  Andrews  v.  Schott,  10  Penu.  St.  47,  55.  See 
Bailey  y.  Clark,  6  Pick.  372  ;  Batty  v.  M'Cundie,  3  Car.  &  P.  202. 

*  Rice  V.  Shute,  5  Burr.  2611 ;  Abbot  v.  Smith,  2  Wm.  Bl.  947. 

s  England  v.  Curling,  8  Beav.  129;  Jackson  v.  Sedgwick,  1  Swanst.  460;  Const  v. 
Harris,  Turner  &  Rus.  496,  523 ;  Boyd  v.  Mynatt,  4  Ala.  79 ;  McGraw  v.  Pulling,  1 
Ereem.  Ch.  357. 

°  Waugh  V.  Carver,  2  H.  Bl.  235;  Hazard  v.  Hazard,  1  Story,  371  ;  Heskcth  v. 
Blanchard,  4  East,  144;  Gill  v.  Kuhn,  6  Serg.  &  Rawle,  333.  See  Griffith  v.  Buffum, 
22  Vt.  181. 

'  Bird  V.  Hamilton,  1  Walk.  Ch.  (Mich.)  361 ;  Goddard  v.  Pratt,  16  Pick.  412;  Gill 
V.  Kuhn,  6  Serg.  &  Rawle,  333. 


CH.  XI.]  '  PARTNERSHIP.  167 

ness  of  the  firm  as  a  partner,  accepting  bills,  or  the  likc.^  The 
declarations  or  acts  of  one  cannot,  however,  make  another  liable 
as  partner.^  The  true  rule,  we  think,  (although  it  may  not  be 
quite  settled,)  is  this,  that  one  who  thus  holds  himself  out  as  a 
partner,  when  he  really  is  not  one,  is  responsible  to  a  creditor 
who  on  these  grounds  believed  him  to  be  a  partner;  but  not  to 
one  who  knew  nothing  of  the  facts,  or  who,  knowing  them,  knew 
also  that  this  person  was  not  a  partner.^ 

A  secret  partner  is  one  who  is  actually  a  partner  by  participa- 
tion of  profit,  but  is  not  avowed  or  known  to  be  such  ;^"  and  a 
dormant  partner  is  one  who  takes  no  share  in  the  conduct  or 
control  of  the  business  of  the  firm.^  Both  of  these  are  liable  to 
creditors,  even  if  they  did  not  know  them  to  be  members  of  the 
firm,  on  the  ground  of  their  interest  and  participation  in  the 
profits,  which  constitute,  with  the  property  of  the  firm,  the  funds 
to  which  creditors  may  look  for  payment.  A  nominal  partner  is 
one  who  holds  himself  out  to  the  world  as  such,  but  is  not  so  in 
fact.  He  is  liable  to  creditors  of  the  firm,  on  the  ground  that 
he  justifies  them  in  trusting  the  firm  on  his  credit,  and,  indeed, 
invites  them  to  do  so,  by  declaring  himself  to  be  a  partner. 

The  principal  test  of  membership  in  a  mercantile  firm  is  said 
to  be  the  participation  of  profits.  Thus,  if  one  lend  money  to  be 
used  in  a  business,  for  which  he  is  to  receive  a  share  in  the 
profits,  this  would  make  him  a  partner;  and  if  he  is  to  receive 
lawful  interest  and,  in  addition  thereto,  a  share  of  the  profits,  this 
would  make  him  liable  as  a  partner  to  a  creditor,  although  the 


1  Fox  V.  Clifton,  6  Bing.  776.  794;  Guidon  v.  Robson,  2  Camp.  302;  Dickin.son  v. 
Valpy,  10  B.  &  Cress.  140;  Stearns  v.  Haven,  14  Vt.  540;  Gilpin  v.  Temple,  4  Mar- 
ring. 190;  Eurber  v.  Carter,  11  Humph.  271. 

2  Whitney  v.  Ferris,  10  Johns.  66;  McPherson  v.  Rathbone,  7  Wend.  216;  Jennings 
V.  Estes,  16  Maine,  323  ;  Thornton  v.  Kerr,  6  Ala.  823 ;  Tuttle  v.  Cooi)er,  5  Pick.  414  ; 
Anderson  v.  Levan,  1  Watts  &  Ser.  334 ;  Taylor  v.  Henderson,  17  Ser.  &  Rawle,  453. 

'^  Id  Young  v.  Axtell,  eited  2  H.  Bl.  242,  Lord  Mansjield  is  reported  as  saying:  "As 
she  suffered  her  name  to  be  used  in  the  business,  and  held  herself  out  as  partner,  she 
was  certainly  liable,  though  the  plaintiff  did  not,  at  the  time  of  dealing,  knou-  that  she 
was  a  partner,  or  that  her  name  was  used."  It  now  appears  to  be  well  .settled  tliat  the 
holding  out  must  be  to  the  partv  himself,  and  credit  given  on  the  strength  of  it.  Dickin- 
son v.'Valpy,  10  B.  &  Cress,  i'28,  140 ;  Pott  v.  Eyton,  3  C  B.  32,  39  ;  iMarkham"^-. 
Jones,  7  B.  Men.  456  ;  Buckingham  v.  Burgess,  3  McLean,  364,  549.  See  Galway  v. 
Matthews,  1  Camp.  403  ;  Brown  v.  Leonard,  2  Ciiitty,  120. 

*  United  States  v.  Binney,  5  Mason,  186,  5  Pet.  529. 

5  Mitchell  V.  Dall,  2  Harris  &  Gill,  159  ;  Kellev  v.  Hurlburt,  5  Cow.  534;  Desha  v. 
Holland,  12  Ala.  513. 


168  '  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XI. 

borrower  might,  perhaps,  treat  the  transaction  as  an  usurious 
loan,  and  on  that  ground  defend  himself  if  sued  for  the  money.' 

Sometimes  a  clerk,  or  salesman,  or  a  person  otherwise  em- 
ployed for  the  firm,  receives  a  share  of  the  profits  instead  of 
wages.  Formerly  it  was  held,  but,  as  we  think,  on  insufficient 
authority,  that  if  such  person  received  "  one  tenth  part  of  the  net 
annual  profits,"  this  made  him  a  partner;  but  if  he  received  "a 
salary  equal  in  amount  to  one  tenth  of  the  net  profits,"  this  did 
not  make  him  a  partner.  We  apprehend,  however,  that  now  the 
courts  would  look  more  at  the  actual  intention  of  the  parties, 
and  their  actual  ownership  of  an  interest  in  the  funds  of  the  part- 
nership, and  not  be  governed  by  the  mere  phraseology  used.  If 
in  fact  he  works  for  wages,  although  these  wages  are  measured 
by  the  profits,  he  is  no  partner.^ 

Hence,  factors   and  brokers  for  a  commission  on  the  profits, 

1  Grace  v.  Smith,  2  W.  Bl.  999,  and  Bloxham  v.  Pell,  cited ;  Morse  v.  Wilson,  4  T. 
R.  353;  Gilpin  v.  Enderbey,  5  B.  &  Aid.  954  ;  Oakley  v.  Aspinwall,  2  Sandf.  Sup.  Ct. 
R.  7 ;  Bailey  v.  Clark,  6  Pick.  372 ;  Ex  parte  Emma  Briggs,  3  Dea.  &  Ch.  367. 

2  Tlie  earliest  case  on  this  point  was  Grace  v.  Smith,  2  W.  Bl.  999  ;  and  to  this  case, 
as  autliority,  the  principle  as  stated  has  been  referred.  Here,  Smith  dissolved  a  part- 
nership with  Robinson,  and  agreed  to  lend  the  latter  £4,000,  for  which  he  was  to 
receive  five  per  cent,  interest,  and  an  annuity  of  £300.  Was  Smith  liable  by  reason  of 
this  contract,  for  goods  sold  to  Robinson  ?  Tlie  jury  found  that  the  annuity  was  not 
payable  out  of  profits.  Held,  that  he  was  not  liable.  De  Grey,  C^.,  said  :  "  The  only 
question  is,  what  constitutes  a  secret  partner '?  Every  man  who  has  a  share  of  the 
profits  of  a  trade,  ought  also  to  bear  his  share  of  the  loss.  And  if  any  one  takes  a  part 
of  the  profit,  he  takes  a  part  of  that  fund  on  which  the  creditor  of  tlie  trader  relies  for 
his  payment."  From  this  it  would  be  inferred  tliat  the  court  considered-every  person 
lial)ie  as  a  partner,  who  took  a  part  of  the  partnership  fund.  But  afterwards,  in  the 
same  decision,  De  Grey  says  :  "  I  think  the  true  criterion  is,  to  inquire  whether  Smith 
agreed  to  shai'c  the  profits  of  the  trade  with  Robinson,  or  whether  he  only  relied  on 
these  profits  as  a  fund  of  payment.  A  distinction  not  more  nice  than  usually  occurs  in 
questions  of  trade  or  usury."  There  is  no  higher  authority,  by  decision,  for  the  old 
rule  above  stated,  than  this  case.  Lord  Eldon,  in  Ex  parte  Hamper,  17  Ves.  404,  asserts 
that  it  is  tiie  rule,  but  appears  to  refer  to  Grace  v.  Smith  as  his  authority.  See  Ex  parte 
Langdale,  18  Ves.  300.  We  should  prefer  saying  that  the  true  criterion  is,  has  the 
person  sought  to  be  charged  as  a  partner,  any  interest  in  the  profits  while  they  remain 
a  part  of  the  undivided  stock  in  trade  ?  If  so,  he  must  sustain  the  lialnlities  of  a  part- 
ner. But  if  he  has  no  interest  in  the  profits,  excepting  that  share  which  by  his  bargain 
comes  to  him,  and  no  interest  or  property  in  this  specific  share,  until  it  be  severed  by 
the  partners  for  him,  he  is  then  no  partner,  but  one  who  works  for  wages.  Any  one 
who  wishes  to  pursue  this  question  through  the  authorities,  may  refer  for  English  cases, 
to  Bloxham  v.  Pell,  cited  in  Grace  v.  Smith,  supra ;  Waugh  v.  Carver,  2  H.  Bl.  235 ; 
Hesketh  v.  Blanchard,  4  East,  144  ;  Wilkinson  v.  Frasier,  4  Esp.  182;  Dry  v.  BoswelJ, 
1  Camp.  329  ;  Rowlandson,  ex  parte,  1  Rose,  90;  Watson,  ex  parte,  19  Ves.  459  ;  Mair 
V.  Glennic,  4  M.  &  S.  240;    Cheap  v.  Cramond,  4  B.  &  Aid.  663  ;    Gilpin  v.  Enderbey, 

5  B.  &  Aid.  954  ;  Smith  v.  Watson,  2  B.  &  Cr.  401  ;  Reid  v.  Hollingshead,  4  B.  &  Cr. 
867  ;  Bond  v.  Pittard,  3  M.  &  W.  357  ;  Wilson  v.  Whitehead,  10  M.  &  W.  503 ;  Raw- 
linson  v.  Clarke,  15  M.  &  W.  292  ;  Pott  r.  Eyton,  3  C.  B.  32  ;  Barry  v.  Nesham,  id 
£41  :  Stocker  v.  Brockelbank,  5  Eng.  Law  and  Eq.  67.  For  American  cases,  see 
Loomis  V.  Marshall,  12  Conn.  69 ;  Dunham  v.  Rogers,  1  Barr.  255  ;  Burckle  v.  Eckhart, 
3  Comst.  132,  1  Dcnio,  342  ;    Cushman  v.  Bailey,  1  Hill,  526;  Thorndike  v.  De  Wolf, 

6  Pick.  120;  Jackson  v.  Robinson,  3  Mason,  138". 


en.  XI.]  PARTNERSHIP.  169 

masters  of  vessels  who  engage  for  a  share  of  the  profits,  seamen 
employed  in  whale  ships,  are  none  of  them  partners. 

A  partnership  usually  has  but  one  business  name ;  but  there 
does  not  seem  to  be  any  legal  objection  to  the  use  of  two  names, 
especially  for  distinct  business  transactions ;  as  A  B  &  Co.  for 
general  business,  and  the  name  of  A  B  only  for  the  purpose  of 
making  or  indorsing  negotiable  paper.' 


SECTION  III. 

now  A  PARTNERSHIP   MAY   BE   DISSOLVED. 

If  the  articles  between  the  partners  do  not  contain  an  agree- 
ment that  the  partnership  shall  continue  for  a  specified  time,  it 
may  be  dissolved  at  the  pleasure  of  either  partner.^  If  there  be 
such  a  provision,  it  shoukLbe  regarded  as  binding;  and  it  prob- 
ably may  be  inferred  from  circumstances ;  but  only  from  those  of 
a  very  significant  and  decisive  character.^  If  either  partner  were 
to  undertake  to  assign  his  interest,  for  the  purpose  of  withdrawing 
from  the  firm,  against  the  will  of  the  partners,  without  good 
reason,  and  in  fraud  of  his  express  agreement,  a  court  of  equity 
might  interfere.*     For  the  assignment  of  a  partner's  interest,  or 

>  South  Carolina  Bank  v.  Case,  8  B.  &  Cress.  427 ;  Tarns  v.  Hitner,  9  Penn.  St.  441, 
447;  Kinsman  v.  Dallam,  5  Mon.  382;  Palmer  v.  Stephens,  1  Denio,  471. 

-  It  appears  to  be  now  clearl)'  settled  in  England  that  a  partnership  for  an  indefinite 
period  may  be  dissolved  by  any  partner  at  a  moment's  notice.  Peacock  i'.  Peacock, 
16  Ves.  49;  Featherstonhaugh  v.  Fenwick,  17  Ves.  298,  308;  Nerot  v.  Burnand,  4 
Euss.  260;  Heath  v.  Sansom,  4  B.  &  Ad.  175;  Alcock  v.  Taylor,  Tamlyn,  506.  But 
in  the  well-considered  case  of  Howell  v.  Harvey,  5  Pike,  (Ark.)  270,  it  was  held  that 
tlie  dissolution  must  be  in  good  faith,  and  not  at  an  unreasonable  time.  The  duration 
may  be  gathered  from  the  terms  of  the  articles,  although  not  expressly  provided  far. 
Potter  V.  Moses,  1  Rhode  Island,  430 ;  Wheeler  v.  Van  AVart,  2  Jurist,  252. 

^  Crawshay  v.  Maule,  1  Swanst.  495,  508,  521.  In  this  case.  Lord  Eldoii  said: 
"Without  doubt,  in  the  absence  of  express,  there  may  be  an  implied  contract,  as  to  the 
duration  of  a  partnership ;  but  I  must  contradict  all  authority  if  I  say  that,  wherever 
there  is  a  partnership,  the  purchase  of  a  leasehold  interest  of  longer  or  shorter  duration, 
is  a  circumstance  from  which  it  is  to  be  inferred  that  the  partnership  shall  continue  as 
long  as  the  lease.  On  that  argument,  the  court,  holding  that  a  lease  for  seven  years  is 
proof  of  partnership  for  seven  years,  and  a  lease  of  fourteen  of  a  partnership  for  four- 
teen years,  must  hold  that,  if  the  partners  purchase  a  fee-simple,  there  shall  be  a  part- 
nership forever." 

*  The  question  whether  one  partner  may,  by  his  own  mere  will,  dissolve  a  partner- 
ship formed  for  a  detinite  period,  has  elicited  much  discussion.  It  appears  to  have  been 
assumed  that  there  is  no  such  power,  in  Peacock  v.  Peacock,  16  Ves.  56;  Crawshay  v. 
Maule,  1  Swanst.  495;  Wheeler  v.  Van  Wart,  2  Jurist,  252;  Pearpoint  v.  Graham,  4 
Wash.  C-  C.  232 ;  but  there  are  no  express  adjudications  against  it.  In  favor  of  this 
power  are,  the  decision  of  the  New  York  Court  of  Errors,  in  Marquand  v.  New  York 

15 


170  ELEMENTS   OF   MERCANTILE   LAW.  [cil.  XI. 

of  his  share  of  the  profits,  operates  at  once  a  dissolution  of  the 
partnershi[).i  Such  assignment  may  transfer  to  the  assignee  the 
whole  interest  of  the  assignor,  but  cannot  give  him  a  right  to 
become  a  member  of  the  firm.^  But  there  seems  to  be  an  excep- 
tion to  this  rule  where  the  partnership  is  very  numerous,  and  the 
manner  of  holding  shares,  by  scrip  or  otherwise,  indicates  the 
original  intention  of  making  the  shares  transferable.-^  Such  a 
partnership  is  in  effect  a  joint-stock  company;  which  form  of 
association  is  common  in  England,  and  there  regulated  by  many 
statutes ;  but  is  not  usual  here,  where  incorporation  is  so  easily 
obtained. 

Death  operates  a  dissolution ;''  and  the  personal  representatives 
of  the  deceased  do  not  take  his  place,  unless  there  be  in  the 
articles  an  express  provision  that  they  shall.^  And  even  such 
provisions  have  been  construed  as  giving  the  heirs  or  personal 
representatives  the  right  of  electing  whether  to  become  partners 
or  not.^  If  either  party  is  unable  to  do  his  duty  to  the  partner- 
ship, as  by  reason  of  insanity,"  or  a  \oiTg  imprisonment;  or  if  he 

Man.  Co.  17  Johns.  525,  and  the  following  cases:  Mason  v.  Connell,  1  Wharton,  388 ; 
Skinner  v.  Dayton,  19  Johns.  538;  Whitton  i.  Smith,  1  Treem.  Ch,  (Miss.)  231.  See 
Bishop  V.  Breckles,  1  Hoff.  Ch.  .'•)34. 

'  Marquand  v.  New  York  Manuf.  Co.  17  Johns.  525  ;  Whitton  v.  Smith,  1  Freem.  ^ 
Ch.  (Miss.)  231  ;    Heath  v.  Sansom,  4  B.  &  Ad.  175;    Cochran  v.  Perry,  8  Watts  &  - 
Serg.  262;  Horton's  Appeal,  13  Pcnn.  St.  G7.     But  see  Taft  v.  Buffum,  14  Pick.  322; 
Buford  V.  Neeley,  2  Dev.  Eq.  481. 

2  Kingman  v.  Spurr,  7  Pick.  235;  Nicoll  v.  Mumfqrd,  4  Jolins.  Ch.  522. 

3  Fox  V.  Clifton,  9  Bing.  115,  119.  If  the  articles  designate  a  mode  of  transfer,  it 
must  be  strictly  followed.  Kingman  v.  Spurr,  7  Pick.  235  ;  Cochran  v.  Perry,  8  Watts 
&  Serg.  262. 

*  Murray  v.  Mumford,  6  Cow.  441  ;  Burwell  v.  Cawood,  2  How.  560 ;  Knapp  v. 
McBride,  7  Ala.  19.  The  dissolution  operates  as  to  all  the  survivors,  however  nu- 
merous may  be  the  association  ;  and  even  if  the  deceased  were  a  silent  partner.  Wash- 
burn V.  Goodman,  17  Pick.  519.  And  though  the  partnership  be  for  a  term  of  years, 
yet  unexpired,  unless  expressly  provided  otiierwise.  Gillespie  v.  Hamilton,  3  Madd. 
251  ;  Scholefield  v.  Eichelbcrger,  7  Pet.  586;  Goodburn  v.  Stevens,  5  Gill,  1.  Dissolu- 
tion by  death  affects  third  parties,  without  notice  of  it.  Vulliamy  v.  Noble,  3  Mcr.  614; 
Webster  v.  Webster,  3  Swanst.  490,  n.  In  Washburn  v.  Goodman,  17  Pick.  519,  the 
estate  of  a  deceased  partner  was  held  liable  on  bills  drawn  after  his  death ;  but  there 
were  other  reasons  than  a  want  of  notice. 

^  Pearce  v.  Chamberlain,  2  Ves.  Sen.  33;  Crawshay  v.  Maule,  1  Swanst.  495,  514, 
n.,  520;  Balmain  v.  Shore,  9  Ves.  500  ;  Gratz  v.  Bayard,,  11  Serg.  &  Eawle,  41. 

6  Pigott  V.  Bagley,  McClell.  &  Younge,  569  ;  Kershaw  v.  Matthews,  2  Russ.  62 ; 
Louisiana  Bank  v.  Kenner's  Succession,  1  Louis.  384  ;  Downs  v.  Collins,  6  Hare,  418, 
437.  A  partner  may  by  will  appropriate  a  part  or  the  whole  of  his  estate  for  the  con- 
tinuance of  the  partnership  business  after  his  death,  and  if  his  copartners  consent  to  it, 
the  business  may  continue,  but  no  more  of  his  estate  will  be  bound  for  the  partnership 
debts  than  he  appropriates.  Burwell  v.  Cawood,  2  How.  560;  Pitkin  v.  Pitkin,  8  Conn. 
325;  Ex  parte  Garland,  10  Ves.  110;  Thompson  v.  Andrews,  1  Mylne  &  K.  116. 

■^  In  England,  lunacy  does  not  operate  ipso  faclo  as  a  dissolution  of  the  partnership. 
But  a  court  of  equity,  on  the  finding  of  lunacy,  either  by  inquisition  or  by  inquiry  under 
the  direction  of  the  court,  will  decree  a  dissolution.     Milne  v.  Bartlett,  3  Jurist,  358 


CII.  XI.]  PARTNERSHIP.  171 

be  guilty  of  material  wrongdoing  to  the  firm,  a  court  of  equity  will 
decree  a  dissolution.^  And  if  the  original  agreement  were  tainted 
with  fraud,  the  court  will  declare  it  void,  ah  inilio? 

Whenever  a  court  of  equity  decrees  a  dissolution  of  the  part- 
nership, it  will  also  decree  that  an  account  be  taken  between  the 
partners,  if  requested  by  either  partner.  And  if  necessary  to  do 
justice,  it  will  decree  a  sale  of  the  effects  and  a  distribution  of  the 
proceeds  after  a  consideration  of  all  the  facts  of  the  case  and  the 
whole  condition  of  the  firm.  Such  a  decree  will  be  made  if  a 
partner  die,  or  become  bankrupt.^  If  the  whole  interest  of  a  co- 
partner is  levied  upon  and  sold  on  execution,  this  makes  a  disso- 
lution, and  the  purchaser  becomes  —  like  every  other  assignee  of 
a  partner  —  a  tenant  in  common  with  the  other  partners;  but  if 
the  levy  and  sale  is  only  of  a  part  which  may  be  severed  from 
the  rest,  this  may  not  operate  a  dissolution  except  as  to  that 
part.4 

If  one  partner  retires,  this  operates  in  law  a  dissolution,  al- 
though in  fact  the  old  firm  frequently  continues  and  goes  on 
with  its  business,  with  or  without  new  members,  as  if  it  were  the 
same  firm.  The  partner  retiring  should  withdraw  his  name  from 
the  firm,^  and  give  notice,  by  the  usual  public  advertisement,  of 

Jones  V.  Noy,  2  Mylne  &  K.  125;  Leaf  v.  Coles,  12  Eng.  Law  and  Eq.  117.  The 
dissolution  does  not  take  effect  until  the  time  of  the  decree.  Besch  v.  Frolich,  7  Jurist, 
pt.  2,  73,  1  Phillips,  Ch.  172.  In  this  country,  in  Isler  v.  Baker,  6  Humph.  85,  it  was 
held  that  an  inquisition  of  lunacy,  found  against  a  member  of  a  partnership,  ipso 
facto  dissolved  the  partnership.  Story  on  Partnership,  §  295,  and  Davis  u.  Lane,  10 
N.  n.  IGl,  per  Parte-,  C.  J.,  favor  the  same  view.  See  Griswold  v.  Waddington,  15 
Johns.  57. 

^  A  court  of  equity  will  not  decree  a  dissolution  merely  because  partners  are  dissatis- 
fied. Goodman  v.  Wiiitcomb,  1  Juc.  &  W.  589  ;  Waters  v.  Tavlor,  2  Ves.  &  B.  299, 
15  Ves.  10;  Henn  v.  Walsh,  2  Ed.  Ch.  129;  Walker  v.  Trott,  4  Ed.  Ch.  38.  But 
where  the  conduct  of  the  partners  makes  it  impossible  for  the  business  to  be  conducted 
according  to  the  terms  of  the  partnership,  or  with  benefit  to  cither  party,  a  dissolution 
will  be  decreed.  Smith  v.  Jeyes,  4  Beav.  503;  Howell  v.  Harvev,  5  Pike,  (Ark.)  278  ; 
Bishop  V.  Brecklcs,  1  Hoff.  Cli.  534  ;  Blake  v.  Dorgan,  1  Greene, '(Iowa,)  537  ;  Speights 
V.  Peters,  9  Gill,  472  ;  Gowan  v.  Jeffries,  2  Ash.  296. 

2  Ex  parte  Broome,  1  Rose,  09;  Green  v.  Barrett,  1  Sim.  45.  50;  Howell  v.  Harvey, 
5  Pike,  (Ark.)  270,  281 ;  Hynes  v.  Stewart,  10  B.  Mon.  429. 

'^  After  dissolution,  any  partner,  or  the  executors  or  assignees  of  any  partner,  may, 
it  seems,  insistiipon  a  sale  of  the  partnership  effects.  Crawshay  v.  Collins,  15  Ves.  218; 
Rigdcn  V.  Pierce,  6  ]\Iadd.  353;  Sigourney  v.  Munn,  7  Conn.  11;  Evans  v.  Evans,  9 
Paige,  178;  Pierce  y.  Trigg,  10  Leigh,  406.  Even  though  the  articles  determine  the 
mode  of  distributing  the  stock,  if  they  cannot  be  literally  acted  upon.  Wilson  v.  Green- 
wood, 1  Swanst.  471  ;  Cook  v.  Collingridge,  Jac.  007.  See  Fcatherstonhaugh  v.  Fen- 
wick.  17  Ves.  298  ;  Leach  v.  Leach,  18  Pick.  75,  per  Wilde,  J. 

*  AVaters  v.  Ttivlor,  2  Ves.  &  B.  299  ;  NicoU  v.  Mumford,  4  Johns.  Ch.  525 ;  Allen 
V.  Wells,  22  Pick.'450. 

'"  Dolman  v.  Orchard,  2  Car.  &  P.  104;  Williams  v.  Keats,  2  Stark.  290;  Brown  v. 
Leonard,  2  Chitty,  120. 


172  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XI. 

his  retirement,  and  also,  by  personal  notice,  by  letter  or  other- 
wise, to  all  who  usually  do  business  with  the  firm,  and  after  such 
notice  he  is  not  responsible,  even  if  his  name  be  retained  in  the 
firm  by  the  other  partners,  but  without  his  consent.^  Nor  is  he 
responsible  to  any  one  who  has  in  any  way  actual  knowledge  of 
his  retirement.2  A  dormant,  or  secret  partner  is  not  liable  for  a 
debt  contracted  after  his  retirement,  although  he  give  no  notice ; 
because  his  liability  does  not  rest  upon  his  giving  his  credit  to 
the  firm,  but  upon  his  being  actually  a  partner.^ 


SECTION  IV. 

OF  THE  PROPERTY  OF  THE  PARTNERSHIP, 

A  partnership  may  hold  real  estate,  as  well  as  personal  estate. 
But  the  rules  of  law  in  respect  to  real  estate,  as  in  relation  to 
title,  conveyance,  dower,  inheritance,  and  the  like,  make  some 
difference.  As  far,  however,  as  is  compatible  with  these  rules,  it 
seems  to  be  agreed  that  the  real  estate  of  the  partnership  shall 
be  treated  as  if  it  were  personal  property,  if  it  have  been  pur- 
chased with  the  partnership  funds,  and  for  partnership  purposes.^ 

1  Newsome  v.  Coles,  2  Camp.  617;  Jenkins  v.  Blizard,  1  Stark.  418. 

2  A  notice,  published  for  a  reasonable  lengtli  of  tinne  in  the  place  or  places  where 
the  firm  transacts  business,  is  sufiicient  for  the  public  generally.     Mowatt  v.  Rowland, 

3  Day,  353  ;  Lansing  v.  Gaine,  2  Johns.  300  ;  Shurlds  v.  Tilson,  2  McLean,  458  ;  Wat- 
kinson  v.  Bank  of  Pennsylvania,  4  Whart.  482.  See  Brown  v.  Clark,  14  Penn.  St. 
469;  Conro  v.  Port  Henry  Iron  Co.  12  Barb.  56.  But  personal  notice,  by  letter  or 
otherwise,  should  be  given  to  those  who  have  had  dealings  with  the  firm.  Prentiss  v. 
Sinclair,  5  Vt.  149 ;  Wardwell  v.  Haight,  2  Barb.  549  ;  Hutchins  v.  Hudson,  8  Humph. 
426;  Vernon  v.  Manhattan  Co.  17  Wend.  526.  The  mere  taking  of  a  newspaper  in 
which  such  notice  is  published,  is  not  sufiicient.     Watkinson  v.  Bank  of  Pennsylvania, 

4  Whart.  482;  Vernon  v.  Manhattan  Co.  17  Wend.  526,  22  Wend.  192.  As  to  what  is 
sufficient  dealing  with  a  firm,  to  make  actual  knowledge  of  dissolution  necessary,  sec 
Vernon  v-  Manhattan  Co.  supra  ;  Hutchins  v.  Bank  of  Tenn.  8  Humph.  418. 

^  Grosvenor  v.  Lloyd,  1  Met.  19;  Magill  v.  Merrie,  5  B.  Monr.  168 ;  Scott  v.  Colmes- 
nil,  7  J.  J.  Marsh.  416. 

*  This  doctrine  is  confined  to  courts  of  equity.  The  principle  upon  which  it  has 
been  established  is,  that  the  legal  estate,  under  the  circumstances  stated  in  the  text,  is 
clothed  with  a  trust  for  the  purposes  of  the  partnership.  The  principle  is  well  ex- 
plained by  jShair,  C.  J.,  in  Dyer  v.  Clark,  5  Mete.  562,  577.  "It  appears  to  us,"  said 
he,  "  that  considering  the  nature  of  a  partnership,  and  the  mutual  confidence  in  each 
other,  which  that  relation  implies,  it  is  not  putting  a  forced  construction  upon  their  act 
and  intent,  to  hold  that,  when  property  is  purchased  in  the  name  of  the  partners,  out  of 
partnership  funds  and  for  partnership  use,  though,  by  force  of  the  common  law,  tliey 
take  the  legal  estate  as  tenants  in  common,  yet  that  each  is  under  a  conscientious  obli- 
gation to  hold  that  legal  estate  until  the  purposes  for  which  it  was  so  purchased  are 
accomplished,  and  to  appropriate  it  to  those  purposes,  by  first  applying  it  to  the  pay- 
ment of  the  partnership  debts,  for  which  both  his  partner  and  he  himself  are  liable,  and 
until  he  has  come  to  a  just  account  with  his  partner.    Each  has  an  equitable  interest  ia 


en.  XI.]  PARTNERSniP.  173 

Thus,  it  does  not  go  to  the  heirs  of  the  partner  or  partners  in 
whose  name  it  may  stand,  but  is  first  subject  to  the  debts  of  the 
firm,  and  then  to  the  balance  which  may  be  due  to  either  partner 
on  winding  up  their  affairs.'  But  when  these  debts  and  claims 
are  adjusted,  any  surplus  of  the  real  estate  will  go  to  the  heir, 
and  not  to  the  personal  representative  of  the  deceased  partner.^ 

that  portion  of  the  legal  estate  held  by  the  other,  until  the  debts,  obligatory  on  both, 
arc  ])ai(l,  and  his  own  share  of  the  outlay  for  i)artncrship  stoelv  is  restored  to  him.  This 
mutual  equity  of  the  parties  is  greatly  strengthened  by  tlie  consideration  that  the  part- 
ners may  have  contributed  to  the  capital  stock  in  unequal  proportions,  or,  indeed,  that 
one  may  liave  advanced  the  whole.  Take  the  case  of  a  capitalist  who  is  willing  to  put 
in  money,  but  wishes  to  take  no  active  concern  in  the  conduct  of  business,  and  a 
man  wiio  has  skill,  capacity,  integrity,  and  industry,  to  make  him  a  most  useful  active 
partner,  hut  without  property,  and  they  form  a  partnership.  Suppose  real  estate,  neces- 
sary to  the  carrying  on  of  the  business  of  tiic  partnership,  should  be  purchased  out  of 
the  capital  stock,  and  on  partnership  account,  and  a  deed  taken  to  tiiem  as  partners, 
without  any  special  provisions.  Credit  is  obtained  for  tlie  firm,  as  well  on  the  real 
estate  as  the  other  property  of  the  firm.  What  are  the  true  equitable  rights  of  the 
partners^  as  resulting  from  their  presumed  intentions,  in  such  real  estate?  Is  not  the 
share  of  each  to  stand  pledged  to  the  other,  and  has  not  each  an  equitable  lien  on  the 
estate,  requiring  that  it  shall  be  held  and  appropriated,  first  to  pay  the  joint  debts,  then 
to  repay  the  partner  who  advanced  the  capital,  before  it  shall  be  applied  to  the  separate 
use  of  either  of  the  partners  ?  Suppose  tliis  trust  is  jiot  implied,  what  would  be  the 
condition  of  the  parties,  in  the  case  supposed,  in  the  various  contingencies  which  might 
happen  ?  Suppose  tlie  elder  and  wealthier  partner  were  to  die.  The  legal  estate  de- 
scends to  his  heirs,  clothed  with  no  trust  in  favor  of  the  surviving  partner ;  the  latter, 
without  property  of  his  own,  and  relying  on  {he  joint  fund,  which,  if  made  liable,  is 
sufficient  for  the  purpose,  is  left  to  pay  the  whole  of  the  debt,  whilst  a  portion,  and 
perliaps  a  large  ])ortion,  of  the  fund  bound  for  its  payment,  is  withdrawn.  Or,  suppose 
the  younger  partner  were  to  die,  and  his  share  of  the  legal  estate  should  go  to  his  credi- 
tors, wife  or  children,  and  be  withdrawn  from  the  partnership  fund ;  it  would  work 
manifest  injustice  to  him  who  liad  furnished  the  fund  from  which  it  was  purchased. 
But  treating  it  as  a  trust,  the  rights  of  all  parties  will  be  preserved ;  the  legal  estate 
will  go  to  those  entitled  to  it,  subject  only  to  trust  and  equitable  lien  to  the  surviving 
partner,  by  which  so  much  of  it  shall  stand  charged  as  may  be  necessary  to  accomplish 
the  purposes  for  which  they  purchased  it.  To  this  extent,  and  no  further,  will  it  be 
bound ;  and  subject  to  this,  all  those  will  take  who  are  entitled  to  the  property ;  namely, 
the  creditors,  widow,  heirs,  and  all  others  standing  on  the  rights  of  the  deceased  partner." 

1  Dyer  v.  Clark,  supra;  Goodburn  v.  Stevens,  5  Gill,  1  ;  Howard  v.  Priest,  5  Met. 
582;  Burnside  v.  Merrick,  4  Met.  537;  Buchan  i-.  Sumner,  2  Barb.  Ch.  165,  197; 
Hoxie  V.  Carr,  I  Sumn.  173;  Brooke  D.Washington,  8  Gratt.  248;  Delmonico  v. 
Guillaume,  2  Sandf.  Ch.  366  ;  Sigourney  i'.  Munn,  7  Conn.  11  ;  Phillips  v.  Phillips,  1 
My.  &  K.  663  ;  Broom  t'.  Broom,  3  My.'fc  K.  443. 

^  Buckley  v.  Buckley,  11  Barb.  43;  Goodburn  v.  Stevens,  5  Gill,  1;  Buchan  v. 
Sumner,  2  Barb.  Ch.  165,  200.  In  this  last  case,  Walworth,  Ch.,  said  :  The  American 
decisions  in  relation  to  real  estate  purchased  with  partnership  funds,  or  [and  ?  J  for  the 
use  of  the  firm,  are  various  and  conflicting.  But  I  think  they  may  generally  be  con- 
sidered as  establishing  these  two  principles  :  1.  That  such  real  estate  is,  in  equity, 
chargeable  with  the  debts  of  the  copartnership,  and  with  any  balance  which  may  be  due 
from  one  copartner  to  another  upon  the  winding  up  of  the  affairs  of  the  firm.  2.  That, 
as  between  the  personal  representatives  and  the  heirs  at  law  of  a  deceased  partner,  his 
share  of  the  surplus  of  the  real  estate  of  the  copartnership,  which  remains  after  paying 
the  debts  of  the  copartnership,  and  adjusting  all  the  equitable  claims  of  the  different 
members  of  the  firm  as  between  themselves,  is  considered  and  treated  as  real  estate." 
But  in  England,  the  real  estate  of  a  copartnership  is  considered  in  equity  as  personal 
property,  even  as  between  the  personal  representative  and  the  heir.  See  Pinllips  v. 
Phillips,  1  ]\Iy.  &  K.  649  ;  Broom  v.  Broom,  3  My.  &  K.  443  ;  Morris  v.  Kearsley,  2 
You.  &  Coll.  139. 

15* 


174  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XI. 

Improvements  made  with  partnership  funds  on  the  real  estate  of 
a  partner,  will  be  regarded  as  partnership  property.^  The  widow 
has  her  dower  only  after  the  above-mentioned  debts  and  claims  are 
adjusted.  And  while  the  legal  title  is  protected,  as  it  must  be  for 
the  purpose  of  conveyance  and  other  similar  purposes,  the  person 
holding  this  legal  title  will  be  held  a  trustee  for  the  partnership, 
if  that  be  entitled  to  the  beneficiary  interest.^  But  a  purchaser 
of  partnership  real  property,  without  notice  or  knowledge,  from 
a  partner  holding  the  same  by  a  legal  title,  is  protected.^  If, 
however,  he  has  such  knowledge,  actually  or  constructively,  the 
conveyance  may  be  avoided  as  fraudulent,  or  he  may  be  held  as 
trustee,  the  land  being  in  his  hands  chargeable  with  the  debts 
and  claims  of  the  partnership.^  A  purchaser  of  partnership  chat- 
tels is  not  protected.^ 


SECTION  V. 

OF   THE   AXJTHORITY   OF   EACH   PARTNER,   AND    THE   JOINT   LIABILITY   OF 
THE    PARTNERSHIP. 

This  authority  is  very  great,  because  the  law-merchant  makes 
each  partner  an  agent  of  the  whole  partnership,  with  full  power 
to  bind  all  its  members  and  all  its  property,  in  transactions  which 
fall  within  the  usual  business  of  the  firm ;  as  loans,  borrowing, 
sales,  pledges,  mortgages,  or  assignments ;  ^  and  this  last,  we 
think,  extends  even  to  an  honest  and  prudent  assignment  of  the 

'  Averill  v.  Loucks,  6  Barb.  19 ;  Deming  v.  Colt,  3  Sandf.  284 ;  King  v.  Wilcomb, 
7  Barb.  263.     See  Frink  v.  Brancb,  16  Conn.  260,  271. 

^  See  supra,  p.  172,  n.  4. 

3  Hoxie  V.  Carr,  1  Sumner,  173;  Kelley  v.  Greenleaf,  3  Story,  93;  Buck  v.  Winn, 
11  B.  Mon.  320.  See  Kramer  v.  Arthurs,  7  Penn.  St.  165.  In  Walsh  v.  Adams,  3 
Denio,  12.'»,  it  was  held  that  this  principle  was  confined  to  real  estate,  and  that  a  pur- 
chaser of  chattels  belonging  to  a  partnership,  must  take  them  subject  to  the  partnership 
claims,  whether  he  had  notice  that  they  belonged  to  the  copartnership  or  not. 

*  See  preceding  note. 

6  Ibid. 

6  A  partner  may  sell  the  whole  stock  at  a  single  contract.  Arnold  v.  Brown,  24 
Pick.  89  ;  Whitten  v.  Smith,  1  Frecm.  Ch.  (Miss.)  231.  See  Pearpoint  v.  Graham,  4 
Wash.  C.  C.  232  ;  Livingston  v.  Roosevelt,  4  Johns.  277.  For  a  partner's  authority  to 
.pledge,  see  Reid  v.  HolUngshead,  4  B.  &  C.  867;  Metcalf  v.  Royal  Ex.  Ass.  Co. 
Barnardiston,  343  ;  /sr/jarte  Cellar,  1  Rose,  297.  For  limitations  to  such  authority, 
see  Ex  parte  Copeland,  3  Dea.  &  Chit.  199;  Snaith  v.  Burridge,  4  Taunt.  684.  For 
authority  to  mortgage,  see  Milton  v.  Mosher,  7  Mete.  244 ;  Tapley  v.  Buttertield,  1 
Mete.  515. 


en.  XI.]  PARTNERSHIP.  175 

whole  stock  and  personal  property  to  trustees  to  pay  partnership 
debts.'  So  the  making  or  indorsing  negotiable  paper.^  So,  in 
transactions  out  of  the  usual  business  of  the  firm,  if  they  arose 
from  and  were  fairly  connected  with  that  business.^  Nor  is 
any  party  dealing  with  him  afiected  by  his  want  of  good  faith 
towards  the  partnership,  unless  he  colluded  with  the  partner  and 
participated  in  his  want  of  good  faith,  by  fraud  or  gross  negli- 
gence. Thus,  a  holder  of  a  note  or  bill  signed  or  indorsed  by  a 
partner  without  authority,  has  no  claim  against  the  partnership 
if  he  knew  or  should  have  known  the  want  of  authority.*  A 
partner  cannot,  in  general,  bind  the  firm  by  a  guaranty,  a  letter 

1  Upon  the  question  whether  a  partner  may  assign,  without  the  consent  of  his  co- 
partners, the  whole  property  of  a  firm  for  the  benefit  of  its  creditors,  there  is  much  con- 
flict both  in  the  dicta  and  in  the  reasons  upon  which  the  decisions  have  been  rested ; 
but  it  is  believed  that  the  following  rules  may  be  deduced  from  the  adjudications,  when 
considered  with  reference  to  the  facts  of  the  cases  in  which  they  were  made.  1.  A  bond 
fide  assignment  directly  to  particular  creditors,  of  a  sufficient  amount  to  discharge 
their  debts,  is  valid,  even  if  all  the  property  of  the  firm  be  taken,  and  a  preference  be 
thereby  given  to  such  creditors.  Tapley  v.  Butterficld,  1  Mete.  515;  Mills  v.  Barber, 
4  Day"  428  ;  Walworth,  Ch.,  in  Havens  v.  Hussy,  5  Paige,  31.  See  Deming  v.  Colt,  3 
Sandf.  284;  Dana  r.  Lull,  17  Vt.  393,  394.  2.  If  necessary  for  the  protection  of  cred- 
itors, an  assignment  of  all  the  personal  property  to  a  trustee,  for  their  benefit,  by  one 
partner,  if  his  copartner  is  absent  and  cannot  be  consulted  in  season,  and  has,  cither 
expressly  or  by  implication,  left  to  him  the  sole  management  of  the  business,  will  be 
held  valid.  Anderson  v.  Tompkins,  1  Brock.  45G;  Robinson  r.  Crowder,  4  McCord, 
519  ;  Deckacil  v.  Case,  5  Watts,  22 ;  Harrison  v.  Sterry,  5  Cranch,  300.  See  dicta  of 
Fetch,  J.,  in  Kirby  v.  Ingersoll,  1  Doug.  (Mich.)  490;  and  of  Oaklet/,  C.  J.,  in  Deming 
V.  Colt,  3  Sandf.  292.  See  Hitchcock  v.  St.  Johns,  HofF.  Ch.  511,  which  appears  to 
hold  that  such  assignment  must  not  prefer  creditors.  See  also  Dickinson  v.  Lcgare, 
1  Dessau.  540.  3.  A  partner,  if  his  copartner  be  engaged  with  him  in  managing  the 
business  of  the  firm,  and  is  present,  or  can  be  seasonably  consulted,  cannot  make  a 
valid  assignment  of  all  the  personal  property  of  the  firm  to  trustees,  for  the  benefit  of 
creditors,  without  the  assent  of  his  copartner.  Deming  v.  Colt,  3  Sandf.  284;  Havens 
V.  Hussy,  5  Paige,  30;  Kirby  v.  Ingersoll,  1  Doug.  (Mich.)  477  ;  Dana  i-.  Lull,  17  Vt. 
390.  In  Hughes  v.  Ellison,  5  Mis.  463,  it  does  not  appear  whether  the  copartner  was 
present  or  not.  In  Egberts  r.  Wood,  3  Paige,  517,  525,  it  was  held  that,  after  dissolu- 
tion by  the  death  of  one  partner,  one  of  two  surviving  partners,  without  the  assent  of 
the  other,  could  not  assign  the  whole  property  of  the  firm  for  the  benefit  of  preferred 
creditors.  The  real  estate  of  a  partnership  cannot  be  conveyed  by  one  partner  alone. 
Anderson  v.  Tompkins,  1  Brock.  463  ;  per  Shaw,  C.  J.,  in  Tapley  v.  Butiprfield,  1  Mete. 
518,  519. 

2  Pinkney  v.  Hall,  1  Salk.  126,  1  Ld.  Raym.  175;  Smith  v.  Baily,  11  Mod.  401. 
The  presumption  of  law  is,  that  a  note,  made  by  one  partner  in  the  name  of  the  firm, 
was  given  in  the  regular  course  of  partnership  dealings,  and  hence  is  binding  upon  the 
firm.  Doty  r.  Bates,  11  Johns.  544 ;  M.  and  M.  Bank  v.  Winship,  5  Pick.  11  ;  Emer- 
son V.  Harmon,  14  Maine,  271.  This  authority  to  bind  the  firm  by  bills  and  notes  is 
confined  to  partners  in  trade.  Hedley  v.  Bainbridge,  3  Q.  B.  316;  Greensladc  v. 
Dower,  7  B.  &  Cress.  635  ;  Dickinson  r.  Valpy,  10  B.  &  C.  128. 

3  Sandilands  v.  Marsh,  2  B.  &  Aid.  673.  See  Livingston  v.  Roosevelt,  4  Johns.  251 ; 
Lea  ?;.  Guice,  13  Sm.  &  Marsh.  656. 

*  Blair  v.  Bromley,  5  Hare,  542;  Brydges  r.  Branfill,  12  Simons,  369;  Swan  u. 
Steele,  7  East,  210  ;  Livingston  v.  Roosevelt,  4  Johns.  251 ;  Winship  v.  Bank  of  United 
States,  5  Pet.  529;  Etheridge  i'.  Binney,  9  Pick.  272;  Locke  v.  Stearns,  1  Mete. 
560. 


176  ELEMENTS  OF  MERCANTILE  LAW.         [CH.  XI. 

of  credit,'  or  a  submission  to  arbitration,^  without  express,  or  a 
distinctly  implied,  authority. 

By  the  earlier  and  more  stringent  rules  of  law,  a  partner  could 
not  bind  his  copartners  by  an  instrument  under  seal,  unless  he 
was  himself  authorized  under  seal;  and  their  subsequent  ac- 
knowledgment of  his  authority  did  not  cure  the  defect.*^  It  seems 
now,  however,  to  be  the  law  of  this  country,  that  a  partner  may 
bind  his  firm  by  an  instrument  under  seal,  if  it  be  in  the  name 
and  for  the  use  of  the  firm,  and  in  the  transaction  of  their  usual 
business,  provided  the  other  copartners  assent  thereto  before  exe- 
cution, or  adopt  and  ratify  the  same  afterwards ;  and  they  may 
assent  or  ratify  by  parol  as  well  as   by  seal;*    or  provided   he 

'  Tlic  law  on  the  suhjoct  of  guaranty  by  one  partner  in  the  name  of  the  firm,  is  well 
expressed  by  Metcalf,  J.,  in  Swectser  i-.' French,  2  Cush.  309,  314  :  "Whatever  the 
English  law  may  formerly  have  been  as  to  guaranties,  we  consider  it  now  settled,  in 
England  as  well  as  in  the  United  States,  that  one  partner  cannot  bind  the  firm  by  the 
guaranty  of  the  debt  of  another,  without  a  special  authority  for  that  ])urpose,  or  an 
authority  to  be  implied  from  the  common  course  of  the  business  of  the  firm,  or  the 
previous  course  of  dealing  between  the  parties ;  unless  the  guaranty  be  afterwards 
adopted  and  acted  upon  by  the  firm."  Such  authority  might  be  implied  from  the  usage 
of  others  in  a  similar  business.  But  such  authority  will  not  be  implied  from  the  fact 
that  it  was  a  reasonable  mode  of  doing  the  partnership  business.  Brettel  v.  Williams, 
4  Exch.  630.  The  general  principle  is  sustained  in  Duncan  v.  Lowndes,  3  Camp.  478; 
Hasleham  v.  Young,  5  Q.  B.  833 ;  Foot  v.  Sabin,  19  Johns.  154  ;  Rollins  v.  Stevens,  31 
Maine,  454 ;  Sutton  v.  Irwine,  12  Scrg.  &  K.  13 ;  Langan  v.  Hewett,  13  Sm.  &  Marsh, 
122.  The  same  princi])le  applies  to  the  making  or  indorsing  of  notes  for  accommoda- 
tion, when  not  in  the  hands  of  a  bond  fide  holder  for  value.  Austin  v.  Vandermark,  4 
Ilill,  259;  Wilson  v.  Williams,  14  Wend.  146;  Beach  v.  State  Bank,  2  Carter,  (Ind.) 
488. 

2  It  is  well  settled  in  England  that  a  partner  cannot  bind  his  copartner  by  a  submis- 
sion to  arbitration.  Adams  v.  Bankliart.  1  C.  M.  &  Ros.  681  ;  Stead  v.  Salt,  3  Bing. 
101.  The  same  principle  is  sustained  in  Hicks  f.  Foster,  13  Barb.  663;  Buchanan 
V.  Curry,  19  Johns.  137  ;  Karthaus  i'.  P'errer,  1  Pet.  222,  228.  In  Southard  v.  Steele, 
3  Mon.  435,  and  Taylor  v  Coryell,  12  Serg.  &  R.  243,  it  was  held  that  such  submission, 
when  not  under  seal,  would  bind  the  firm.  See  Wilcox  v.  Singletary,  Wright,  (Ohio,)  420; 
Armstrong  v.  Robinson,  5  Gill  &  J.  412,  422 ;  Shillings  v.  Coolidge,  14  Mass.  43,  45. 

^  But  a  partner  miglit  always,  by  deed,  release  a  joint  claim,  and  thereby  bind  his 
copartners.  2  Roll.  Abr.  410,  (D) ;  Perry  v.  Jackson,  4  T.  R.  519,  per  Lord  Kenijon; 
Phillips  V.  Clagett,  11  M.  &  W.  84,' 94,  per  Parke,  B.;  Picrson  v.  Hooker,  3  Johns.  68; 
Bruen  v.  Marquand,  17  Johns.  58  ;  Morse  v.  Bellows,  7  N.  H.  567  ;  Emerson  v.  Knower, 
8  Pick.  63. 

■*  In  the  case  of  Gram  v.  Seton,  1  Hall,  (N.  Y.)  262,  Jones,  C.  J.,  after  a  careful 
review  of  the  authorities,  said  :  "  The  previous  authority  or  permission  of  one  partner 
to  another  to  seal  for  him,  or  his  subsequent  adoption  of  tlic  seal  as  his  own,  will  im- 
part efficacy  to  the  instrument  as  liis  deed  ;  and  that  previous  authority  or  subsequent 
adoption  may  be  by  parol."  Three  years  later,  (1831,)  the  Supreme  Court  of  Massa- 
chusetts, on  an  independent  investigation  of  the  subject,  arrived  at  the  same  conclusion. 
Cady  V.  Shepherd,  11  Pick.  400.  These  two  decisions  were  followed  in  Bond  v.  Aitkin, 
6  Watts  &  Serg.  165;  Pike  v.  Bacon,  21  Maine,  280  ;  Price  v.  Alexander,  2  Greene, 
(Iowa,)  427,  432;  Swan  v.  Stedinan,  4  Mete.  548;  Smith  v.  Kerr,  3  Comst.  144,  150. 
But  they  were  rejected  in  Turbeville  v.  Ryan,  1  Humph.  113;  and  some  doubt  may 
perhaps  lie  thrown  upon  tliem,  even  in  New  York,  by  a  recent  and  -^vell-cousidered 
dicluin  0^  Paige,  J.,  in  delivering  the  judgment  of  the  Court  of  Appeals,  in  Worrall  ?'. 
Munn,  1  Sekien,  240,  in  which  lie  dissents  from  the  principle  as  laid  down  above  in 
Gram  v.  Seton,  and  confines  the  cases  in  which  a  parol  authority  or  ratification  is  sufli- 


CH.  XI.]  PARTNERSHIP.  177 

would  have  made  the  same  conveyance,  or  done  the  same  act 
eflectually  without  a  decd.^  And  a  deed  executed  by  one  part- 
ner in  the  presence  and  with  the  assent  of  the  other  partners,  will 
bind  them.2 

Whether  a  majority  of  the  members  may  conclusively  bind 
the  minority,  may  not  be  settled ;  but,  upon  the  better  authority 
and  the  better  reason,  we  should  say  not,  unless  in  reference  to 
the  internal  concerns  of  the  firm.^  It  seems  to  be  settled  that 
one  member  may,  so  far  as  he  is  concerned,  arrest  an  inchoate 
negotiation,  and  prevent  a  bargain  which  would  be  binding  on 
him,  by  giving  notice  to  the  third  party  of  his  dissent  and  refusal 
in  season  to  enable  him  to  decline  the  bargain  without  detriment.* 

Partners  must  act  as  such,  to  bind  each  other.  Thus,  if  a 
partner  makes  a  note  and  signs  it  with  his  own  and  his  partner's 
name,  as  a  joint  and  several  note,  it  does  not  bind  his  partner, 
for  he  had  no  authority  to  make  such  a  note.^ 

If  the  name  of  one  partner  be  also  the  name  of  the  firm,  it  is 
not  necessarily  the  name  of  the  firm  when  used  in  a  note  or  con- 
tract; and  if  the  partner  carries  on  mercantile  business  for  him- 
self, it  is  woi  prima  facie  so.*^ 

Persons  may  give  a  joint  order  for  goods  without  becoming 
jointly  liable,  if  it  appear  otherwise  that  credit  was  given  to 

cient,  to  that  class  in  which  the  contract  would  have  been  valid  if  made  without  a  seal. 
See  1  Parsons  on  Cont.  94,  n.  (f.)  A  partner  cannot  bind  his  copartners  by  a  confession 
of  jud;,'ment,  unless  brought  into  court  by  a  regular  service  of  process  against  iiim  and 
his  copartner.  Crane  v.  French,  1  Wend.  312,  326 ;  Bitzer  v.  Shunk,  1  Watts  &  Serg. 
340;  Barlow  v.  Reno,  1  Bhickf.  252;  Morgan  v.  Richardson,  16  Mis.  409.  See  Brut- 
ton  V.  Burton,  1  Cliitty,  707. 

1  Tapley  v.  Butterfield,  1  Mete.  515;  Anderson  v.  Tompkins,  1  Brock.  462;  Law- 
rence V.  Tavlor,  5  Hill,  107;  McCuUoch  v.  Sommerville,  8  Leigh,  415.  See  Everit  v. 
Strong,  5  Hill,  163. 

■^  Lord  Lovelace's  case,  Sir  Wm.  Jones.  268,  cited  in  Ball  v.  Dunsterville,  4  T.  R. 
313;  Mackay  r.  Bloodgood,  9  Johns.  285  ;  Halsey  i-.  Whitney,  4  Mason,  232;  Pike  v. 
Bacon,  21  ISIaine,  280;  McArthur  v.  Ladd,  5  Ohio,  514;  Fitchton  v.  Boyer,  5  Watts, 
159;  Henderson  v.  Barbee,  6  Blackf.  26. 

3  Const  V.  Harris,  Turn.  &  Russ.  496,  517,  525,  527;  Kirk  v.  Hodgson,  3  Johns.  Ch. 
400,  405  ;  Robinson  v.  Thompson,  1  Vt.  465  ;  Falkland  v.  Cheney,  5  Bro.  P.  C.  476 ; 
1  Parsons  on  Cont.  168;  3  Kent's  Comni.  45. 

*  Galhvav  v.  Mathew,  10  East,  264 ;  Wilson  v.  Dyson,  1  Stark.  164  ;  Viel  v.  Flem- 
ming.  1  You.  &  Jerv.  227,  230 ;  Leavitt  v.  Peck,  3  Conn.  124 ;  Monroe  v.  Conner,  15 
Maine,  178;  Feigl&y  v.  Sponeberger,  5  Watts  &  Serg.  564.  See  Wilkins  v.  Pearce,  5 
Denio,  541. 

^  Perring  v.  Hone,  2  Car.  &  P.  401,  4  Bins:.  .28. 

6  /i:.rj)a77eBolitho,  Buck,  100;  M.  and  M.  IJank  v.  Winship,  5  Pick.  11  ;  United  States 
Bank  v.  Binney,  5  Mason,  176;  Miner  v.  Downer,  19  Vt.  14.  See  Scott  v.  Colmesnil, 
7  J.  J.  Marsh.  416.  But  if  the  partner  whose  name  is  used,  be  not  shown  to  have  done 
business  on  his  private  account,  his  name  is  presumed  to  be  used  for  the  firm.  True- 
man  V.  Loder,  11  Ad.  &  Ellis,  589  ;  Bank  of  R.  v.  Monteath,  1  Denio,  402;  Mifflin  ;;. 
Smith,  17  Serg.  &  R.  165 ;  S.  C.  Bank  v.  Case,  8  B.  &  C.  427. 


178  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XI. 

them  severally. 1  Nor  will  one  have  either  the  authority  or  the 
obligation  of  a  partner  cast  upon  him  by  an  agreement  of  the 
firm  to  be  governed  by  his  advice.^  Nor  shall  one  be  charged  as 
partner  with  others,  unless  he  has  incurred  the  liability  by  his 
own  voluntary  act.^ 

The  reception  of  a  new  member  constitutes,  in  law,  a  new 
firm;  but  the  new  firm  may  recognize  the  old  debts,  as  by  ex- 
press agreement,  or  paying  interest,  or  other  evidence  of  adop- 
tion, and  then  the  new  firm  is  jointly  liable  for  the  old  debt.  But 
there  must  be  some  fact  from  which  the  assent  of  the  new  mem- 
ber to  this  adoption  of  the  old  debt  may  be  inferred,  for  his  lia- 
bility is  not  to  be  presumed."^ 

A  notice  in  legal  proceedings,  abandonment  to  insurers  by 
one  who  was  insured  for  himself  and  others,  a  notice  to  quit  of 
one  of  joint  lessors  who  are  partners  in  trade,  notice  to  one  part- 
ner of  the  dishonor  of  a  note  or  bill  bearing  the  name  of  the  firm, 
a  release  to  one  partner,  or  by  one  partner,  —  will  bind  all  the 
partners  and  render  them  jointly  liable.  But  a  service  of  process 
should  be  made  upon  each  partner  personally.^ 

If  money  be  lent  to  a  partner,  for  partnership  purposes,  it 
creates  a  partnership  debt;  but  not  if  lent  expressly  on  the  indi- 
vidual credit  of  the  person  borrowing;  and  not  if  the  borrowing 
partner  receives  it  to  enable  him  to  pay  his  contribution  to  the 
capital  of  the  firm.^  Though  the  money  be  not  used  for  the 
firm,  if  it  was  borrowed  by  one  partner  on  the  credit  of  the  firm, 
in  a  manner  and  under  circumstances  justifying  the  lender  in 
trusting  to  that  credit,  it  creates  a  partnership  debt."     And  if  a 

1  Gibson  v.  Lupton,  9  Bing.  297. 

"  Barklio  v.  Scott,  1  Hud.  &  Bro.  83. 

^  If  A  person's  name  be  used  in  a  firm  without  his  consent,  he  is  not  thereby  made 
liable  as  partner.  Newsome  v.  Coles,  2  Camp.  617;  Fox  v.  Clifton,  G  Bing.  776,  794. 
In  Fay  v.  Nol)le,  7  Cush.  188,  the  parties,  supposing  they  had  organized  as  a  corpora- 
tion, appointed  F.  to  act  as  agent  for  the  corporation.  It  was  found  tliat  the  corpora- 
tion was  not  legally  organized  from  a  failure  to  comply  with  the  provisions  of  the 
charter.  It  was  held  that  the  shareholders  were  not  liable  as  partners  on  contracts 
entered  into  by  F.  in  behalf  of  the  supposed  corporation. 

*  Shirreff  v.  Wilks,  1  East,  48;  Beale  v.  Mouls,  10  Q.  B.  976;  Ex  parte  Jackson,  1 
Ves.  Jr.  131  ;  Ex  parte  Peele,  6  Ves.  602  ;  Poindexter  v.  Waddy,  6  Munf.  418  ;  Hart  v. 
Tomlinson,  2  Vt.  101  ;  Twyford  v.  Trail,  7  Sim.  92. 

5  Bignold  V.  Waterhouse,  1  M.  &  Sel.  259 ;  Alderson  v.  Pope,  1  Camp.  404 ;  Fitch 
V.  Stamps,  6  How.  (Miss.)  487;  Barney  v.  Currier,  1  D.  Chip.  315.  But  a  service  of 
process  should  be  upon  each  partner  personally.  Uemoss  v.  Brewster,  4  Sm.  &  Marsh. 
661. 

«  Saville  v.  Robertson,  4  T.  R.  720. 

"  The  question  in  these  cases  is,  v/ith  whom  did  the  lender  of  the  money  make  the 
contract,  and  to  whom  did  he  give  the  credit.    If  the  facts  of  any  case  show  that  he, 


CH.  XI.]  PARTNEKSHIP.  l79 

partner  uses  funds  in  his  hands  as  trustee,  for  partnership  pur- 
poses, the  firm  are  certainly  jointly  bound  if  it  was  done  with 
their  knowledge.  Whether  they  will  be  bound  if  it  was  done 
without  their  knowledge,  is  perhaps  doubtful.^  Generally,  where 
the  partners  are  distinctly  and  directly  benefited  by  a  trans- 
action, they  will  be  deenned  to  have  authorized  it.  Thus,  if  one 
partner  purchases  goods,  and  immediately  they  are  used  as  the 
property  of  the  firm,  there  would  be  a  presumption  that  they 
were  bought  by  him  as  a  partner  and  for  the  firm.^ 

But  the  firm  is  liable  only  to  one  who  deals  with  a  partner  in 
good  faith.  Thus,  if  one  receives  negotiable  paper  bearing  their 
name,  knowing  that  it  is  not  in  their  business,  and  is  given  for 


knowinc:  tlie  existence  of  the  firm,  gave  the  credit  to  the  single  partner,  he  can  look  to 
him  only  for  payment,  although  the  money  maj'  have  been  used  for  jjartnership  pur- 
poses. Loyd  V.  Freslifield,  2  Car.  &  P.  325 ;  Bevan  v.  Lewis,  1  Sim.  376;  Emly  i'. 
Lye,  15  East,  7;  Jaques  v.  Marquand,  6  Cow.  497;  Mead  v.  Tomlinson,  1  T>Ay, 
148,  note;  Le  Roy  v.  Johnson,  2  Pet.  186,  198  ;  Foley  v.  Eobards,  3  Ired.  177  ;  Green 
V.  Tanner,  8  Mete.  411  ;  GraefF  v.  Hitchman,  5  Watts,  454;  Foster  i\  Hall,  4  Humph. 
346  ;  Cooke  v.  Seeley,  2  Exch.  746.  On  the  other  hand,  if  the  partner  hold  himself  out 
as  borrowing  for  the  firm,  and  the  lender,  in  the  exercise  of  proper  diligence  and  good 
faith,  gave  the  credit  to  the  firm,  the  firm  will  be  liable,  even  if  the  money  is  fraudu- 
lently appropriated  by  the  partner  to  his  own  use.  Miller  v.  IManice,  6  Hill,  114; 
Church  V.  Sparrow,  5  Wend.  223  ;  Wliitaker  v.  Brown,  16  Wend.  505  ;  Onondaga  Co. 
Bank  v.  l)e  Puy,  17  Wend.  47  ;  Winsliip  v.  United  States  Bank,  5  Pet.  529;  Dickson 
V.  Alexander,  7  Ired.  4;  Hamilton  v.  Summers,  12  B.  Mon.  11.  In  the  absence  of 
other  evidence  showing  to  whom  the  credit  was  given,  the  fact  that  money  lent  to  one 
partner  was  applied  to  the  uses  of  the  firm,  will  make  the  firm  liable  for  its  payment. 
Jaques  v.  Marquand,  6  Cow.  497 ;  Walden  v.  Sherburne,  15  Johns.  409  ;  Rothwell 
I'.  Humphreys,  i  Esp.  406.  But  the  fact  that  the  partner  applied  it  to  increase  the 
capital  of  the  firm,  would  not  have  that  effect.     Fisher  v.  Taylor,  2  Hare,  218,  229. 

1  Ex  parte  Watson,  2  Ves.  &  Bea.  414  ;  Hutchinson  v.  Smith,  7  Paige,  26,  32.  If 
the  trustee,  with  the  consent  of  the  cestui  que  trust,  apply  the  funds  to  partnership  pur- 
poses, and  the  cestui  que  trust  honestly  gives  credit  to  tiie  partnership,  anrl  takes  partner- 
ship security,  the  firm  is  liable,  even  if  the  money  is  applied  and  the  security  given  by 
the  trustee  without  the  consent  of  his  copartners,  for  the  transaction  is  substantially  a 
loan  from  the  cestui  que  trust  to  a  single  partner,  for  the  uses  of  the  firm,  and  on  the 
credit  of  tlie  firm.  Richardson  v.  French,  4  Mete.  577  :  Wliitaker  v.  Brown,  16  Wend. 
505.  If  tlie  fund  is  applied  without  the  knowledge  either  of  the  cestui  que  trust  or  of 
the  copartners,  it  is  clear  that  the  trustee  is  not  discharged.  Jaques  v.  Marquand,  G 
Cow.  497 ;  Hutchinson  v.  Smith,  7  Paige,  26,  33,  per  Walworth,  Ch.  And  it  has  been 
held  that  the  copartners  would  not  be  liable  to  the  cestui  que  trust.  Ex  parte  Aspey,  3 
Bro.  C.  C.  265 ;  Jaques  v.  Marquand,  supra.    But  see  Hutchinson  i'.  Smith,  suju-a. 

~  Gardiner  v.  Childs,  8  Car.  &  Payne,  345.  And  see  supra,  p.  178,  n.  7.  If  a  pur- 
chaser of  goods  have  a  dormant  partner,  the  vendor  may  look  to  both  for  payment,  if 
the  goods  were  used  for  ])artnership  purposes,  even  if  credit,  at  the  time  of  the  sale, 
were  exclusively  given  to  the  ostensible  partner.  Schermerhorn  ?•.  Loines,  7  Johns.  311 ; 
Reynolds  i\  Cleveland,  4  Cow.  282 ;  Griffith  v.  Buffum,  22  Vt.  181  ;  Bisel  v.  Hobbs,  6 
Blackf  479.  A  dormant  partner  may  be  joined,  in  an  action  upon  an  express  contract, 
entered  into  by  the  ostensible  partners,  in  tlieir  own  names  only.  Beckham  v.  Drake, 
8  Mee.  &  W.  846.  But  see  Beckham  v.  Knight,  4  Bing.  N.  C.  243.  But  if  the  part- 
ners are  all  known  to  the  vendor,  and  he  elects  to  trust  to  the  credit  of  a  single  partner, 
and  makes  the  coijtract  with  him,  he  cannot  hold  the  other  partners  liable,  although 
the  goods  mav  be  used  for  the  firm.  Sylvester  v.  Smith,  9  Mass.  119;  Ketchum  v. 
Durkce,  lioft".  Ch.  538 :  Griffith  v.  Bufi'um,  22  Vt.  181,  184,  per  Hall,  J. 


180 


ELEMENTS   OF   MERCANTILE   LAW. 


[CH.  XI. 


no  consideration  as  to  them,  he  cannot  hold  them.  And  if  a 
creditor  of  one  partner  receive  for  his  separate  debt  a  partnership 
security,  this  we  should  hold  to  be  a  fraud,  unless  the  creditor 
could  show  that  the  partner  had,  or  was  supposed  by  him  to 
have,  the  authority  of  the  rest.^  And  if  the  partnership  security 
be  transferred  for  two  considerations,  one  of  which  is  private  and 
fraudulent,  and  the  other  is  joint  and  honest,  it  seems  to  be  held 
that  the  partnership  is  bound  for  so  much  of  it. as  is  not  tainted 
with  fraud.2 

The  partnership  may  be  liable  for  injury  caused  by  the  criminal 
or  wrongful  acts  of  a  partner,  if  these  were  done  in  the  trans- 
action of  partnership  business,  and  if  it  was  the  partnership  which 
gave  to  the  wrongdoer  the  means  and  opportunity  of  doing  the 
wrong.^  But  an  illegal  contract  will  not  bind  the  copartners,  for 
the  parties  entering  into  it  must  be  presumed  to  know  its  ille- 
gality.4 

Whether  the  acknowledgment  of  one  who  had  been  a  partner, 
after  the  dissolution  of  the  partnership,  can  take  the  debt  out  of 
the  statute  of  limitations,  so  as  to  restore  the  liability  of  all  the 
partners,  has  been  much  agitated.  We  consider,  however,  that 
it  is  now  quite  well  settled  in  this  country  that  it  can  have  no 
such  effect;  on  the  ground  that  he  has  no  longer  the  right  or 
power  to  make  a  new  promise  for  his  former  partners  ;  and  it  is 
only  as  a  new  promise  that  an  acknowledgment  is  a  bar  to"  the 
statute  of  limitations.^ 


All  express  or  implied  authority  from  tlie  pai-tners  will  niake  the  securitv  liindinti  upon 
them.      Ganscvoort  v.   Williams,   14  Wend.    133;    Kohle   v.   M'CIinrork,   2   Watts  & 
Serg.  1.52;    Darling  ?;.  March,  22  Maine,  184.     But   the   creditor,   taking  the   security, 
must  show  this  authority.     Davenport  v.  Kunlett.  3  N.  H.  3S6;  and  cases  cited  supra. 
2   Wilson  V.  Lewis,  2  "Man.  &  Gran.  197;   Barker  v.  Burgess,  3  Mctc.  273. 


contract  cnterea  into  ny  a  partner,  in  traua  of  nis  co|)artners,  ir  in  tne  rcLiiiiar  conrsc  or 
the  firm  husiness,  will  hind  tiiem,  unless  the  third  partv  were  in  some  way  implicaicd 
cither  by  actual  fraud  or  neglect.  Bond  v.  Gilison,  1  Camp.  185;  Boardman  v.  Gore, 
15  Mass.  331  ;  Beach  v.  State  Bank,  2  Carter,  (Ind.)  488. 

*  liutcliins  V.  Turner,  8  Humph.  415. 

^  Bell  V.  Morrison,  1  Pet.  351  ;  Van  Keuren  v.  Parmclee,  2  Comst.  523  ;  Shoemaker 
V.  Benedict,  1  Kern.  176  ;  Exeter  Bank  v.  Sullivan,  6  N.  H.  124  >  Keiley  r.  Sanliorn, 
9  id.  46  ;  Whipple  v.  Stevens,  2  Fost.  219;  Bclote  v.  Wynne.  7  Yerg.  .534;  Muse  v. 
Donalson,  2  Humph.  106.  See  further  upon  this  cjucstion,  2  Parsons  on  Coiit.  359, 
et  seq. 


CII.  XI.]  PARTNERSHIP.  181 

SECTION  VI. 

REMEDIES  OP  PARTNERS  AGAINST  EACH  OTHER. 

It  is  seldom  that  a  partner  can  have  a  claim  against  another 
partner,  as  such,  which  can  be  examined  and  adjusted  without 
an  investigation  into  the  accounts  of  the  partnership,  and, 
perhaps,  a  settlement  of  them.  Courts  of  law  have  ordinarily  no 
adequate  means  for  doing  this;  and  therefore  it  is  generally  true 
that  no  partner  can  sue  a  copartner  at  law  for  any  claim  growing 
out  of  partnership  transactions  and  involving  partnership  in- 
terests.i  But  the  objection  to  a  suit  at  law  between  partners 
goes  no  further  than  the  reason  of  it;  and,  therefore,  one  may 
sue  his  copartner  upon  his  agreement  to  do  any  act  which  is  not 

•    so  far  a  partnership  matter  as  to  involve  the  partnership  accounts. 

'  Or  if  the  accounts  are  finally  adjusted,  either  partner  may  sue 
for  a  balance; 2  and  so  it  would  be  if  the  accounts  generally  re- 
mained open,  but  a  specific  part  of  them  were  severed  from  the 
rest,  and  a  balance  found  on  that.^  The  rule  is  generally  laid 
down  that  an  action  cannot  be  sustained  for  a  balance  unless 

.  there  is  an  express  promise  to  pay  it.  But  such  promise  would, 
we  think,  be  inferred  in  all  cases  in  which  an  account  had  been 
taken,  and  a  balance  admitted  to  be  due.^ 

What  a  court  of  law  cannot  do,  however,  in  this  respect,  a 
court  of  equity  can ;  and,  generally,  equity  has  a  full  jurisdiction 
over  all  disputes  and  claims  between  partners,  and  may  do  what- 
ever  is    necessary    to    settle   them   in  conformity  with  justice. 

1  Bovill  V.  Hammond,  6  B.  &  C.  149;    Fromont  v.  Coupland,  2  Bing.  170;   Brown 

V.  Tapscott,  C  M.  &  W.  119;    Casey  v.  Brush,  2  Caines,  293;   Pattison  v.  Blanchard, 

6  Barb.  537  ;    Haskell  v.  Adams,  7  Pick.  59  ;    Beach  v.  Hotclikiss,  2  Conn.  425.     The 

action  of  account  may  be  brought  by  one  partner  against  another  where  that  action  is 

■    in  use.     Kelly  v.  Kelly,  3  Barb.  419  ;  Beach  v.  Hotchkiss,  2  Conn.  425. 

"  Wray  v.  Milestone,  5  M.  &  W.  21 ;  Wetmore  v.  Baker,  9  Johns.  307 ;  Lamalerc  v. 
Gaze,  1  Wash.  C.  C.  435;  Williams  v.  Ilenshaw,  11  Pick.  82;  Clark  r.,Dibblc,  16 
Wend.  601. 

3  Gibson  v.  Moore,  6  N.  II.  547;  Coffee  v.  Brian,  3  Bing.  54;  Jackson  v.  Stopherd, 
4  Tyrw.  330;  Coll.  on  Partnership,  (Perk,  ed.)  §  272. 

*  Pattison  r.  Blanchard,  6  Barb.  537;  Casey  v.  Brush,  2  Caines,  293 ;  Killam  v. 
Preston,  4  Watts  &  Serg.  14;  Wray  v.  Milestone,  5  M.  &  W.  21.  In  Massachusetts, 
an  action  can  be  sustained  in  all  cases  in  which  the  rendition  of  judgment  will  be  an 
entire  termination  of  the  partnership  transactions,  so  that  no  further  cause  of  action 
can  grow  out  of  them.  AVilliams  v.  Ilenshaw,  11  Pick.  79;  Rockwell  v.  Wilder,  4 
Mete.  556,  561  ;  Dickinson  v.  Granger,  18  Pick.  315. 

16 


182  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

Whether  equity  will  decree  an  account  without  decreeing  disso- 
lution, may  not  be  quite  settled ;  because,  in  the  great  majority 
of  cases,  these  ought  to  go  together.  But  we  think  that  an  ac- 
count would  be  decreed,  and  a  balance  struck,  without  a  decree 
of  dissolution,  if  the  circumstances  were  such  as  made  this  last 
unnecessary  or  inequitable.^ 

j^  partner  may  sue  his  copartner  for  money  advanced  before 
the  partnership  was  formed,  although  the  loan  was  made  to  pro- 
mote the  partnership.^  And  he  may  sue  those  who  were  then 
members,  for  work  done  for  the  firm  before  he  became  a  member 
of  it.^  And  he  may  sue  a  copartner  on  his  note  or  bill,  although 
the  consideration  was  on  partnership  account;*  but,  in  general, 


i 


1  This  question  has  heen  much  discussed,  and  the  decisions  are  conflicting.  In 
Loscombe  v.  Russell,  4  Sim.  8,  it  was  held  that  a  bill  praying  for  an  account,  but  not 
asking  for  a  dissolution,  was  bad  on  demurrer.  But  the  following  extracts,  from  recent 
decisions,  show  that  the  rule  stated  in  the  text,  is  at  present  accepted  in  England.  In 
Hichnrdson  v.  Hastings,  7  Beav.  301,  .307,  Lord  Lani/dale,  Master  of  the  liolls,  said  : 
"At  one  time,  the  court  would  not  entertain  a  suit  between  parties  in  relation  to  part- 
nership transactions,  except  upon  a  bill  to  wind  up  the  partnership.  That  is  not  now 
the  rule  of  the  court;  for  I  think,  anfl  the  cases  which  have  been  referred  to  corroborate 
that  view,  that  the  court  will,  as  between  partners,  entertain  a  bill  to  settle  a  question 
which  may  arise  between  them,  without  proceeding  to  wind  up  the  concerns  and  affairs 
of  the  partncrshi|)."  The  same  year,  (1844,)  Wignun,  V.  Ch.,  in  Fairthorne  v.  Weston, 
3  Hare,  387,  said  :  "The  argument  for  the  defendant  turned  wholly  upon  the  proposi- 
tion, that  a  bill  praying  a  particular  account,  is  demurrable,  unless  the  bill  seeks  and 
prays  a  dissolution  of  the  partnership ;  in  support  of  which  the  case  of  Loscombe  v. 
Russell,  4  Sim.  8,  and  the  cases  there  cited  were  relied  upon.  That  there  may  be  cases 
to  which  the  rule  there  laid  down  is  applicable,  I  am  not  prepared  to  deny  ;  but  the 
law  as  laid  down  in  that  case  was  never  admitted  to  be  a  rule  of  universal  application. 
Harrison  v.  Armitage,  4  Madd.  143  ;  Richards  v.  Davies,  2  Russ.  &  Myl.  347.  And 
the  unequivocal  expressions  of  the  opinion  of  Lord  Cottenham,  in  Taylor  v.  Davi'es,  4 
Law  J.  Rep.  N.  S.  Chan.  18,  and  Walworth  r.  Holt,  4  My.  &  Cr.  619;  of  the  Vice- 
Chancellor  of  England,  in  Miles  v.  Thomas,  9  Sim.  609;  and  of  Lord  Langdale,  in 
Richardson  v.  Hastings,  supra,  shows  that  there  is  no  such  universal  rule  at  the  present 
da}' ;  and  I  caniiot  but  add  that  it  is  essential  to  justice  that  no  such  universal  rule 
should  be  sustained.  If  that  were  the  rule  of  the  court,  —  if  a  bill  in  no  case  would  lie 
to  com])cl  a  man  to  observe  the  covenants  of  a  pai'tnership  deed,  —  it  is  obvious  that  a 
person  fraudulently  inclined  might,  of  his  mere  will  and  pleasure,  compel  his  copartner 
to  submit  to  the  alternative  of  dissolving  partnership,  or  ruin  him  by  a  continued  viola- 
tion of  the  partnership  contract." 

^  One  partner  may  bring  an  action  against  his  copartner  for  money  advanced  to 
make  up  his  capital.  Venning  v.  Leckie,  13  East,  7;  Elgie  v.  Webster,  5  M.  &  W. 
518;  Bumpass  v.  Webb,  1  Stewart,  (Ala.)  19.  So,  a  partner  may  bring  an  action 
against  his  copartner  for  not  contributing  his  share  of  the  capital.  Gale  v.  Leckie,  2 
Starkie,  107  ;  Townscnd  r.  Goewey,  19  Wend.  424  ;  Ellison  v.  Chapman,  7  Blackf.  224. 
Where  on(;  partner  fraudulently  gave  the  note  of  the  firm  for  his  private  debt,  and  his 
copartner  was  obliged  to  pay  it,  it  was  held  that  the  latter  might  recover  for  money  paid 
to  the  use  of  the  former.  Cioss  v.  Cheshire,  6  Eng.  Law  &  Eq.  517.  See  Smith  v. 
Barrow,  2  T.  R.  476. 

3  Lucas  V.  Beach,  1  Man.  &  Gr.  417. 

4  Van  Ness  v.  Forrest,  8  Cranch,  30;  Gridley  v.  Dole,  4  Comst.  486;  Rockwell  v. 
Wilder,  4  Mete.  556  ;  Bonnaffe  v.  Fenner,  6  Sm.  &  Marsh.  212:  Grigsby  v.  Nance,  3 
Ala.  347.  In  Gridley  v.  Dole,  4  Comst.  486,  492,  the  action  was  brought  on  a  promis- 
sory note  given  by  one  partner  for  money  advanced  by  his  copartner  to  pay  partnership 
debts.     Gardiner,  J.,  in  delivering  the  opinion  of  the  court,  said :    "  It  is  true,  if  the  . 


CH.  XI.]  PARTNERSHIP.  183 

no  action  can  be  maintained  for  work  and  labor  performed,  or 
money  expended  for  the  partnership.' 

It  is  now  quite  certain  that  a  partner  who  pays  more  than  his 
proportion  of  a  debt  of  the  partnership,  cannot  demand  specific 
contribution  from  his  copartners,  but«must  charge  his  payment 
to  the  firm.- 

If  one  of  a  firm  be  a  member  also  of  another  firm,  the  one  firm 
cannot  sue  the  other;  for  the  same  person  cannot  be  plaintiff 
and  defendant  of  record.'^  And  although  the  fraud  of  a  copartner, 

plaintiff  had  paid  demands  against  the  firm  of  wliich  lie  and  the  maker  of  the  note  were 
members,  he  could  not  have  recovered  at  law  against  his  copartner,  for  ho  must  then 
sue  upon  an  implied  promise,  and  until  an  account  of  the  copartnership  was  taken,  it 
could  not  he  ascertained  whether  the  plaintiff  had  or  had  not  paid  more  than  his  pro- 
jiortion.  (Coll.  on  Partnership,  Perkins's  cd.  §  264,  19  Wend.  424.)  But  the  plaintiff, 
although  liable  to  the  creditors  of  the  firm,  was  under  no  legal  or  moral  obligation  to 
advance  money  to  his  former  partner.  He  owed  him  nothing.  He  had,  therefore,  a 
right  to  prcscrilie  the  conditions  upon  which  he  would  ]iart  with  the  money,  and  to 
exact  and  enforce  the  securities  given  as  the  means  of  obtaining  it.  The  authorities 
are  full  to  this  point.  If  one  partner  gives  the  other  his  promissory  note,  or  a  separate 
acceptance  for  value  received,  on  the  partnership  account,  an  action  will  lie  on  such 
note  or  bill." 

1  The  reasons  which  prevent  a  partner  from  recovering  for  money  advanced,  or  for 
services  rendered  for  the  benefit  of  the  firm,  are,  first,  that  it  would  be  necessary  to 
liring  the  action  against  the  firm  of  which  he  is  a  member,  and  a  man  cannot  be  both 
plaintiff  and  defendant  in  the  same  suit;  second,  that  it  cannot  be  determined  until  the 
accounts  are  settled  that  he  has  contributed  more  than  his  share  of  either  money  or 
service,  or  that  he  is  entitled  to  any  thing  as  against  the  creditors  of  the  firm.  Richard- 
son V.  Bank  of  England,  4  Myl.  &  f  r.  165;  Caldwell  v.  Leiber,  7  Paige,  483  ;  Holmes 
r.  Higgins,  1  B.  &  Cress.  74;  Goddard  v.  Hodges,  3  Tyrw.  209;  Savage  v.  Carter,  9 
Dana,  408;  Bevans  v.  Sullivan,  4  Gill,  383;  Reybold  v.  Jefferson,  1  Harrington,  401  ; 
Caustcn  v.  Burke,  2  H.  &  Gill,  295.  But  if  a  partner  advances  money  or  performs 
services  in  a  case  in  which  he  is  under  no  legal  obligation  to  do  so,  and,  under  an  ex- 
press contract  with  his  copartners,  he  may  recover  from  tiiem,  although  the  money  was 
advanced,  or  the  services  were  rendered  for  the  benefit  of  the  copartnership.  Paine  v. 
Th'achcr,  25  Wend.  450;  Bradford  v.  Kiinberly,  3  Johns.  Ch.  431  ;  Lewis  v.  Moffett, 
11  111.  392.  Partners  are  not,  unless  by  special  agreement,  entitled  to  interest  on 
capital  advanced.  Desha  v.  Smith,  20  Ala.  747  ;  Jones  v.  Jones,  I  Ircd.  Ecj.  332.  But 
such  agreement  will  sometimes  be  presumed  from  circumstances.  Millar  v.  Craig,  6 
Beavan,  433. 

2  Sadler  v.  Nixon,  5  B.  &  Adol.  936 ;  Haskell  v.  Adams,  7  Pick.  59  ;  Lawrence  v. 
Clark,  9  Dana,  257;  Iloberts  v.  Fitler,  13  Penn.  St.  265. 

3  Bosanquet  v.  Wrav,  6  Taunt.  597;  Portland  Bank  v.  Hyde,  2  Pairf.  196  ;  Eastman 
V.  Wriglit,  6  Pick.  320  ;  Mainwaring  v.  Newman,  2  Bos.  &  Pull.  120,  124,  n. ;  Burley 
V.  Harris,  8  N.  H.  235 ;  Pennock  v.  Swayne,  6  Watts  &  Serg.  239,  465.  There  is  the 
same  objection  to  contracts  between  a  firm  and  any  member  of  it.  Hill  v.  McPherson, 
15  Miss.  204.  In  Decreet  v.  Burt,  7  Cush.  551,  it  was  held  that  the  holder  of  a  promis- 
sory note,  being  a  member  of  a  firm,  who  are  the  first  indorsers  thereon,  cannot  main- 
tain an  action  on  the  note  against  a  subsequent  indorser.  The  difUculty  is  not 
removed  by  the  decease  of  the  partner  who  belongs  to  both  firms,  if  the  contract  sued 
upon  was  made  during  his  life.  In  Bosanquet  v.  Wray,  supra,  the  court  said:  "The 
transactions  originated  during  the  life  of  the  late  Mr.  B.,  wiio  was  a  partner  in  both 
houses.  It  is  clear  tliat  no  part  of  the  demand,  which  accrued  to  the  London  house 
upon  transactions  wliich  took  place  during  the  lifetime  of  B.,  and  to  which  therefore  he 
was  a  party,  could  ever,  either  during  his  life  or  since  his  decease,  be  recovered  at  law; 
on  this  ground,  that  no  legal  contract  could  subsist  between  him  and  those  connected 
with  him,  on  the  one  side,  and  himself  and  those  connected  with  him,  on  the  other 
side ;  the  parties  could  only  so  far  enter  into  this  contract  as  to  render  it  available  in 


184  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

as  in  negotiating  a  note,  or  in  any  similar  transaction,  if  brought 
home  to'  the  party  dealing  with  him,  constitutes  a  good  defence 
for  the  firm,  they  cannot  institute  an  action  founded  upon  the 
fraud,  as,  for  instance,  to  recover  property  or  documents  fraudu- 
lently passed  away,  because  the  fraudulent  copartner  would  have 
to  be  co-plaintifF  of  record.'  In  all  these  cases  an  adequate 
remedy  may  be  found  in  equity. 

The  partners  are  entitled  to  perfect  good  faith  from  each 
copartner  ;  and  equity  will  interfere  to  enforce  this.  No  partner 
will  be  permitted  to  treat  privately,  and  for  his  own  benefit  alone, 
for  a  renewal  of  a  lease,^  or  to  transfer  to  himself  any  benefit  or 
interest  properly  belonging  to  the  firm.  And  so  careful  is  equity 
in  this  respect,  that  it  will  not  permit  a  copartner,  by  his  private 
contract  or  arrangement,  to  subject  himself  to  a  bias  or  interest 
which  might  be  injurious  to  the  firm,  and  conflict  with  his  duty 
to  them.^ 


SECTION  VII. 

RIGHTS    OF    THE    FIRM   AGAINST   THIRD   PARTIES. 

The  principles  of  agency  apply  to  cases  of  partnership  so  far 
that,  if  one  borrows  money  of  a  person  who  is  a  copartner,  and 
who  lends  the  money  of  his  firm,  either  this  copartner  or  the  firm 
may  bring  an  action  for  it,  although  the  borrower  did  not  know 
that  they  lent  it;  the  firm  standing  in  the  relation  of  an  undis- 
closed principal.'^  So,  if  a  copartner  sells  the  goods  of  the  firm 
in  his  own  name,  they  may  sue  for  the  price.^  But  the  rights  of 
one  who  deals  in  good  faith  with  a  copartner  as  with  him  alone, 

equity;  and  as  tins  principle  goes  to  the  root  of  the  contract,  the  same  objections  to  the 
plaintitF's  recovery  still  continue  after  his  decease."  See  Parker  v.  Macomber,  18  Pick. 
509. 

1  Jones  V.  Yates,  9  Barn.  &  Cress.  532;  Greeley  v.Wyeth,  10  N.  II.  15.  In  Pennsyl- 
vania, the  firm  can  sue  in  such  a  case.  Purdy  v.  Powers,  6  Penn.  St.  492.  A  firm 
cannot  bring  an  action  upon  an  illegal  contract  entered  into  by  one  partner.  Biggs  v. 
Lawrence,  3  T.  R.  454. 

-  Alder  v.  Fouracre,  3  Swanst.  489 ;  Fawcett  v.  Whitehouse,  1  Russell  &  Mylne,  132 ; 
Featherstonhaugh  ?».  Fenwick,  17  Vcs.  298;  Leach  v.  Leach,  18  Pick.  68. 

3  Burton  v.  Wookey,  6  Madd.  367 ;  Long  v.  Majcstrc,  1  Johns.  Cb.  305;  Russell  v. 
Au.stwick,  1  Sim.  52  ;  'Maddeford  i'.  Austwick,  1  Sim.  89  ;  Kelley  v.  Grcenleaf,  3  Story, 
93,  101 ;  Glassington  v.  Thwaites,  1  Sim.  &  St.  133;  Ogden  o.  Astor,  4  Sandf.  311. 

*  Alexander  v.  Barker,  2  Cr.  &  Jer.  133. 

5  Cothay  v-  Fenncll,  10  B.  &  Cress.  671 ;  Skinner  v.  Stocks,  4  B.  &  Aid.  437;  Ward 
V.  Leviston,  7  Blackf.  466  ;  Hilliker  v.  Loop,  5  Vt.  116. 


CII.  XI.]  PARTNERSHIP.  185 

are  so  far  regarded  th'at  ho  may  set  ofT  any  claim  or  make  use  of 
any  other  equities  against  the  suit  of  the  firm,  which  he  could 
have  made  had  the  person  with  whom  he  dealt  sued  alone.^  A 
guaranty  to  a  copartner,  if  for  the  use  and  benefit  of  the  firm, 
gives  to  them  a  right  of  action.^ 

It  would  seem  that  a  new  firm,  created  by  some  change  in  the 
membership  of  an  old  firm,  is  entitled  to  the  benefit  of  a  guaranty 
given  to  the  old'firm,  even  if  sealed,  provided  it  shall  appear  that 
the  instrument  was  intended  to  have  that  effect.^ 


SECTION  vm. 

RIGHTS    OF   CREDITORS    IN    RESPECT    TO    FUNDS. 

The  property  of  a  partnership  is  bound  to  pay  the  partnership 
debts;  and,  therefore,  a  creditor  of  one  copartner  has  no  claim  to 
the  partnership  funds  until  the  partnership  debts  are  paid.^     If 

.       1  "Ward  V.  Lcviston,  7  Blackf.  466;    Hilliker  v.  Loop,  5  Vt.  116;   Lord  v.  Baldwin, 

I  6  Pick.  352 :  George  v.  Clagett,  7  T.  11.  359,  n. 

'      -  Garrett  v.  Ilandley,  4  Barn.  &  Cress.  664 ;   Walton  v.  Dodson,  3  Carr.  &  Payne, 
162. 

'•^  In  the  absence  of  evidence  of  any  such  intention,  it  is  well  settled  that  the  new- 
firm  is  not  entitled  to  the  benefit  of  a  guaranty  given  to  the  old  one.  Bellairs  v.  Ebs- 
worth,  3  Camp.  52 ;  Weston  v.  Barton,  4  Taunt.  673 ;  Siinson  v.  Cooke,  8  Moore, 
588;  I'enover  v.  Watson.  16  Johns.  100;  Mvers  v.  Edge,  7  T.  R.  254;  Wright ;;.  Rus- 
sell, 3  Wilson,  530 ;  Dry  v.  Davy,  2  Perry  &  Dav.  249 ;  N.  H.  C.  Bank  y.  Mitchell,  15 
'  Conn.  206 ;  1  Parsons  on  Cont.  505.  In'Weston  v.  Burton,  supra,  Mansfield,  C.  J.,  in 
commenting  upon  cases  of  this  class,  said :  "It  is  not  now  necessary  to  enter  into  the 
reasons  of  those  decisions,  but  there  may  be  very  good  reasons  for  such  a  construction ; 
it  is  very  probable  that  sureties  may  be  induced  to  enter  into  such  security  by  the  con- 
fidence which  they  repose  in  the  integrity,  diligence,  caution,  and  accuracy  of  one_  or 
two  of  the  partners.  In  the  nature  of  tilings,  there  cannot  be  a  partnership  cotisisting 
of  several  persons,  in  which  there  are  not  some  persons  possessing  these  qualities  in  a 
greater  degree  than  the  rest;  and  it  may  be  that  the  partner  dying  or  going  out  may 
be  the  very  person  upon  whom  the  sureties  relied;  it  would,  therefore,  be  very  un- 
■  reasonable  to  hold  the  surety  to  his  contract  after  such  change."  But  this  is  a  question 
of  construction  only,  and  iC  it  appear,  from  the  terms  of  the  instrument  construed  in 
the  light  of  the  circumstances  under  which  it  was  made,  that  it  was  intended  to  extend 
bcvond  the  old  firm,  the  courts  will  give  it  that  effect.  Barclay  v.  Lucas,  3  Doug.  321, 
n.",  IMetcalf  v.  Bruin,  12  East,  405  ;  Pease  v.  Hirst,  10  Barn.  &  Cress.  122.  As  regards 
this  question,  it  makes  no  difference  whether  the  guaranty  be  under  seal  or  not,  for  the 
question  is  not,  in  whose  name  shall  the  action  be  brought,  but  for  whose  benefit. 
Pease  v.  Hirst,  10  B.  &  Cr.  122. 

*  It  is  clearly  settled  tliat  the  creditors  of  a  firm  have  a  claim,  prior  to  that  of  the 
separate  creditors  of  each  partner,  upon  the  assets  of  the  firm.  Murrill  v.  Neill,  8  How. 
U.  S.  414;  Bell  v.  Newman,  5  Serg.  .&  R.  78  ;  Washburn  v.  Bank  of  Bellows  Falls,  19 
Vt.  278;  Pierce  v.  Jackson,  6  Mass.  242;  Tappan  v.  Blaisdell,  5  N.  H.  190;  In  the 
matter  of  Smith,  16  Johns.  102  ;  Commercial  Bank  v.  Wilkins,  9  Grcenl.  28 ;  Pearson 
V.  Kcedv,  6  B.  Mon.  128;  Clark  v.  Alice,  3  Harrington,  80;  Allen  v.  Center  Valley 
Co.  21  Conn.  130.  The  nature  of  this  claim  has  given  rise  to  some  discussion  and 
diversity  of  opinion.     There  are  decisions  which  appear  to  give  the  joint  creditors  an 

16* 


186  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

there  be  then  a  surplus,  he  may  have  the  copartners'  interest 
therein,  in  payment  of  his  private  debt.  If  a  private  creditor 
attaches  partnership  property,  or  in  any  way  seeks  to  appropriate 
it  to  his  private  debt,  the  partnership  debts  being  unpaid,  he  can- 
not hold  it,  either  at  law  or  in  equity.  Such  attachment  or  ap- 
propriation being  wholly  subject  to  the  paramount  claims  of  the 
partnership  creditors,  it  is  wholly  defeated  by  the  insolvency  of 
the  partnership,  although  the  partnership  creditors  have  not 
brought  any  actions  for  their  debts.^     It  seems,  however,  that  if 

equitable  lien  upon  the  property  of  tlic  finn,  so  that  any  appropriation  of  it  by  the  part- 
ners, in  payment  of  separate  debts,  in  a  ease  of  insolvency,  would  be  set  aside  as 
fraudulent.  Jackson  v.  Cornell,  1  Sandf.  Ch.  348;  Burtus  v.  Tisdaie,  4  Barb.  571,  590. 
See  Ferson  ik  Monroe,  1  Fost.  462.  In  3  Kent's  Com.  64,  it  is  said:  "The  basis  of 
the  general  rule  is,  tliat  the  funds  are  to  be  liable  on  which  the  credit  was  given.  In 
contracts  with  a  partnership,  the  credit  is  supposed  to  be  given  to  the  firm,  but  those 
who  deal  with  an  individual  member,  rely  on  liis  sufficiency."  But  the  view  presented 
by  Tilfjhman,  C.  J.,  in  Bell  v.  Newman,  5  Serg.  &  R.  78,  and  cited  with  approbation  by 
Lumpkin,  J.,  in  Clcghorn  v.  Ins.  Bank  of  Columbus,  9  Geo.  324,  ajipears  to  be  more 
tenal)le.  ''  The  truth  is,  that  persons  who  trust  the  partners,  cither  in  their  separate  or 
partnership  character,  generally  do  it  on  the  credit  of  their  whole  estate,  both  joint  and 
separate.  Wlien  men  enter  into  partnership,  they  often  borrow  money  on  their  private 
accounts  for  the  very  purpose  of  creating  partnership  stock  ;  and  this  they  may  con- 
tinue to  do  during  the  partnership.  And  on  the  other  liand,  the  individuals  of  a  part- 
nership often  withdraw  money  from  the  joint  stock  and  convert  it  to  separate  property, 
in  such  a  manner  that  it  cannot  be  traced  or  identified."  The  prevailing  opinion 
seems  to  be  that  this  claim  of  the  partnership  creditors  springs  out  of  thQ  lien,  or  quasi 
lien,  which  each  partner  has  upon  the  whole  property  of  the  firm  for  his  own  security, 
and  tluit  it  must  l)e  worked  out  tlirough  that  lien.  The  law  is  well  stated  by  Wahcorih, 
Ch.,  in  Kirby  v.  Schoonmaker,  3  Barb.  Ch.  46,  49:  "Where  a  partnership  is  dissolved 
by  tlie  death  of  one  of  the  copartners,  or  where  one  or  both  of  the  copartners  becomes 
bankrupt,  or  they  arc  discharged  under  the  insolvent  acts,  so  that  their  property  is 
placed  in  tlie  hands  of  tlie  assignees  appointed  by  law  to  make  distribution  thereof,  it  is 
administered  in  courts  of  equity,  by  applying  the  copartnership  funds,  in  the  first  place, 
to  the  ])ayraent  of  the  debts  of  tlie  firm.  . .  .  But  where  tlie  copartners  are  administering 
their  own  funds,  the  copartnership  creditors  have  no  lien  upon  the  joint  funds.  ...  I 
do  not  understand  this  rule  to  go  so  far  as  to  deprive  the  partners  themselves  of  the 
power,  while  tliey  have  the  legal  control  of  their  property,  of  distributing  it  among  all 
their  creditors  in  such  manner  as  they  see  fit ;  provided  no  actual  injustice  is  done  to 
any  of  the  creditors.  .  .  .  Again,  the  copartners  may  assign  their  individual  property  to 
pay  the  joint  debts  of  the  firm,  thereby  giving  the  creditors  of  the  firm  a  preference  in 
pa^-ment  out  of  the  separate  estate  of  tiie  assignors,  over  the  separate  creditors.  And 
I  see  no  good  I'cason  wh}-  each  copartner,  with  the  assent  of  the  others,  should  not  have 
the  corresponding  right  to  give  his  individual  creditors  a  pi'cference  in  payment  out  of 
the  share  of  tlie  effects  of  the  firm  which,  as  between  him  and  his  copartners,  and  with- 
out reference  to  the  debts  for  which  tlicy  are  all  jointly  liable,  is  legally  his  own  prop- 
erty." And  see  Ex  parte  Ruffin,  6  Ves.  119  ;  Ex  parte  Williams,  11  Ves.  3  ;  Allen  v. 
Center  Valley  Co.  21  Conn.  130;  Greenwood  v.  Brodhead,  8  Barb.  593;  Robb  v. 
Stevens,  1  Clarke's  Ch.  191:  Washliurn  v.  Bank  of  Bellows  Falls,  19  Vt.  278;  Clement 
V.  Foster,  3  Ii'cd.  Eq.  213;  Pearson  v.  Keedy,  6  B.  Mon.  128;  M'Donald  v.  Beach,  2 
Blaekf.  55;  Snodgrass's  Appeal,  13  Penn.  St.  471;  United  States  v.  Duncan,  12  III. 
523.  In  Rice  v.  Barnard,  20  Vt.  479,  it  was  held  tliat,  where  the  partncrsbip  was  of 
sucli  a  nature  tliat  the  copartners  had  no  lien,  the  joint  creditors  had  no  preference. 
But  see  Ferson  u.  Monroe,  1  Fost.  462. 

'  Pierce  v.  Jackson,  6  Mass.  242  ;  Dunham  v.  Murdock,  2  Wend.  553  ;  Phillips  v. 
Bridge,  1 1  Mass.  249 ;  Commercial  Bank  r.  Wilkins,  9  Greenl.  28 ;  In  the  matter  of 
Smith,  16  Johns.  102;  Douglas  v.  Winslow,  20  Maine,  89;  Tappan  v.  Blaisdell,  5 
N.  H.  190:  Brewster  v.  Hammet,  4  Conn.  540;    Bobbins  v.  Cooper,  6  Johns.  Ch.  186; 


en.  XI,]  PARTNERSHIP.  187 

one  partner  is  dormant  and  unknown,  the  creditor  of  the  other  ' 
attaching  the  stock,  is  not  postponed  to  the  creditor  who  dis- 
covers the  dormant  partner  and  sues  him  with  the  other;  unless, 
perhaps,  the  first  attaching  creditor's  claim  has  no  reference  to 
the  partnership  business,  and  that  of  the  second  attaching  credi- 
tor has  this  reference.^ 

Whether  the  converse  of  this  rule  is  true,  and  the  partnership 
creditors  are  restrained  from  appropriating  the  private  property 
of  the  copartners  until  the  claims  of  their, private  creditors  are 
satisfied,  is  not,  perhaps,  entirely  settled.  Such  is  certainly  the 
rule  in  equity,  according  to  the  weight  of  authority.-     And  al- 

Clark  r.  Alice,  3  Harrington,  80.  In  Vermont,  joint  creditors  have  no  preference  at 
law.    Kced  ?•.  Shepardson,  2  Vt.  120. 

'  Lord  V.  Baldwin,  6  Tick.  348  ;  Van  Valen  v.  Russell,  13  Barb.  590 ;  French  v. 
Chase,  6  Greenl.  166  ;  Cammack  v.  Johnson,  1  Green,  Ch.  163.  The  distinction  taken 
in  the  text  between  a  claim  having  reference  to  the  business  with  which  the  dormant 
partner  is  connected,  and  one  not  so  connected,  was  relied  on  in  Witter  v.  llichards,  10 
Conn.  37  ;  and  it  was  held  that  the  former  is  entitled  to  priority,  while  the  latter  is  not. 
But  this  distinction  was  not  recognized  in  the  late  case  of  Brown's  Appeal,  17  Penn. 
St.  480,  although  the  case  of  AVitter  v.  Richards  was  cited  and  commented  upon.  And 
we  think  there  is  much  rc.ison  to  doubt  the  soundness  of  the  distinction.  See  Allen  v. 
The  Center  Valley  Co.  21  Conn.  130. 

-  After  much  fluctuation,  the  rule  is  now  settled  in  England  that,  in  cases  of  l}ank- 
ruptcy,  the  separate  estate  shall  be  applied,  in  the  first  instance,  to  the  separate  debts, 
as  the  joint  estate  is  to  the  joint  debts.  Ex  parte  Elton,  3  Ves.  238  ;  Murray  v.  JMurray, 
5  Johns.  Ch.  60;  Coll.  on  Partnership,  (Perkins's  ed.)  §  920,  Story  on  Partnershijp, 
^  376;  1  Parsons  on  Cont.  ISO.  And  the  rule  appears  not  to  be  confined  to  cases  of 
bankruptcy,. but  to  be  a  general  principle  of  equity  in  tlic  administration  of  paEtnership 
and  separate  assets.  Ex  parte  Moult,  1  Dea.  &  Chitty,  44,  73.  In  this  case,  the  prin- 
ciple of  the  rule  in  bankruptcy  was  thus  explained  by  Bose,  J. :  "  It  has  not  been  denied 
that  it  is  an  universal  maxim  in  the  administration  of  assets  in  equit}',  that  the  separate 
estate  shall  be  applied,  in  the  first  instance,  to  the  separate  creditors,  the  joint  estate  to 
the  joint  creditors.  Mark  the  distinction,  equity  docs  not  alter  the  legal  contract;  it 
does  not  say  that  the  joint  creditor  shall  not  be  paid  out  of  the  assets  of  both  his 
debtors;  but  it  says  only  that  a  commission  stojis  tlie  diligence  or  action  of  all  the 
creditors,  so  that  they  arc  all,  as  it  were,  to  start  fair  with  the  commission,  as  if  all  their 
executions  had  come  to  the  sheriff  at  the  same  time.  All  the  joint  creditors  shall  go 
first  to  the  joint  estate,  and  the  separate  creditors  first  to  the  separate  estates  ;  and  if 
there  be  a  surplus  of  the  joint  estate,  it  is  carried,  according  to  the  interest  of  the  part- 
ners, to  the  respective  separate  estates  ;  or  if  a  surplus  of  the  separate  estates,  it  is 
carried  to  the  joint.  .  .  .  An  ordinary  partnership  debt  is,  in  law,  and  in  equity  likewise, 
both  joint  and  several ;  even  at  law  the  action  lies  against  one  of  the  two,  sulycct  only 
to  a  plea  in  abatement ;  by  execution  in  an  action  against  both,  you  may  get  both 
joint  and  several  property ;  for  ihe  law  contemplates  solvency,  proceeds  ujjon  solvency, 
or  ample  means  of  satisfaction,  either  in  person  or  property.  But  equity  in  bankruptcy 
proceeds  upon  insolvency  ;  it  does  not  vary,  but  only  suspends  the  contract,  and  that 
only  as  long  as  the  assets  arc  inadequate.  If  there  should  be  a  surplus  of  the  separate 
estate,  or  of  the  joint  estate,  the  creditor  has  the  same  resource  to  them  as  he  would 
have  had  under  his  common  law  execution."  In  this  country  also,  it  appears  to  be 
established,  as  a  general  principle  in  equity,  that  the  separate  estate  shall  go  first  to  the 
separate  creditors  as  well  as  the  joint  estate  to  the  joint  creditors.  Murrill  i\  Neill,  8 
How.  414;  Wilder  v.  Kcelcr,  3  Paige,  167;  Jackson  t:  Cornell,  1  Sandf.  Ch.  348; 
M'CuUoh  V.  Dashicll,  1  Harris  &  Gill,  296  ;  Woddrop  v.  Ward,  3  Dessau.  203  ;  Emanuel 
V.  Bird,  19  Ala.  .596  ;  Arnold  v.  Ilamer,  1  Frcm.  Ch.  (Miss.)  509  ;  Ladd  v.  Griswold, 
4  Gilman,  25.    But  this  rule  is  not  universally  admitted  in  this  country,  even  in  equity. 


188  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  XI. 

though  at  law  the  practice  has  not  been  so,  and  there  are  strong 
dicta  and  decisions  against  it,'  yet  some  recent  adjudications 
indicate  that  the  rule  may  become  established  at  law.^ 

It  is  now  quite  certain  that  the  levy  of  a  private  creditor  of 
one  copartner  upon  partnership  property  can  give  him  only  what 
that  copartner  has;  that  is,  not  a  separate  personal  possession  of 
any  part  or  share  of  the  stock  or  property,  but  an  undivided  right 
or  interest  in  the  whole,  subject  to  the  payment  of  debts  and  the 
settlement  of  accounts;  including  also  the  right  to  demand  an 
account.-^ 

In  Morris  v.  Morris,  4  Grattan,  293,  the  court  were  equally  divided  upon  the  question, 
and  very  elaborate  and  able  opinions  were  delivered  on  both  sides.  In  Bell  v.  Newman, 
5  Serg.  &  Rawlc,  78.  the  rule  was  repudiated  by  a  majority  of  the  court,  partly  because 
the  question  appeared  to  be  affected  by  statute,  and  partly  because  the  English  rule  was 
supposed  to  be  confined  to  cases  in  bankruptcj'.  And  see  Camp  v.  Grant,  21  Conn.  41. 
But  Gibson,  J.,  dissented,  and  delivered  a  very  able  opinion  in  favor  of  the  general  rule 
as  supported  both  by  authority  and  the  principles  of  equity.  The  Supreme  Court  of 
Vermont,  after  a  very  thorough  and  able  examination  of  the  subject  of  the  administra- 
tion of  partnership  and  separate' property  in  equity,  in  the  two  cases  of  Washburn  v. 
Bank  of  Bellows  Falls,  19  Vt.  278,  and  Bardweil  v.  Perry,  id.  292,  held,  in  the  latter, 
"  that,  as  the  partnership  creditors,  in  equity,  have  a  prior  lien  upon  the  partnership 
funds,  chancery  will  compel  them  to  exhaust  tliat  remedy  before  resorting  to  the  sep- 
arate estate  ;  but  that,  beyond  this,  both  sets  of  creditors  stand  precisely  equal  both  at 
law  and  in  equity."  And  see  In  the  matter  of  Sperry's  Estate,  1  Ashmead,  347; 
Tuckers  v.  Oxlev,  5  Cranch.  34. 

1  Allen  V.  Wc'lls,  22  Pick.  450 ;  Clegham  v.  Ins.  Bank*  of  Columbus,  9  Geo.  319; 
Kirby  v.  Schoonmaker,  3  Barb.  Ch.  48,  49,  per  Walioort/i,  Ch. ;  Newman  v.  Bagley, 
16  Pick.  570;  Ladd  r.  Griswold,  4  Gilman,  25,  36  ;  Bell.u.  Newman,  5  Serg.  &  li.  78, 
86  ;  Ex  parte  Moult,  as  cited  supra. 

2  The  only  decision  at  law  within  our  knowledge,  which  has  gone  the  full  length  of 
giving  the  separate  creditors  a  preference  as  to  the  separate  estate,  is  that  of  the  Su- 
perior Court  of  New  H'ampshire,  in  Jarvis  v.  Brooks,  3  Fost.  136.  Perley,  J.,  in  deliv- 
ering the  judgment  of  the  court,  after  stating  that  the  equitable  rule,  which  secures  to 
the  partnership  creditor  a  preference  in  the  application  of  the  partnership  estate,  had 
been  adopted  and  acted  upon  at  law  in  that  State,  said :  "  The  right  of  the  partnership 
creditors  to  a  preference,  in  the  application  of  the  partnership  funds,  having  been  ad- 
mitted in  this  State,  the  question  raised  in  this  case  is,  whether  the  corresponding  and 
correlative  rule,  giving  a  preference  to  the  individual  creditor  over  his  debtor's  separate 
estate,  is  also  to  be  consiclcred  as  liaving  been  adopted  as  a  branch  and  member  of  the 
same  equitable  doctrine.  If  the  preference  is  admitted  in  favof  of  the  joint  creditor, 
but  denied  to  the  separate  creditor,  the  principle  of  equality  and  reciprocity,  upon  which 
the  interference  of  equity  with  the  legal  rule  has  been  vindicated  in  England,  wholly 
fails.  At  law,  the  separate  creditor  might  take  his  debtor's  moiety  in  the  partnership 
estate,  and  sell  it  for  his  debt.  When  he  comes  to  assert  this  legal  right,  equity  inter- 
poses with  the  rule  that  partnership  debts  must  first  be  paid  out  of  the  partnership 
property;  and  in  answer  to  his  complaint  that  equity  has  taken  from  him  his  legal 
right,  he  may  be  told  in  England  that  equity,  by  way  of  compensation,  has  given  him 
a  corresponding  preference  in  the  application  of  his  debtor's  separate  estate.  Wc  have 
admitted  the  equitable  rule,  which  takes  away  the  creditor's  legal  right  to  satisfy  his 
debt  upon  an  undivided  moiety  of  the  partnersliip  property.  Principle,  consistency, 
and  equal  justice  to  the  separate  creditors  would  seem  to  require  that  we  should  also 
adopt  the  other  branch  of  the  same  equitable  doctrine,  and  there  is  no  greater  difficulty 
in  administering  one  branch  of  the  doctrine  than  the  other ;  both  may  be  directly 
asserted  at  law  with  equal  convenience." 

'^  In  the  matter  of  Smith,  16  Johns.  102;  Fox  v.  Hanbury,  Cowp.  445;  Mood)'  v. 
Payne,  2  Johns.  Ch.  548;  Doner  v.  Staufter,  1  Penn.  198;  Filley  v.  Phelps,  18  Conn. 


CH.  XI.]  PARTNERSHIP.  189 

As  to  how  such  levy  and  sale,  of  the  interest  of  one  copartner, 
shall  be  made  by  the  sheritt',  there  is  much  diversity  both  of 
practice  and  of  authority.  Upon  principle,  we  think  the  sheriff 
can  neither  seize,  nor  transfer  by  sale,  either  the  whole  stock  or 
any  specific  portion  of  it.  He  should,  we  think,  without  any 
actual  seizure,  sell  all  the  interest  of  the  defendant  partner  in  the 
stock  and  property  of  the  partnership.  The  purchaser  would 
then  have  a  right  to  demand  an  account  and  settlement,  and  a 
transfer  to  himself,  of  any  balance  or  property  to  which  the  co- 
partner whom   he  sued,  would  have   been   entitled.^     In  those 

294,  301;  White  v.  Woodward,  8  B.  Mon.  484;  Sutcliffe  u.  Dohrman,  18  Ohio,  181  ; 
United  States  v.  Hack,  8  Pet.  271,  276;  Garbett  i'.  Veale,  5  Q.  B.  408.  See  supra, 
p.  18G,  n.  1. 

1  Tlie  rule  at  law,  as  to  levying  an  execution,  as  laid  down  in  the  old  cases,  is  this : 
the  sheriff  must  seize  and  take  actual  possession  of  the  whole,  sell  an  undivided  moiety, 
and  make  the  vendee  and  other  partner  tenants  in  common.  The  amount  of  money 
made  by  the  sale  would  be  affected  by  the  fact  that  the  vendee  must  in  equity  take  his 
moiety  subject  to  the  partnership  accounts ;  but  that  fact  did  not  change  the  ])ractice  of 
the  sheriff.  If,  however,  the  views  entertained  by  courts  of  equity  upon  this  suliject,  are 
to  be  adopted,  a  different  practice  would  seem  to  be  required;  for,  since  equity  regards 
the  stock  as  a  fund  in  the  hands  of  the  partners,  in  their  partnership  capacity,  for  the 
settlement  of  the  accounts  of  the  firm,  and  regards  the  right  of  each  partner,  in  his  in- 
dividual capacity,  as  a  mere  right  to  a  moiety  of  the  suriilus,  if  any,  after  the  settle- 
ment of  accounts,  and  not  as  a  right  to  any  thing  tangible,  there  appears  to  be  no 
reason  for  allowing  any  actual  seizure  of  the  property  of  the  firm,  but  the  sheriff  should 
merely  transfer  a  right  to  an  account,  and  to  a  moiety  of  the  surplus,  if  any  remain, 
after  the  accounts  are  settled.  In  England,  it  would  seem,  from  the  late  case  of  Joiin- 
son  V.  Evans,  7  Man.  &  Gr.  240,  249,  that  the  rule  first  stated  is  still  adhered  to.  See 
Heydon  v.  Heydon,  1  Salk.  392;  Jacky  v.  Butler,  2  Ld.  Eaym.  871;  Bachurst  v. 
Clinkard,  1  Show.  173;  Marriott  v.  Shaw,  1  Comyns,  277;  King  v.  Manning,  2  id. 
616;  Parker  r.  Pistor,  3  Bos.  &  Pull.  288;  Chapman  v.  Koops,  3  id.  289.  In  this 
country,  where  the  priority  of  partnership  creditors  is  recognized  at  law  to  a  very  great 
extent,  it  becomes  a  question  whether  consistency  does  not  require  the  adoption  of  the 
equitable  rule  above  stated.  This  has  been  done  in  New  Hampshire.  See  Morrison 
V.  Blodgett,  8  N.  H.  238;  Gibson  v.  Stevens,  7  N.  H.  352  ;  Page  v.  Carpenter,  10  N.  H. 
77;  Dow  V.  Sayward,  12  N.  H.  277,  14  id.  9.  In  Newman  v.  Bean,  1  Foster,  93,  it  was 
held  that  a  sheriff,  who  should  take  possession  of  tlie  partnership  effects  under  an  exe- 
cution against  a  single  partner,  and  exclude  the  other  partners,  would  be  liable  to  au 
action.  The  equitable  rule  seems  also,  frotn  a  dictum  in  Sitler  v.  Walker,  1  Freem. 
Ch.  77,  to  have  been  adopted  in  Mississippi,  and  there  are  dicta  in  support  of  ft  in  the 
earlier  New  York  cases.  In  the  Matter  of  Smith,  16  Johns.  102.  But  the  other  rule, 
as  settled  in  England,  is  supported  by  the  great  current  of  American  authority.  In 
New  York,  the  subject  was  elaborately  considered  by  Cowen,  J.,  in  Phillips  v.  Cook,  24 
Wend.  389,  and  it  was  there  held  that  the  sheriff  must  seize  the  whole,  and  sell  an  un- 
divided moiety,  subject  in  equity  to  the  partnership  accounts  ;  and  that  lie  might  give 
possession  to  the  vendee,  who  would  hold  as  tenant  in  common.  And  see  further, 
Douglas  i\  Winslow,  20  Maine,  89;  Bradbury  v.  Smith,  21  Maine,  117;  Reed  i,-. 
Shepherdson,  2  Vt.  120;  Aldrich  r.  Wallace,  8  IDana,  287;  Church  v.  Knox,  2  Conn. 
514;  Burgess  (?.  Atkins,  5  Blackf.  337;  Shaver  i-.  White,  6  Munf.  110;  Moore  ?'.  Sample, 
3  Ala.  319  ;  White  v.  Woodward,  8  B.  Mon.  484  ;  Sutcliffe  v.  Dohrman,  18  Ohio,  181  ; 
Reed  v.  Howard,  2  Mete.  36.  It  was  held,  in  Waddelf  r.  Cook,  2  Hill,  47,  and  Welsh 
V.  Adams,  3  Denio,  125,  that,  if  the  sheriff  sell  the  whole  partnership  interest  in  an  exe- 
cution against  one  partner,  he  will  be  liable  in  trespass  or  trover  to  the  other  partner. 
When  on  an  execution  against  one  partner,  his  moiety  is  sold,  the  money  belongs  to 
his  separate  creditor  alone ;  for  the  rights  of  the  other  partners  and  joint  creditors  are 
attached  to  the  goods  themselves,  and  as  the  goods  are  sold  subject  to  those  rights,  they 


190  ELEMENTS   OF   MERCANTILE    LAAV.  [cil.  XI. 

jurisdictions  where  attachment  on  mesne  process  is  allowed,  the 
question  whether  the  sheriff  may  seize  and  retain  possession  of 
the  partnership  property,  upon  an  attachment  issued  by  a  creditor 
or  one  partner,  presents  still  greater  difficulties.  Probably,  how- 
ever, such  seizure  and  retention  would  be  allowed,  wherever  a 
seizure  on  execution  is  allowed.^  Where  such  seizure  is  not 
allowed,  it  may  be  impossible  for  the  creditor  to  secure  his  lien 
by  attachment,  without  the  aid  of  statutory  provisions  specially 
adapted  to  the  purpose.  Where  the  trustee  process,  or  process 
of  foreign  attachment,  is  in  use,  perhaps  the  better  way  would  be 
for  the  sheriff"  to  return  a  general  attachment  of  all  the  interest  of 
the  debtor  in  the  partnership  property,  and  summon  the  other 
partners  as  the  trustees  of  the  debtor.^ 


SECTION  IX. 

OF    THE    EFFECTS    OF    DISSOLUTION. 

If  the  dissolution  is  caused  by  death  of  any  partner,  the  whole 
property  goes  to  the  surviving  partners.  They  hold  it,  however, 
only  for  the  purpose  of  settlement ;  and,  therefore,  they  have,  in 
relation  to  it,  all  the  power  v^diich  is  necessary  for  that  purpose, 
and  no  more.^  If  they  carry  on  the  business  with  the  partner- 
ship funds,  they  do  so  at  their  own  risk,  and  the  representatives 

have  no  claim  upon  the  proceeds.  Doner  v.  Stauffer,  1  Pcnn.  198;  Fenton  v.  Folger, 
21  "Wend.  676.  Whether  a  court  of  equity  or  of  hiw  would,  upon  motion,  interfere  to 
stay  a  sale  on  execution  until  an  account  could  be  taken,  is  not  quite  settled.  In  Eng- 
land, a  court  of  law  will  not  do  it.  Chapman  v.  Koops,  3  Bos.  &  Pull.  289  ;  Parker  v. 
Pistor,  a  id.  288.  In  Moody  v.  Payne,  2  Johns.  Ch.  548,  and  in  Sitler  v.  Johnson,  1 
Frem.  Oh.  77,  it  was  held  that  a  court  of  equity  would  not,  under  ordinary  circum- 
stances, interfere  for  such  purpose.  See  Phillips  v.  Cook,  24-  Wend.  390,  401,  408,  and 
Brewster  v.  Ilammct,  4  Conn.  540.  But  the  doctrine  of  these  cases  is  decidedly  op- 
posed by  Mr.  Justice  Story,  (Story  on  Partnership,  p.  380,)  as  against  both  principle 
and  autliority;  and  his  views  are  sustained  in  Cammack  v.  Joimson,  1  Green.  Ch. 
(N.  J.)  163,  and  in  Place  v.  Swcetzer,  IG  Ohio,  142.  See  1  Amcricau  Ld.  Cases,  469, 
where  the  whole  subject  is  ably  discussed. 

1  Sec  Douglas  v.  Winslow,  20  Maine,  89. 

'^  Sec  per  Parker,  C.  J.,  in  Morrison  v.  Blodgett,  8  N.  II.  254 ;  per  Upham,  J.,  in 
Dow  V.  Say  ward,  12  N.  H.  276. 

^  Barney  r.  Smith,  4  Harr.  &  Johns.  485;  Murray  v.  Mumford,  6  Cow.  441.  The 
same  rule  would  seem  to  ap]dy  in  case  of  the  bankruptcy  of  one  partner.  The  Matter 
of  Norcross,  5  Law  Reporter,  124;  Tallcott  z'.  Dudley,  4*  Scammon,  427,435;  Gcortner 
V.  The  Trustees  of  Canajoharie,  2  Barb.  625,  629.  But  see  Murray  v.  Murray,  5  Johns. 
Ch.  60,  70.  The  surviving  partner  is  not  entitled  to  compensation  for  settling  the 
affairs  of  the  firm.  Stocken  v.  Dawson,  6  Beav.  371 ;  Washburn  v.  Goodman,  17  Pick. 
519;  Colgin  u.  Cummins,  1  J'orter,  148;  Patton  v.  Calhoun,  4  Grattan,  138. 


en.  XI.]  PARTNERSHIP.  191 

of  the  deceased  may  choose  between  calling  on  them  for  their 
share  of  the  capital  with  interest,  or  with  a  share  of  the 
profits.^ 

The  survivors  are  tenants  in  common  wiih  the  representatives 
of  the  deceased,  of  the  stock  or  property  in  possession  ;2  and 
have  all  necessary  rights  against  them,  to  settle  the  affairs  of  the 
concern  and  pay  its  debts.-^  After  a  dissolution,  however  caused, 
one  who  had  been  a  })artncr  has  no  authority  to  make  or  indorse 
notes  or  bills  with  the  name  of  the  firm,  even  if  he  be  expressly 
authorized  to  settle  the  affairs  of  the  firm.'*  There  must  be  a 
distinct  authority  to  sign  for  the  others  who  were  partners.      A. 

1  Brown  v.  Litton,  1  P.  Wms.  140;  Hammond  v.  Douglas,  5  Vcs.  539  ;  Fcatlierston- 
haugh  V.  Tcnwick,  17  Ves,  298 ;  Ileathcote  v.  Huline,  1  Jac.  &  Walk.  122;  Jones  v. 
Nov,  2  Mylne  &  Keen,  125  ;  Crawshay  v.  Collins,  2  Kuss.  345,  15  Ves.  218;  Goodburn 
V.  Stevens,  5  Gill,  1  ;  Washburn  v.  Goodman,  IT  Pick.  519.  In  AVillclt  v.  Blanford,  1 
Hare,  253,  272,  it  was  held  that  the  proportion  of  thc-profits,  to  which  the  representa- 
tives of  the  deceased  partner  would  be  entitled,  was  not  necessarily  equal  to  the  de- 
ceased partner's  siiare  of  the  capital,  but  v/ould  dejjend  upon  the  nature  of  the  trade, 
manner  of  carrying  it  on,  the  capital  employed,  the  state  of  the  accounts  lietwecn  the 
partnership  and  the  deceased  partner  at  the  time  of  his  death,  and  the  conduct  of  the 
parties  after  his  death.  A  partner  appointed  receiver,  is  not  held  to  account  as  partner 
for  tiie  profits  of  money  invested  in  trade.     AVhitesides  i\  Lafferty,  3  Himiph.  150. 

-  In  the  late  case  of  Buckley  v.  Barber,  6  Exch.  164,  1  Eng.  Law  &  Eq.  506,  it  was 
urged,  liy  counsel :  "  That,  at  law,  the  property  in  personal  chattels,  wliereof  merchants 
are  jointly  possessed  for  the  purpose  of  trade,  survives;  and  that  the  meaning  of  the 
maxim,  Jus  accrescendi  inter  mercutores  locum  noii  hah't,  was  that,  though  the  legal  prop- 
erty survives,  the  right  to  the  benefit  of  it,  and  to  bring  an  action  of  account  against 
the  surviving  partner,  belonged  to  the  executors  of  the  deceased  partner."  But  the 
court,  in  a  learned  and  able  decision,  by  Parke,  B.,  sustained  the  doctrine  laid  down  in 
the  text.  But  the  legal  property  in  clioaes  in  action  belongs  to  the  survivor,  and  actions 
upon  them  must  be  brought  in  his  name.  ISIartin  r.  Crompe,  1  Ld.  Iiaym.  340.  See 
Smith  v.  Barrow,  2  T.  K.  476.  Hence,  the  debts  and  credits  which  the  surviving  part- 
ner has  in  his  own  right  and  on  account  of  the  partnership,  may  at  law  be  set  off,  one 
against  the  other.  Slipper  v.  Stidstonc,  5  T.  R.  493  ;  French  t-.  Andrade,  6  T.  R.  582  ; 
Meader  v.  Scott.  4  Vt.  26;  Lewis  v.  Culbertson,  11  Serg.  et  R.  48;  Cowden  v.  Elliot, 
2  Missouri,  51  ;  Beach  v.  Hayward,  10  Ohio,  455.  But  when  the  chases  in  action  are 
reduced  to  possession,  the  surviving  partner  holds  the  pioperty  as  tenant,  in  common 
with  tlie  representative  of  the  deceased  partner.  It  was  hehl,  in  Hammond  v.  Douglas, 
5  Ves.  539,  that  the. good-will  of  a  trade  survives.  Lord  Eldon  exjjrcsscd  a  doubt  on 
the  subject,  in  Crawshay  v.  Collins,  15  Ves.  227;  hut  that  was  overruled  in  Lewis  v. 
Langdon,  7  Sim.  421.  In  Farr  v.  Pcarce,  3  Macld.  75,  Sir  J.  Leach  seemed  to  suppose 
that  the  good-will  of  a  professional  partnership  would  survive,  but  not  the  good-will  of 
a  trading  partnership.  '  In  Dougherty  i\  Van  Nostraiul,  1  Hoft".  Ch.  68,  the  case  of 
Hammond  r.  Douglas  was  declared  not  to  be  law.  audit  was  held  that  the  good-will 
did  not  survive.  For  the  nature  of  the  good-will  of  a  trade,  see  Chissum  r.  Dewes,  5 
Buss.  29  ;   Bell  v.  Locke,  8  Paige,  75  ;  Williams  v.  AVilson,  4  Sandf  Ch.  379. 

<*  Geortner  r.  The  Trustees  of  Canajoharie,  2  Barb.  625  ;  Ex  parte  Puffin,  6  Vcs. 
119;  Ex  parte  Williams,  11  Ves.  3. 

*  Abel  V.  Sutton,  3  Esp.  108;  Kilgour  v.  Finlyson,  1  H.  Bl.  155;  Ramsbottom  v. 
Lewis,  1  Camp.  279;  Parker  r.  Macomber,  18  Pick.  505;  Lusk  r.  Smith,  8  Barb.  570; 
Humphries  v.  Chastain,  5  Geo.  166:  Long  v.  Story,  10  ]\Iis.  636;  Parker  i-.  Cousins,  2 
Gratt.  372;  Hamilton  v.  Seaman.  1  Smith,  (Indiana.)  129,  1  Carter,  185.  But  see 
Robinson  v.  Tavlor,  4  Pcnn.  St.  242';  Davis  &  Desauque,  5  Whart.  530;  Lewis  v. 
Reilly,  1  Q.  B.  349. 


192  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XI. 

parol  authority  will  be  sufficient,  even  if  the  general  terms  of  the 
partnership  had  been  reduced  to  writing.^ 

Whether  a  court  of  equity  will  give  to  partnership  creditors  a 
remedy  against  the  representatives  of  a  deceased  partner,  when 
there  is  no  insolvency,  may  be  doubted.  Formerly,  the  creditor 
could  go  only  against  the  surviving  partners,  and  they  must  look 
to  the  representatives  of  the  deceased;  but  if  the  firm  were  insol- 
vent, then  the  creditors  might  go  at  once  against  the  representa- 
tives of  the  deceased,  because  each  partner,  and  all  his  property, 
is  bound  for  the  whole  debt  of  the  firm.^  In  England  it  is  now 
settled,  by  recent  decisions,  that  equity  will  permit  this  resort  to 
the  representatives  of  the  deceased,  even  where  there  is  no  insol- 
vency, letting  them  look  for  an  adjustment  of  what  they  pay  to 
the  surviving  partners.  And  though  we  cannot  say  that  this  is 
settled  American  law,  it  seems  to  us  more  consonant  with  the 
principles  of  the  law  of  partnership  as  now  administered.^ 

1  Smith  V.  Winter,  4  M.  &  Wcls.  454.  For  a  partner's  authority  generally  after  dis- 
solution, see  Gannett  v.  Cunningluim,  .34  Maine,  ."je ;  Fowle  v.  Harrington,  1  Cush. 
146;   Story  on  Partnership,  §   325-329,  344,  346;  3  Kent's  Com.  63. 

-  Lane  v.  Williams,  2  Vcrn.  292;  Jacomb  v.  Harwood,  2  Ves.  Sen.  265  ;  Hankey  v. 
Garralt,  1  Ves.  Jun.  236  ;  Gray  v.  Chiswell,  9  Ves.  118;  Lawrence  v.  The  Trustees 
of  the  Leake  and  Watts  Orphan  House,  2  Denio,  577,  586  ;  Jackson  v.  King,  8  Leigh, 
689;  Caldwell  v.  Stileman,  1  Raw'Ie,  212  ;  Wilder  v.  Keeler,  3  Paige,  167. 

^  There  appear  to  have  been  no  express  decisions  in  England,  upon  the  question 
whether  the  creditors  of  a  firm  could  resort  to  the  estate  of  the  deceased  partner,  with- 
out showing  the  insolvency  of  the  survivor,  before  the  case  of  Devaynes  v.  Noble,  1 
Mer.  529,  2  Russ.  &  My.  495.  But  the  courts  appeared  to  assume  that  they  could  not. 
Gray  v.  Cliiswell,  9  Ves.  18.  In  the  case  of  Devaynes  v.  Noble,  it  was  decided  that  a 
partnership  creditor  could  so  resort  on  the  ground  that  partnership  debts  are  in  equity 
both  joint  and  several.  And  such  has  ever  since  been  the  settled  law  in  England. 
See  Wilkinson  v.  Henderson,  1  Mylne  &  Keen,  582 ;  Thorpe  v.  Jackson,  2  You.  & 
Coll.  553;  Braithwaite  v.  Britain,!  Keen,  206;  Hills  v.  M'Rae,  5  Eng.  Law  and  Eq. 
233.  In  this  country  there  are  several  early  decisions,  holding  that  a  partnership  cred- 
itor cannot  resort  to  the  estate  of  the  deceased  partner  until  the  whole  estate  of  the 
survivor  is  exhausted.  Van  Reimsdyk  v.  Kane,  1  Gallison,  371 ;  Hubble  v.  Pcrrin,  3 
Hammond,  (Obio,)  287;  Marr  v.  Southwick,  2  Porter,  351 ;  Alsop  v.  Mather,  8  Conn. 
524.  But  Mr.  Justice  Slorji  and  Mr.  Chancellor  Kent  appear  to  have  considered  the 
old  doctrine  overturned,  and  the  new  one,  as  laid  down  in  Devaynes  v.  Noble,  estab- 
lished. Story  on  Partnership,  §  362;  1  Story's  Eq.  Jur.  §  675 ;' 3  Kent's  Com.  63. 
And  this  doctrine  has  been  followed  in  the  Supreme  Court  of  the  United  States,  in 
Nelson  v-  Hill,  5  How.  12f ,  where  Daniel,  J.,  in  delivering  the  opinion  of  the  court, 
said :  "  It  is  now  a  rule  of  law,  too  well  settled  to  be  shaken,  that  the  creditor  of  a 
partnership  may,  at  his  option,  proceed  at  law  against  the  surviving  partner,  or  go  in 
the  first  instance  into  equity  against  the  representatives  of  the  deceased  partner."  This 
doctrine  has  also  been  followed  in  the  late  case  of  Camp  v.  Grant,  21  Conn.  41,  which 
overruled  several  preceding  cases  in  that  State,  and  in  Fillyau  v.  Laverty,  3  Florida, 
72.  In  Travis  v.  Tartt,  8  Ala.  574,  the  case  of  Marr  r.  Southwick,  supra,  was  disap- 
proved, and  the  late  doctrine  was  recognized  as  well  settled.  But  in  the  case  of  Law- 
rence i\  The  Trustees  of  the  Leake  Orjihan  House,  2  Denio,  577,  Walworth,  Ch.,  dis- 
sented from  the  late  English  doctrine,  and  adhered  to  the  old  one,  and  his  decision  was 
unanimously  confirmed  by  the  Court  of  Errors.  See  Slatter  v.  Carroll,  2  Sandf.  Ch. 
573,  580.    In  some  of  the  States,  the  same  remedy  is  given  by  statute  against  the 


en.  XT.]  PARTNERSHIP.  193 

It  is  common,  where  a  partnership  is  dissolved  by  mutual  con- 
sent, to  provide  that  some  one  of  the  partners  shall  settle  up  the 
aft'airs  of  the  concern  ;  collect  and  pay  debts,  and  the  like.  But 
this  will  not  prevent  any  person  from  paying  to  any  partner  a 
debt  due  to  the  firm  ;  and  if  such  payment  be  made  in  good  faith, 
the  release  or  discharge  of  the  partner  is  eflectual.^  So  it  is 
frequently  provided  that  one  partner  shall  take  all  the  property 
and  pay  all  the  debts;  but  this  agreement,  though  valid  between 
the  partners,  has  no  effect  upon  third  parties;  for  they  have  a 
valid  claim  against  all  the  partners,  of  which  they  cannot  be 
divested  without  their  consent.^  This  consent  may  be  inferred  ; 
but  not  from  slight  evidence;  thus,  not  from  receiving  the  single 
partner's  note  as  a  collateral  security,  nor  from  receiving  interest 
from  him  on  the  joint  debt,  nor  from  a  mere  change  in  the  head 
of  the  account,  charging  the  single  partner  and  not  the  firm. 
Still,  as  the  creditor  certainly  can  assent  to  this  arrangement,  and 
accept  the  indebtedness  of  one  partner  instead  of  that  of  the  firm,^ 

estate  of  a  deceased  joint  debtor,  as  if  tlie  contract  had  been  botli  joint  and  several. 
Sparhawk  (.'.Russell,  10  Mete.  305,  307 ;  Dahlgrcen  r.  Duncan,  7  Smedes  &  Marsh. 
280;  Maxey  u.  Avcrill,  2  B.  INIon.  107.  This  right  of  joint  creditors  to  proceed  in 
equity  imniediately  against  the  separate  estate,  is  subject  to  the  prior  right  of  separate 
creditors  to  tliat  estate,  where  their  prior  right  is  acknowledged.     See  svpni,  note. 

1  Porter  v.  Taylor,  G  IVIaule  &  Sel.  15G;  King  v.  Smith,  4  Car.  &  Payne,  108; 
Major  V.  Hawkes,  12  111.  298.  The  rule  appears  to  l)e  this  :  if  the  partners  have  merely 
given  one  of  their  numljer,  or  a  third  person,  an  authority  to  receive  all  the  debts  due 
the  firm,  still,  payment  to  any  partner  will  be  good,  for  the  authority  is  revocable.  'Tt 
would  be  otherwise  if  it  appeared  that  the  legal  or  equitable  interest  in  tlie  partnership 
effects  had  been  transferred  to  an  assignee;  in  that  event,  a  debtor  who  should  pay  a 
debt  to  either  of  the  partners,  after  notice,  would  be  liable  to  pay  again  to  the  assignee." 
Per  Trumbull,  J.,  in  Gordon  v.  Preeman,  11  111.  14;  Combs  v.  Boswell.  1  Uana,  473. 
The  representatives  of  a  deceased  partner  cannot  receive  payment.  Wallace  v.  Pitz- 
simnions,  1  Dall.  248.  See  Pritchard  v.  Draper,  1  Russ.  &  Myhie,  191;  Brasier  v. 
Hudson,  9  Sim.  1. 

-  Heath  v.  Percival,  1  P.  Wms.  682  ;  Smith  v.  Jameson,  5  T.  R.  601  ;  David  v. 
Ellicc,  5  B.  &  C.  196  ;  Harris  v.  Parwell,  15  Eng.  Law  and  Eq.  70,  15  Beav.31 ;  Harris 
V.  Lindsay,  4  Wash.  C.  C.  271. 

^  A  question  has  arisen  whether  an  agreement  to  accept  the  indebtedness  of  a  single 
partner  in  discharge  of  a  debt  of  the  firm,  is  void  for  want  of  consideration.  It  is  clear 
that  an  agreement  to  discharge  a  partnership  debt,  in  consideration  of  receiving  a 
higher  kind  of  security,  from  a  single  partner  would  be  valid.  So  also  would  an  agree- 
ment to  discharge  a  partner  from  his  liability  on  a  partnership  debt,  in  consideration 
of  his  giving  up  the  partnership  funds  to  a  copartner  who  takes  upon  himself  tlie  debt. 
Attwood  V.  Banks,  2  Beav.  192  ;  Lodge  v.  Dicas,  3  Barn.  &  Aid.  611  ;  Livingston  v. 
Radclilf,  G  Barb.  201.  But  whether  receiving  the  sole  security  of  one  jiartner  is  itself 
a  sufficient  consideration  for  reliniiuishing  the  joint  security  of  tlie  same  class,  has 
given  rise  to  much  discussion.  In  Lodge  i'.  Dicas,  3  Barn.  &  Aid.  611  ;  David  v. 
Ellicc,  5  Barn.  &  Cress.  19G;  Waydell  l:  Lncr,  5  Hill,  448 ;  and  Cole  v.  Sackett,  1 
Hill,  .516,  the  courts  were  inclined  to  hold  that  it  was  not  a  sutiicient  consideration. 
See  Wildes  v.  Pessenden,  4  Jletc.  12;  Prcntrcss  r.  jNIarkle,  2  Greene,  (Iowa.)  553.  But 
the  English  cases  hoMing  that  doctrine,  were  questioned  in  Thompson  ;;.  Percival,  5 
Barn.  &  Ad.  925;  Kirwan  r.  Kirwan,  2  Crompt.  &  ilecs.  617,  4  Tyrw.  491  ;  and  in 
Hart  V.  Alexander,  2  INIees.  &  Wels.  484 ;   and  the  New  York  cases  were  expressly 

17 


194  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

SO  it  must  be  equally  clear  that  such  assent  and  intention  will 
bind  him  if  distinctly  proved  by  circumstances.^ 


SECTION  X. 

OF   LIMITED   PAUTNERSniPS. 

These  are  unknown  in  England;  but  have  been  introduced  into 
some  of  our  States,  by  statutes,  which  differ  somewhat  in  their 
provisions.  Generally,  they  require,  firstly,  one  or  more  general 
partners  whose  names  shall  be  known  ;  secondly,  special  partners 
who  do  not  appear  as  members,  nor  possess  the  powers  or  dis- 
charge the  duties  of  actual  partners;  thirdly,  the  sum  to  be  con- 
tributed by  the  special  partners  shall  be  actually  paid  in ;  lastly, 
all  these  arrangements,  with  such  other  information  as  may  be 
needed  for  the  security  of  the   public,  must  be  verified   under 

overniled  in  tlie  Court  of  Errors,  in  Waydell  v.  Luer,  3  Dcnio,  410.  See  Livinc;ston 
V.  Radcliff,  6  Barb.  202;  Van  Eps  v.  Diflayc,  id.  245,  252.  Although  none  of  these 
later  cases  expressly  decided  that  taking  the  naked  liability  of  a  single  partner  was  a 
sufficient  consideration  for  the  discharge  of  a  claim  against  the  firm,  yet  the  principles 
laid  down  obviously  lead  to  that  doctrine.  Lord  Denmnn,  in  Thompson  v.  Percival, 
supra,  said  :  "Many  cases  may  be  conceived  in  which  the  sole  liability  of  one  of  two 
debtors  may  be  better  than  the  joint  liability  of  the  two,  either  in  respect  of  the  solvency 
of  the  parties,  or  the  convenience  of  the  remedy,  as  in  cases  of  bankruptcy  or  survivor- 
ship, or  in  various  other  ways ;  and  whether  it  was  actually  m.ore  beneficial"  in  each 
particular  case,  cannot  be  made  the  subject  of  inquiry."  See  dicta  of  Parke,  B.,  to  the 
same  purpose,  in  Kirwan  v.  Kirwan,  4  Tyrw.  496.  In  the  case  of  Waydell  i'.  Luer,  3 
Denio,  418,  Lott,  Senator,  said :  "  It  is  evident  that  it  may  frequently  occur  that  a  claim 
against  a  firm  may  in  fact  be  worth  less  than  if  held  against  one  of  its  members,  not 
merely  on  account  of  the  means  of  enforcing  payment,  but  as  to  the  availability  of  the 
fund  out  of  which  it  is  to  be  made  ;  and  although  the  learned  judge,  in  delivering  his 
opinion  below,  says  he  '  is  unable  to  see  how  the  name  of  one  is  better  alone  than  when 
joined  with  another's  in  point  of  solvency,'  yet  it  is  clear,  from  the  principles  above  re- 
ferred to,  that  it  may  be  more  available  as  security.  When,  therefore,  a  creditor  agrees 
to  release  a  joint  indebtedness,  by  acceptance  of  a  note  or  any  other  obligation  of  one 
of  his  debtors  in  payment,  he  receives  a  consideration  which  may  be  more  valuable  to 
himself  than  the  original  claim.  Whether  it  is  in  fact  so,  is  wholly  immaterial."  See 
Harris  v.  Lindsay,  4  Wash.  C.  C.  271;  Sheehy  v.  Mandeville,  6  Cranch,  253;  Ex  parte 
Liddiard,  4  Uca.  &  Ch.  603 ;  Oakeley  v.  Pasheller,  10  Bligh,  548,  4  Clark  &  Fin.  207. 
1  It  appears  to  have  been  once  held  in  England  that  taking  a  promissory  note  or  bill 
of  exchange  from  a  single  partner,  was  sufficient  to  discharge  the  firm.  Evans  v. 
Drummond,  4  Esp.  92;  lleed  v.  White,  5  Esp.  122.  And  this  would  seem  to  be  the 
doctrine  now  in  Maine  and  Massachusetts,  where  the  giving  of  a  promissory  note  is 
reoardcd  as  prima  facie  evidence  of  payment.  Springer  ?».  Shirley,  2  Fairf.  204.  But 
elsewhere,  it  is  now  clearly  settled  that  the  taking  of  a  promissory  note  of  a  single 
partner  for  a  partnership  debt  is  not  in  itself  sufficient  evidence  of  a  discharge  of  the 
firm.  But  there  must  be  an  agreement  to  discharge  the  firm,  either  express,  or  such 
as  a  jury  may  reasonably  infer  from  the  circumstances.  Kirwan  v.  Kirwan,  4  Tyrw. 
491 ;  Harris  v.  Farwcll,  15  Eng.  Law  and  Eq.  70,  15  Beav.  31  ;  Davis  &  Desauque,  5 
Whart.  531  ;  Parker  v.  Cousins,  2  Grattan,  373,  388  ;  Mason  v.  Wickersham,  4  Watts 
&  Serg.  100;  Kinsler  v.  Pope,  5  Strobh.  126;  Yarnell  v.  Anderson,  14  Missouri,  619. 
See  Barker  v.  Blake,  11  Mass.  16. 


en.  XI.]  PARTNERSraP.  195 

oath,  signature,  and  acknowledgment  before  a  magistrate,  and 
correctly  published.  When  these  requisites  are  complied  with, 
the  special  partners  may  lose  all  they  have  put  in,  but  cannot  be 
held  to  any  further  responsibility.  But  any  neglect  of  them,  or 
any  material  mistake  in  regard  to  them,  even  on  the  part  of  the 
printer  of  the  advertisement,  wholly  destroys  their  effect;  and 
then  the  special  partner  is  liable,  in  solido,  for  the  whole  debt, 
precisely  like  a  general  partner.^ 

1  In  Bradbury  v.  Smith,  21  Maine,  117,  the  stock,  in  trade  was  purchased  with  the 
capital  advanced  by  A,  under  a  contract  making  him  a  special  partner ;  it  was  lield 
that  the  stock  could  be  attached  for  the  private  debt  of  the  general  partner,  whether 
the  parties  liad  so  conformed  to  the  statute  as  to  form  a  special  partnership  or  not.  In 
Merrill  v.  Wilson,  29  Maine,  58,  a  sole  general  partner  assigned  his  property  for  the 
benefit  of  creditors.  It  was  held  that  the  property  of  the  special  partnership  did  not 
pass.  In  Bowcn  v.  Argall,  24  Wend.  496,  it  was  held  that  a  mistake  in  the  pul)lication 
of  the  names  of  the  partners,  as  Argale  for  Argall,  would  not  vitiate  the  publication, 
because  the  mistake  was  not  calculated  to  mislead.  In  Madison  Co.  Bank  v.  Gould,  5 
Hill,  309,  the  day  of  the  commencement  of  the  partnership  was  stated  in  the  public 
notice  to  be  November  16,  while  in  the  original  certificate  it  was  October  16.  Held, 
that  the  special  partners  were  not  liable  as  general  partners,  as  the  error  was  uninten- 
tional, and  the  plaintiff  could  not  have  been  affected  by  it.  It  was  held  also,  that  if 
a  special  partner  purchase  real  estate  on  account  of  the  firm,  or  if  the  title  be  taken  in 
his  name  and  with  his  consent,  he  will  be  liable  as  a  general  partner;  but  not  if  his 
name  be  used  without  his  consent.  In  Smith  v.  Argall,  6  Hill,  479,  S.  C.  in  Error,  3 
Denio,  435,  the  amount  contributed  by  the  special  partner  was,  by  mistake  of  the 
printer,  stated  at  $5,000,  instead  of  $2,000,  and  it  was  field  that  the  associates  were 
liable  as  general  partners,  although  the  plaintiff  did  not  show  that  he  was  actually  mis- 
led by  the  error.  In  Mills  v.  Argall,  6  Paige,  577,  it  was  held  that  an  assignment  of 
the  partnership  property,  providing  for  the  payment  of  a  debt  due  the  special  partner, 
ratably  with  the  other  creditors  of  the  firm,  or  before  all  the  other  creditors  are  satisfied 
in  full  for  their  debts,  is  void  as  against  the  creditors  :  but  it  would  be  valid  as  against 
the  assignor  and  those  creditors  who  tiiink  proper  to  atiirm  it.  See  Beers  v.  Reynolds, 
12  Barb.  288 ;  Beers  v.  Reynolds,  1  Kern.  97. 


196  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XII. 


CHAPTER   XII. 
OF  THE  CARRIAGE  OF  GOODS. 

SECTION  I. 

OF    A   PRIVATE    CARRIER. 

One  who  carries  goods  for  another  is  either  a  private  carrier  or 
a  common  carrier. 

A  private  carrier  is  one  who  carries  for  another  casually,  but 
who  does  not  pursue  the  business  of  carrying  as  his  usual  and 
professed  occupation.^  The  contract  between  him  and  the  owner 
of  the  goods  which  he  carries,  is  one  of  service,  and  is  governed 
by  the  ordinary  rules  of  law.  Each  party  is  bound  to  perform 
his  share  of  the  contract.  The  carrier  nmst  receive,  care  for, 
carry,  and  deliver  the  goods,  in  such  wise  as  he  bargains  to  do, 
whether  this  bargain  be  in  words,  or  implied  by  the  law  from  the 
nature  of  the  service  which  he  undertakes  to  render. 

If  he  carries  the  goods  for  hire,  whether  actually  paid  or  due, 
he  is  bound  to  use  ordinary  diligence  and  care;^  by  which  the 
law  means  such  care  as  a  man  of  ordinary  capacity  would  take 
of  his  own  property  under  similar  circumstances.^     If  any  loss  or 

1  See  Gordon  v.  Hutchinson,  1  W.  &  S.  285.  The  distinctions  between  tlie  liability 
of  the  priv.ite  carrier  and  the  common  carrier  will  be  stated  hereafter ;  but  it  may  be 
said  here  that,  generally,  any  one  who  carries  goods  for  another  is  a  private  carrier, 
unless  he  comes  within  the  definition  of  a  common  carrier.  See  Ross  v.  Hill,  2  C.  B. 
877. 

2  See  Coggs  v.  Bernard,  2  Ld.  Raym.  909;  Ross  v.  Hill,  2  C.  B,  877;  Penobscot 
Boom  Corp.  v.  Baker,  16  Maine,  233. 

"^  See  Jones  on  Bailments,  5,  where  the  author,  speaking  of  this  subject,  says:  "There 
are  infinite  shades  of  care  or  diligence  from  the  slightest  momentary  thought  or  tran- 
sient glance  of  attention  to  the  most  vigilant  anxiety  and  solicitude;  but  extremes,  in 
this  case  as  in  most  others,  arc  inapplicable  to  practice ;  tlie  first  extreme  would  seldom 
enable  the  bailee  to  perform  tlie  condition,  and  the  second  ought  not,  in  justice,  to  be 
demanded;  since  it  would  be  harsh  and  absurd  to  exact  tlie  same  anxious  care  which 
the  greatest  miser  takes  of  his  treasure,  from  every  man  who  borrows  a  book  or  seal. 
The  degrees,  then,  of  care  for  which  we  are  seeking,  must  lie  somewhere  between  these 
extremes;  and  by  observing  the  different  manners  and  characters  of  men,  we  may  find 
a  certain  standard  which  will  greatly  facilitate  our  inquiry  ;  for,  althougli  some  are  ex- 
cessively careless,  and  others  excessively  vigilant,  and  some  tlirougii  life,  others  only 
at  particular  times,  yet  we  may  perceive  that  the  generality  of  rational  men  use  nearly 


en.  XII.]  OF  THE   CARRIAGE   OF   GOODS.  197 

injury  occur  to  the  goods  while  in  his  charge,  from  the  want  of 
such  care  or  diligence  on  his  part,  he  is  responsible.^  But  if  the 
loss  be  chargeable  as  much  to  the  fault  of  the  owner  as  of  the 
carrier,  he  is  not  liable.-  The  owner  must  show  the  want  of  care 
or  diligence  on  the  part  of  the  private  carrier, to  make  him  liable; 
but  slight  evidence  tending  that  way,  would  suffice  to  throw  upon 
him  the  burden  of  accounting  satisfactorily  for  the  loss.^ 

If  he  carries  the  goods  without  any  compensation,  paid  or 
promised,  he  is,  in  the  language  of  the  law,  a  gratuitous  bailee, 
or  mandatory ;  he  is  now  bound  only  to  slight  care;*  which  is 
such  care  as  every  person,  not  insane  or  fatuous,  would  take  of 

the  same  degree  of  diligence  in  the  conduct  of  their  own  affairs  ;  and  this  care,  there- 
fore, which  every  person  of  common  prudence  and  capable  of  governing  a  family  takes 
of  his  own  concerns,  is  a  proper  measure  of  that  wliich  would  uniformally  be  required 
in  performing  every  contract,  if  there  were  not  strong  I'casons  for  exacting  in  some  of 
them  a  greater,  and  permitting  in  others  a  less  degree  of  attention."  And  sec  Vaughan 
V.  Menlove,  3  Bing.  N.  C.  468;  Gordon  v.  Hutchinson,  1  W.  &  S.  285;  Tompkins  v. 
Saltmarslf  U  S.  &  R.  280. 

1  Beck  V.  Evans,  16  East,  244.  In  this  case,  the  plaintiff  had  sent  a  cask  of  brandy 
by  the  defendant's  wagon,  from  Shrewsbury  to  London.  Before  the  wagon  reached 
Birmingham,  it  was  perceived,  by  persons  in  the  wagon,  that  the  cask  was  leaking  fast, 
and  the  driver  was  informed  of  it;  but,  though  he  stayed  tliree  hours  in  Birmingham, 
after  his  arrival  there,  he  made  no  examination  of  the  cask,  nor  took  any  step  to  pre- 
vent the  leakage.  lie  passed  in  like  manner  through  Wolverhampton,  where  the 
wagon  also  made  some  stay,  without  regard  to  tiie  cask  ;  but  at  the  next  stage  beyond 
Wolverhampton,  having  some  parcels  to  deliver,  he  took  the  cask  out,  and  tlie  re- 
mainder of  the  brandy  was  saved.  It  was  left  to  the  jury  to  consider  whether  the  in- 
jury arose  from  the  negligence  of  the  defendant's  servant,  the  wagoner,  in  not  examin- 
ing the  cask  after  he  was  informed  of  its  leaky  state,  at  either  of  the  places  where  he 
halted  ;  and  the  jury  having  found  in  the  affirmative,  an  application  for  a  rule  to  set 
aside  the  verdict  on  account  of  tlie  misdirection  of  the  judge,  was  refused  bv  the  King's 
Bench.  And  see  Goff  v.  Clinkard,  cited  1  Wils.  282 ;  Mackenzie  i'.  Cox,  9  C.  &  P. 
632  ;  Koss  v.  Hill,  cited  supra,  p.  196,  n.  1;  Rogers  v.  Head,  Cro.  Jac.  262  ;  Sheldon  i-. 
Robinson,  7  N.  H.  157;  Satterlee  v.  Groat,  1  Wend.  272  ;  Freeman  v.  Birch,  1  Nev.  & 
M.  430. 

^  Whalley  v.  Wray,  3  Esp.  74.  This  was  an  action  of  assumpsit  against  the  defendant 
as  a  lighterman,  for  damage  done  to  plaintiff's  goods,  which  had  been  intrusted  to  him 
to  be  deposited  in  the  plaintiff's  warehouse.  Before  the  coods  could  be  permitted  to 
be  landed,  it  was  necessary  to  present  a  petition  to  the  commissioners  of  the  customs, 
who  refer  it  to  the  land  surveyor,  upon  whose  report  the  goods  are  permitted  to  be 
landed.  A  petition  had  been  presented  by  S.,  who  was  the  custom-iiousc  agent,  to  the 
plaintiff;  but  no  report  having  been  made  of  it,  the  land  surveyor  refused  to  permit  the 
goods  to  be  landed  ;  in  consequence  of  which  they  remained  in  the  ligliter  undiscliarged, 
where  they  received  the  damage  for  which  the  action  was  brought.  The  presenting  of 
the  petition  was  usually  done  by  the  custom-house  agent  of  the  party  to  whom  the 
goods  belonged,  not  bvthe  lighterman.  Held,  that  the  plaintiff  could  not  recover.  See 
Robinson  v.  Dunmore,  2  B^fc  P.  416;  Lord  Abinr/er,  Brind  v.  Dale,  8  C.  &  P.  207; 
Califf  I'.  Danvcrs,  1  Peake's  Cas.  114. 

3  Beckman  v.  Shouse,  5  Rawle,  179  ;  Clark  r.  Spence,  10  Watts,  335  ;  Runvan  v. 
Caldwell,  7  Humph.  134;  Piatt  v'.  llibbard,  7  Cow.  500,  n.  (a) ;  Schmidt  v.  Blood,  9 
Wend.  268;  Foote  i'.  Storrs,  2  Barb.  326  ;  Harrington  v.  Snyder,  3  Barb.  380. 

*  Shiells  I'.  Blackburne,  1  H.  Bl.  158;  Stanton  i-.  Bell,  2  Ilawks,  145;  and  see  cases 
cited  ante,  p.  196,  n.  2. 

17* 


198  ELEMENTS    OF  MERCANTILE   LAW.  [cil.  XII. 

his  own  property.^  For  the  want  of  this  care,  which  would  be 
gross  negligence,  he  is  responsible,  but  not  for  ordinary  negli- 
gence.2 

Whether  a  private  carrier  has  a  lien  on  the  goods  he  carries, 
for  his  compensation,  or,  in  other  words,  whether  he  may  hold 
them  until  that  be  paid,  is  not  certainly  determined,  but  we  think 
it  probable  he  has.  If  he  incurs  expenses  about  the  goods,  for 
sufficient  reason,  and  in  good  faith,  he  has  undoubtedly  a  lien  on 
them  for  those  expenses. 


SECTION  II. 

OF    THE    COMMON   CARRIER. 

The  law  in  relation  to  the  rights,  the  duties,  and  responsibilities 
of  a  common  carrier,  is  quite  peculiar.  The  reasons  for  it  are 
discernible,  but  it  rests  mainly  upon  established  usage  and  cus- 
tom. And  as  these  usages  have  changed  considerably  in  modern 
times,  this  law  has  undergone  modifications,  and  on  some  points 
may  be  considered  as  even  now  in  a  transition  state. 

The  rights  and  responsibilities  of  the  common  carrier  may  be 
briefly  stated  thus :  —  He  is  bound  to  take  the  goods  of  all  who 
offer,  if  he  be  a  carrier  of  goods,  and  the  persons  of  all  who  offer, 
if  he  be  a  carrier  of  passengers ;  and  to  take  due  care  and  make 
due  transport  and  due  delivery  of  them.     He  has  a  lien  on  the 

1  See  Jones  on  Bailments,  8;  Mytton  v.  Cock,  2  Strange,  1099;  Rooth  v.  Wilson, 
1  B.  &  Aid.  61  ;  Foster  v.  Essex  Bank,  17  Mass.  479  ;  Chase  v.  Maberry,  3  Harring. 
266.  In  Whitney  v.  Lee,  8  Met.  91,  where  a  promissory  note  was  delivered  to  the  de- 
fendant on  his  voluntary  undertaking,  without  reward,  "to  secure  and  take  care  of  it," 
it  was  held  that  he  was  not  bound  to  take  any  active  measures  to  obtain  security,  but 
was  simply  bound  to  keep  the  note  carefully  and  securely,  and  receive  the  money  due 
thereon  when  offered. 

-  The  great  leading  case  in  support  of  the  propositions  above  laid  down  in  the  text, 
is  that  of  Coggs  v.  Bernard,  2  Ld.  Raym.  909.  In  this  case,  the  declaration  stated  that 
the  defendant  undertook  to  remove  several  hogsheads  of  brandy,  then  in  a  cellar  in  D., 
and  safely  lay  them  down  again  in  a  certain  other  cellar  in  Water  Lane  ;  and  that  the 
said  defendant  and  his  servants  managed  so  negligently  that  one  of  the  casks  M'as 
staved.  After  not  guilty  pleaded  and  a  verdict  for  the  plaintiflp,  there  was  a  motion  in 
arrest  of  judgment,  for  that  it  was  not  alleged  in  the  declaration  that  the  defendant  was 
a  common  porter,  nor  averred  that  he  had  any  thing  for  his  pains.  But  the  court  were 
unanimously  of  opinion  that  if  a  man  undertakes  to  carry  goods  safely  and  securely,  he 
is  responsible  for  any  damage  they  may  sustain  in  the  carriage  through  his  negligence, 
although  he  was  not  a  common  carrier,  and  was  to  have  nothing  for  his  carriage.  The 
plaintitf,  therefore,  had  judgment.  And  see  Doorman  v.  Jenkins,  2  Ad.  &  El.  256; 
Tracy  v.  Wood,  3  Mason,  132 ;  Garnett  v.  Willan,  5  B.  -So  Aid.  53. 


en.  XIT.]  OF   THE   CARRIAGE   OF   GOODS.  199 

goods  which  he  carries,  and  on  the  baggage  of  passengers,  for  his 
compensation.  He  is  liable  for  all  loss  or  injury  to  the  goods 
under  his  charge,  unless  it  happens  from  the  act  of  God,  or  from 
the  public  enemy.  These  three  rules  will  be  considered  in  the 
next  section. 

He  is  a  common  carrier  "  who  undertakes,  for  hire,  to  transport 
the  goods  of  such  as  choose  to  employ  him,  from  place  to 
place;"  ^  or,  as  we  should  prefer  to  say,  from  some  known  and 
definite  place  or  places,  to  other  known  and  definite  place  or 
places.  He  is  one  who  undertakes  the  carriage  of  goods  as  a 
business;  and  it  is  mainly  this  which  distinguishes  him  from  the 
private  carrier.^  In  one  or  two  of  the  courts  of  this  country  there 
has  been  a  disposition  to  annul  this  distinction ;  and  to  affect  all 
persons  who  carry  goods  for  hire,  whether  casually  and  by  special 
employment,  or  as  a  general  business,  with  the  same  liabilities.^ 
But  this  disposition  is  not  general,  and  we  do  not  believe  it  will 
be  permanent  anywhere;   for  we  see  nothing  in  the  condition 

1  Per  Parl-cr.  C.  J.,  in  Dwight  r.  Brewster,  1  Pick.  50.  A  .similar  definition  is  given 
by  Gilchrist,  C.  J.,  in  Elkins  v.  The  Boston  and  Maine  R.  R.  Co.  3  Foster,  275.  x\nd 
see  Mersliou  v.  Hobensack,  2  New  Jersey,  372  ;  Gibson  v.  Ilurst,  2  Salk.  249;  Robert- 
son V.  Kennedy,  2  Dana,  430. 

-  In  Coggs  'r.  Bernard,  2  Ld.  Raym.  909,  Lord  Holt  speaks  of  the  carriage  of  goods 
for  hire  as  "either  a  delivery  to  one  that  exercises  a  public  employment,  or  a  delivery 
to  a  private  person."  And  see  Citizens'  Bank  v.  Nantucket  Steamboat  Company,  2 
Story,  32. 

"  See  Gordon  v.  Hutchinson,  1  W.  &  S.  285.  The  facts  of  this  case  were,  that  the 
defendant,  being  a  farmer,  applied  at  the  store  of  the  plaintiff  for  the  hauling  of  goods 
from  Lcwiston  to  Bellfont,  upon  his  return  from  the  former  place,  where  he  was  going 
witli  a  load  of  iron.  He  received  an  order,  and  loaded  the  goods.  On  the  way,  the 
head  came  out  of  a  hogshead  of  molasses,  and  it  was  wholly  lost.  In  this  action  the 
plaintiff  claimed  to  recover  the  price  of  it.  The  defendant  contended  that  he  was  not 
subject  to  the  responsibilities  of  a  common  carrier,  but  only  answerable  for  negligence, 
inasmuch  as  he  was  only  employed  occasionally  to  carry  for  hire.  But  the  court  below 
instructed  the  jury  that  the  defendant  was  answerable  upon  the  principles  which  govern 
tlie  liabilities  of  a  common  carrier.  And  the  Supreme  Court  lield  the  instructions  to 
be  correct.  And  in  M'Clure  v.  Richardson,  Rice,  215,  the  defendant  was  the  owner  of 
a  boat,  in  whicii  he  was  accustomed  to  carry  his  own  cotton  to  Charleston,  and  occa- 
sionally, when  he  had  not  a  load  of  his  own,  to  take  for  his  neighbors,  they  paying 
freight"  for  the  same.  One  Ilowzcr  was  the  master  or  patroon  of  the  boat,  and  the  gen- 
eral habit  was  for  those  who  wished  to  send  their  cotton  by  the  defendant's  boat,  to 
apply  to  the  defendant  himself  On  this  occasion,  the  patroon  had  been  told  to  take 
Col.  Goodwin's  and  Mr.  Dallas's  cotton,  which  he  had  done,  when  the  plaintiff  applied 
to  Howzer,  in  the  absence  of  defendant,  to  take  on  board  two  bales  of  cotton,  asking  him 
if  it  was  necessary  to  apply  to  the  defendant  himself,  to  wliich  Howzer  replied  be  thought 
not,  and  received  the  cotton.  Under  these  circumstances,  it  was  held  that  the  defendant 
was  bound  to  the  acts  of  Howzer,  as  being  within  the  general  scope  of  the  authority 
conferred  upon  by  placing  him  in  the  situation  of  master  of  the  boat,  and  that  the  de- 
fendant was  conseiiuently  chargeable  as  a  common  carrier  for  any  loss  of,  or  damage 
to  the  plaintifi^'s  cotton.  "And  in  the  following  cases  it  was  laid  down,  in  general  terms, 
that  all  persons  carrying  goods  for  hire,  come  under  the  denomination  of  common  car- 
riers. M'Clures  v.  Hammond,  1  Bay,  99;  Moses  r.  Norris,  4  N.  H.  304;  Turney  v. 
Wilson,  7  Yerg.  340 ;  Craig  v.  Childress,  1  Peck.  270. 


200  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XII. 

of  our  country,  or  of  our  carrying  business,  which  calls  for  this 
change  in  the  lavv.^ 

Truckmen  or  draymen,  porters,  and  others  who  undertake  the 
carriage  of  goods  for  all  aj3plicants  from  one  city  or  town  to 
another,  or  from  one  part  of  a  city  to  another,  are  chargeable  as 
common  carriers.^     So,  proprietors  of  stage  coaches  are  charge- 

1  It  would  seem  to  be  an  insuperable  objection  to  all  the  cases  cited  in  the  preceding 
note,  that  they  exclude  from  the  common  carrier  one  of  his  most  important  characteris- 
tics, namely,  his  obligation  to  carry  the  goods  of  any  person  offering  to  pay  his  hire; 
for,  in  several  of  them  it  was  conceded  that  the  person  whom  they  held  liable  was  under 
no  obligation  to  undertake  tiie  carrying  in  question.  Tlie  case  of  Chevallicr  v.  Stra- 
ham,  2  Texas,  115,  may  be  thought  to  sanction  the  doctrines  laid  down  in  the  cases  in 
the  preceding  note,  but  we  tliinlv  it  does  not.  In  that  case  it  appeared  that  the  defend- 
ant's principal  business  was  farming,  but  tluit  at  a  certain  period  of  the  year,  known  as 
the  hauling  season,  he  engaged  in  the  forwarding  business,  and  ran  his  wagon  when- 
ever he  met  with  an  opportunity.  Under  these  circumstances,  he  was  held  liable  as  a 
common  carrier.  And  tlie  court  said  :  "  From  a  comparison  of  the  various  authorities 
to  wiiich  we  have  referred  for  the  distinguishing  characteristics  of  both  common  and 
private  carriers,  it  may  be  laid  down  as  a  rule  that  all  persons  who  transport  goods 
from  place  to  place  for  hire,  for  such  persons  as  see  fit  to  employ  them,  wiiether  usually 
or  occasionally,  whether  as  a  principal  or  incidental  and  subordinate  occupation,  are 
common  carriers,  and  incur  all  tlieir  responsibilities.  There  are  no  grounds  in  reason 
why  the  occasional' carrier,  wiio  periodically  in  every  recurring  year  abandons  his  other 
pursuits,  and  assumes  tliat  of  transporting  goods  for  the  public,  should  be  exempted 
from  any  of  the  risks  incurred  by  those  who  make  the  carrying  Imsiness  their  constant 
and  principal  occupation.  For  the  time  being  he  shares  all  the  advantages  arising  from 
the  business  ;  and  as  the  extraordinary  responsibilities  of  a  common  carrier  are  imposed 
by  policy  and  not  the  justice  of  the  law,  this  policy  should  be  uniform  in  its  operation, 
—  imparting  equal  benefits,  and  inflicting  the  like  burdens  upon  all  wlio  assume  the 
capacity  of  public  carriers,  whether  temporarily  or  permanently,  periodically  or  contin- 
uously." It  will  be  seen  that  tlie  only  question  involved  in  this  case  was,  whether  it 
was  necessary,  in  order  to  constitute  one  a  common  carrier,  that  he  should  hold  himself 
out  as  such  continuously,  or  whether  it  was  sufficient  if  he  held  himself  out  as  such 
during  a  certain  period  of  the  year.  Under  the  circumstances,  there  can  be  no  doubt 
that  the  defendant  would  have  been  bound  to  carry  for  any  one  who  wished  to  em]iloy 
him  during  the  season  in  question  ;  and  upon  tiiis  ground  he  was  held  to  be  a  common 
carrier.  That  no  one  can  be  considered  as  a  common  carrier,  unless  he  has  in  some 
way  held  himself  out  to  the  puljlic  as  a  carrier,  in  such  a  manner  as  to  render  him 
liable  to  an  action  if  he  should  refuse  to  carry  for  any  one  who  wished  to  employ  him, 

seems  to  be  the  true  test.     See   Samms  i'.  Stewart,  20  Ohio,  69  ;  v.  Jackson,  1 

Hayw.  14;  Fish  v.  Chapman,  2  Georgia,  349.  In  this  case  the  court  say  of  the  case 
of  Gordon  v.  Hutchinson,  that  there  can  be  little  doubt  that  that  case  is  opposed  to  the 
principles  of  the  common  law,  and  its  rule  wholly  inexpedient.  And  see  Satterlee  v. 
Grant,  1  Wend.  272  ;  Kimball  v.  Rut.  and  Bur.  K.  R.  Co.  26  Vt.  247. 

-  Robertson  v.  Kennedy,  2  Dana,  430.  This  was  an  action  against  the  defendant 
for  the  loss  of  a  hogshead  of  sugar,  which  he,  as  a  common  carrier,  had  undertaken,  for 
a  reasonable  compensation,  to  carry  from  the  bank  of  the  river  in  Brandenburgh  to  the 
plaintifi''s  store,  in  the  same  town.  At  the  trial  the  jdaintiff  introduced  evidence  tend- 
ing to  show  that  the  defendant  had  been  in  the  liabit  of  hauling  for  hire  in  the  town  of 
Brandenburgh,  for  every  one  who  applied  to  him,  with  an  ox  team  driven  by  his  slave; 
that  he  had  undertaken  to  liaul  for  the  plaintiff  the  hogshead  in  question  ;  and  that, 
after  .the  defendant's  slave  had  placed  the  hogshead  on  a  slide,  for  the  purpose  of  haul- 
ing it  to  the  defendant's  store,  the  slide  and  hogshead  slipped  into  the  river,  whereby 
the  sugar  was  spoiled.  Under  these  circumstances,  the  court  held  that  the  defendant 
was  liable  as  a  common  carrier.  In  Brind  c.  Dale,  8  C  &  1*.  207,  Lord  Ahinger  ex- 
pressed the  opinion  that  a  town  carman,  whose  carts  fly  for  hire  near  the  wharves,  and 
who  lets  them  l)y  the  hour,  day,  or  jol),  is  not  a  common  carrier.  But  the  correctness 
of  this  opinion  is  questioned'  by  Mr.  Justice  Story.  See  Story  on  Bailments,  \  496. 
And  the  case  itself  must  be  considered  as  shaken,  if  not  directly  overruled,  by  the  case 


CH.  XII.]  OF  THE  CARRIAGE  OF  GOODS.  201 

able  as  common  carriers  of  passengers,  and  of  the  baggage  of 
passengers;  or  of  others,  if  they  so  advertise  themselves.^  So  are 
hackney  coachmen  within  their  accustomed  range. 

In  this  country,  in  recent  times,  the  business  of  carrying  goods 
and  passengers  is  almost  monopolized  by  what  are  called  express- 
men, by  railroads,  or  by  lines  of  steam  packets  along  our  coasts, 
or  upon  our  navigable  streams  or  lakes.  These  are  undoubtedly 
common  carriers ;  and  although  their  peculiar  method  of  carrying 
on  this  business  is  new,  and  will  presently  require  from  us 
especial  consideration,  there  can  be  no  doubt  of  their  being,  to 
all  intents  and  purposes,  common  carriers.^ 

of  Ingrate  u.  Christie,  3  Carr.  &  Kir.  61.  That  was  an  action  against  a  lighterman, 
wlio  was  in  the  habit  of  carrying  goods,  for  all  persons  who  wished  to  employ  him, 
from  the  wharves  in  London  to  the  ships  in  the  harbor.  The  question  being  raised 
wliether  the  defendant  was  a  common  carrier,  and  Story  on  Bailments  cited,  ubi  supra, 
Alderson,  B.,  said  :  "Mr.  Justice  Story  is  a  great  authority;  and  if  we  would  but  adhere 
to  principle,  the  law  would  be,  what  it  ought  to  be,  a  science.  There  may  be  cases  on 
all  sides,  but  I  will  adhere  to  principle,  if  I  can.  If  a  person  holds  himself  out  to  carry 
goods  for  every  one  as  a  business,  and  he  thus  carries  from  the  wharves  to  the  ships  in 
harbor,  he  is  a  common  carrier  ;  and  if  the  defendant  is  a  common  carrier,  he  is  liable 
here.     There  nmst  be  a  verdict  for  the  plaintiff." 

^  "  If  a  coachman  commonly  carry  goods,  and  take  money  for  so  doing,  he  will  be 
in  the  same  case  with  a  common  carrier,  and  is  a  carrier  for  that  purpose,  whether  the 
goods  ai-c  a  passenger's,  or  a  stranger's."  Per  Jones.  J.,  in  Lovett  v.  Hobbs,  2  Show. 
127.  So,  in  Dwight  v.  Brewster,  1  Pick.  50,  it  was  held  that  the  practice  of  carrying 
for  hire,  in  a  stage  coach,  parcels  not  belonging  to  passengers,  constitutes  the  proprie- 
tors of  the  coach  common  carriers.  And  see  Beckman  v.  Shouse,  5  Rawle,  179;  Clark 
r.  Faxton,  21  Wend.  153;  Jones  v.  Voorhees,  10  Ohio,  145;  Merwin  v.  Butler,  17 
Conn.  138.  But  in  Sheldon  v.  Robinson,  7  N.  H.  157,  it  was  held  that  the  driver  of  a 
stage  coach,  in  the  general  employ  of  the  proprietors  of  the  coach,  and  in  the  habit  of 
transporting  packages  of  money  for  a  small  compensation,  which  was  uniform,  whatever 
might  be  the  amount  of  the  package,  was  a  bailee  for  hire,  answerable  for  ordinary 
negligence,  and  not  subject  to  the  responsibilities  of  a  common  carrier,  there  being  no 
evidence  to  show  him  a  common  carrier,  further  than  the  fact  that  he  took  such  pack- 
ages of  money  as  were  offered.  And  Parker,  J.,  said  :  "  The  evidence  does  not  show 
the  defendant  a  common  carrier.  It  does  not  show  him  fo  have  exercised  the  business 
of  carrying  packages,  as  a  public  employment,  because  his  public  employment  was  that 
of  a  driver  of  a  stage-coach,  in  the  employ  of  others.  It  does  not  show  that  he  ever 
undertook  to  carry  goods  or  money  for  persons  generally,  although  he  may  in  fact  have 
taken  all  that  was  offered,  as  a  matter  of  convenience;  or  that  he  ever  held  himself  out 
as  ready  to  engage  in  the  transportation  of  whatever  was  requested,  notwithstanding  it 
may  have  been  usual  for  him  and  other  drivers  to  carry  it.  This  was  not  his  general 
employment,  and  there  is  nothing  to  show  that  he  would  have  been  liable,  liad  he  re- 
fused to  take  this  money,  especially  as  he  was  in  the  service  of  another,  and,  as  such 
servant,  might  have  had  duties  to  perform  inconsistent  with  the  duty  of  a  common  car- 
rier. The  amount  to  be  paid  for  transportation  is  also  to  be  considered.  A  common 
carrier  is  an  insurer,  and  entitled  to  be  paid  a  premium  for  his  insurance.  Tliere  being 
no  evidence  that  any  compensation  was  agreed  on  between  these  parties,  it  is  to  be 
presumed  that  the  usual  compensation  was  to  be  paid.  The  plaintiff  might  have  relied 
on  the  usage  upon  a  claim  of  payment.  And  as  the  sum  was  small  and  uniform,  what- 
ever miglit  be  the  amount  of  money,  it  would  seem  very  clear  that  no  one  committing 
a  package  of  money  to  the  defendant  under  such  circumstances,  and  without  any  spe- 
cial agreement,  could  have  considered  him  an  insurer  of  safety."  See  also  Bean  v. 
Sturtevant,  8  N.  H.  146. 

2  In  Thomas  v.  B.  and  P.  Railroad  Co.  10  Met.  472,  Hubbard,  J.,  remarking  upon 


202  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIL 

Ordinary  sailing  vessels  are  sometimes  said  to  be  common 
carriers.  We  should  be  disposed  to  restrict  this  term,  however, 
to  regular  packets;  or  at  most,  to  call'  by  this  name,  general 
freighting  ships.  It  is  not,  however,  necessary  to  consider  this 
question,  as  water-borne  goods  are  now  always  carried  under  bills 
of  lading,  which  determine  the  relations  and  respective  rights  of 
the  parties ;  and  these  we  shall  consider  in  our  chapter  on  the 
law  of  shipping. 

The  boatmen  on  our  rivers  and  canals  are  common  carriers;' 
and  ferrymen  are,  perhaps,  common  carriers  of  passengers  by 
their  office,  and  may  become  common  carriers  of  goods  by  taking 
up  that  business.^  A  steamboat  usually  employed  as  a  carrier, 
may  do  something  else,  as  tow  a  vessel  out  of  a  harbor,  or  the 
like,  and  her  usual  character  does  not  attach  to  this  especial 
employment  and  carry  with  it  its  stringent  liabilities.  Therefore, 
for  a  loss  occurring  to  a  ship  in  her  charge  while  so  employed, 
the  owner  of  the  steamer  is  liable  only  for  negligence  on  the  part 
of  those  whom  he  employs.^     . 

the  liability  of  railroad  companies  as  common  carriers,  said:  "The  introduction  of 
railroads  into  the  State  has  been  followed  by  their  construction  over  the  great  lines  of 
travel,  of  passengers,  and  the  transportation  of  merchandise;  and  the  proprietors  of 
these  novel  and  important  modes  of  travel  and  transportation,  which  have  received  so 
much  public  favor,  have  become  the  carriers  of  great  amounts  of  merchandise.  They 
advertise  for  freight ;  they  make  known  the  terms  of  carriage  ;  they  provide  suitable 
vehicles,  and  select  convenient  places  for  receiving  and  delivering  goods  ;  and  as  a  legal 
consequence  of  such  acts,  they  have  become  common  carriers  of  merchandise,  and  are 
subject  to  the  provisions  of  the  common  law,  which  are  applicable  to  carriers."  And 
see  McArthur  v.  Sears,  21  Wend.  190. 

1  See  McArthur  v.  Sears,  21  Wend.  190 ;  Turney  v.  Wilson,  7  Yerg.  .341 ;  Gordon 
r.  Buchanan,  .5  Yerg.  7 1 . 

■^  See  Ponieroy  v.  Donaldson,  5  Missouri,  36 ;  Cohen  v.  Hume,  1  McCord,  439 ; 
Smith  V.  Seward,  3  Barr.  .342 ;  Fisher  v.  Clisbee,  12  111.  344.  In  Littlejohn  v.  Jones,  2 
McMullan,  365,  it  was  held  that  the  owner  of  a  private  ferry  might  so  use  it  (although 
on  a  road  not  opened  by  public  authority  or  repaired  by  public  labor)  as  to  subject 
himself  to  the  liability  of  a  common  carrier. 

3  Caton  V.  Rumney,  13  Wend.  387;  Alexander  v.  Greene,  3  Hill,  9.  In  this  last 
case,  Bronson,  J.,  said  :  "  I  think  the  defendants  arc  not  common  carriers.  They  do 
not  receive  the  property  into  their  custody,  nor  do  they  exercise  any  control  over  it, 
other  than  such  as  results  from  the  towing  of  the  boats  in  which  it  is  laden.  They 
neither  employ  the  master  and  hands  of  the  boats  towed,  nor  do  they  exercise  any 
authority  over  them  beyond  that  of  occasionally  requiring  their  aid  in  governing  the 
flotilla.  The  goods  or  other  property  remain  in  the  care  and  charge  of  the  master  and 
hands  of  the  boat  towed.  In  case  of  loss  by  fire  or  robbery,  without  any  actual  default 
on  the  part  of  the  defendants,  it  can  hardly  be  pretended  that  they  would  be  answer- 
able, and  yet  carriers  must  answer  for  such  a  loss."  This  case  afterwards,  however, 
came  before  the  Court  of  Errors,  and  that  court  reversed  the  judgment  of  the  Supreme 
Court.  But  upon  what  principle  of  law  cannot  be  learned  from  the  opinions  delivered. 
And  in  the  more  recent  case  of  Wells  v.  Steam  Navigation  Co.  2  Comst.  207,  in  the 
Court  of  Appeals  of  the  same  State,  this  decision  of  the  Court  of  Errors  was  declared 
to  be  of  no  authority,  and  the  former  decisions  of  the  Supreme  Court  were  established. 
And  see,  to  the  same  effect,  Leonard  v.  Ilendrickson,  18  Penn.  St.  40.    It  has  been 


ClI.  XI r.]  OF   THE   CARllIAGE   OF   GOODS.  203 

The  same  person  may  be  a  common  carrier  and  also  hold 
other  offices  or  relations.  He  may  be  a  warehouseman,  a  wharf- 
inger, or  a  forwarding  merchant.  The  peculiar  liabilities  of  the 
cbmmon  carrier,  (to  be  spoken  of  presently,)  do  not  attach  to 
either  of  these  offices  or  employments.  Thus,  a  warehouseman 
is  liable  for  loss  of  the  goods  which  he  takes  for  storage,  only  in 
case  of  his  own  negligence ;  he  is  not,  as  a  common  carrier  is 
said  to  be,  an  insurer  of  the  goods.i  The  question  then  arises 
when  the  liability  of  such  a  person  is  that  of  a  warehouseman, 
and  when  it  is  that  of  a  carrier.  If  a  carrier  receives  goods  to  be 
stored  until  he  can  carry  them,  —  a  canal  boatman,  for  example, 
—  or  if  at  the  end  of  the  transit,  he  stores  them  for  a  time  for  the 
safety  of  the  goods  or  the  convenience  of  the  owner,  while  thus 
stored  he  is  liable  only  as  warehouseman.^  But  if  he  puts  them 
into  his  store  or  office  only  for  a  short  time,  and  for  his  own  con- 
venience, either  at  the  beginning  or  the  end  of  the  transit,  they 
are  in  his  hands  as  carrier,^  Where  these  relations  seem  to  unite 
and  mingle  in  one  person,  it  may  be  said  to  be  the  general  rule 
that,  wherever  the  deposit,  in  whatever  place  or  building,  is 
secondary  and  subordinate  to  the  carriage  of  the  goods,  which  is 
therefore  the  chief  thing,  the  party  taking  the  goods  is  a  carrier; 
and   otherwise   a   depositary  only  of  some  kind.*     If,  therefore, 

held,  however,  in  Louisiana,  tliat  the  owners  of  steam  tow-boats  are  liable  as  common 
carriers.  Sec  Smith  v.  Pierce,  1  Louis.  .349  ;  Adams  v.  New  Orleans  Steam  Tow-boat 
Co.  1 1  Louis.  46.  And  Mr.  Justice  Kane,  of  the  United  States  District  Court  for  the 
Eastern  District  of  Pennsylvania,  in  the  case  of  Vanderslice  v.  Steam  Tow-boat  Su- 
perior, 13  Law  Reporter,  399,  urged  very  strongly  the  reasons  for  holding  them  so 
lialde,  hut  did  not  decide  the  point. 

1  See  Foote  !-.  Storrs,  2  Barb.  326;  Hatchett  v.  Gibson,  13  Ala.  ."jS?;  Chenowith  v. 
Dickinson,  8  B.  Mon.  156:  Calctf  v.  Danvers,  Feck,  114;  Piatt  v.  Ilibbard;  7  Cow. 
497 ;  Knapp  v.  Curtis,  9  Wend.  60. 

-  Garside  r.  Trent  and  Mercy  Navigation,  4  T.  R.  581.  In  this  case  the  defendants, 
being  common  carriers  between  Stourport  and  Manchester,  received  goods  from  the 
plaiutitl',  at  Stourport,  to  be  carried  to  Manchester,  and  to  be  forwarded  from  the  latter 
place  to  Stockport.  The  defendants  carried  the  goods  to  Manchester,  and  there  put 
them  in  their  warehouse,  in  which  they  were  destroyed  by  an  accidental  fire  before  they 
had  an  opportunity  of  forwarding  them.  The  court  held  that  they  were  not  answer- 
able for  the  loss.  And  see  Biown  v.  Denison,  2  Wend.  593  ;  Ackley  v.  Kellogg,  8 
Cow   223  ;  Piatt  v.  Hilibard,  7  Cow.  497.     See  also  Roberts  v.  Turner, 'l2  Johns.  232. 

"*  Camden,  &c..  Transportation  Co.  r.  Belknap,  21  Wend.  334  ;  Woods  t".  Devin,  13 
111.  746 ;  Moses  v.  Boston  and  Maine  R.  R.  4  Foster,  71 ;  Teall  v.  Scars,  9  Barb.  317. 

■1  In  In  re  Wel)b,  8  Taunt.  443,  A,  B,  C,  and  D,  in  partnership  as  carriers,  agreed 
with  S.  &  Co.,  of  Frome,  to  carry  goods  from  London  to  Frome,  where  they  were  to 
be  deposited  in  a  warehouse  belonging  to  the  partnership  at  Frome,  where  A  resided, 
without  any  charge  for  the  warcliouse  room,  till  it  should  be  convenient  for  S.  &  Co. 
to  take  the  goods  home.  Goods  of  S.  &  Co.,  carried  by  the  partners  from  London  to 
Frome,  under  this  agreement,  were  deposited  in  the  warehouse  at  the  latter  place,  and 
destroyed  iiy  tire.  Held,  that  the  partners  were  not  liable.  So,  in  Thomas  i\  B.  and 
P.  R.  R.  Co.  10  Met.  472,  it  was  held  that  the  proprietors  of  a  railroad,  who  transport 


204  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XII. 

goods  are  delivered  to  a  carrier,  or  at  his  depot  or  receiving  room, 
with  directions  not  to  carry  them  until  further  orders,  he  is  only 
a  depositary  and  not  a  carrier,  until  those  orders  are  received ; 
but  when  they  are  received,  he  becomes  a  carrier;  and  if  the 
goods  are  afterwards  lost  or  injured  before  their  removal,  he  is 
liable  as  a  common  carrier.' 


SECTION   III. 

OF    THE    OBLIGATION    OF    THE    COMMOX    CAKKIER    TO    KECEIVE    AND    CARKT 
GOODS    OR   PASSENGERS. 

He  cannot  refuse  to  receive  and  carry  goods  offered,  without 
good  cause;  for,  by  his  openly  announcing  himself  in  any  way 
as  engaged  in  this  business,  he  makes  an  offer  to  the  public 
which  becomes  a  kind  of  contract  as  to  any  one  who  accepts  it.^ 
He  may  demand  his  compensation,  however  ;  and  if  it  be  refused, 
he  may  refuse  to  carry  the  goods;  nor  is  he  bound  to  carry  them 
if  security  be  offered  to  him,  but  not  the  money.^  So  he  may 
refuse  if  his  means  of  carriage  are  already  fully  employed  ;*  if  he 
cannot  carry  the  goods  without  danger  to  them,  or  to  himself  or 

goods  over  their  road,  and  deposit  them  in  their  warehouse  without  charge,  until  the 
owner  or  consignee  has  a  reasonable  time  to  take  them  away,  are  not  liable  as  common 
carriers  for  the  loss  of  the  goods  from  the  warehouse,  but  arc  lial)le,  as  depositaries, 
only  for  ordinary  care.  And  see,  to  the  same  effect,  Norway  Plaius  Co.  v.  13.  and  M. 
R.  K.  1  Gray,  263. 

1  In  Moses  v.  B.  and  M.  E.  E.  4  Tost.  71,  it  was  held  that,  where  a  railroad  corpo- 
ration, being  common  carriers,  have  a  warehouse  at  which  they  receive  goods  for  trans- 
portation, and  goods  are  delivered  there  with  instructions  to  forward  presently,  while 
the  goods  remain  in  the  warehouse  for  the  convenience  of  the  railroad,  until  they  can  be 
forwarded  in  tiie  usual  course  of  business,  the  railroad  holds  them,  as  common  carriers, 
and  is  liaVile  for  them  as  such.  But  if  the  goods  are  kept  back  in  the  warehouse  for 
the  convenience  of  the  owner,  and  by  his  order,  while  they  are  so  detained  the  railroad 
■will  not  be  liable  as  common  carriers,  but  as  depositaries  only.  And  instructions  to 
forward  goods  forthwith  may  be  inferred  from  an  established  course  of  dealing  between 
the  owner  and  carrier,  without  direct  evidence  of  instructions. 

-  See  Jackson  v.  Eogers.  2  Show.  327:  Lane  v.  Cotton,  12  Mod.  472;  Pickford  v. 
The  Grand  Junction  Eailway  Co.  8  M.  &  W.  372 ;  Johnson  v.  Midland  Eailway  Co. 
4  Exch.  367. 

3  But  if  the  freight  money  be  not  demanded,  and  the  owner  of  the  goods  be  willing 
and  ready  to  pay  it,  he  need  not  make  a  formal  tender.  See  Pickford  v.  Grand  Junc- 
tion Eailway  Co.  8  M.  &  W.  372. 

■^  Thus,  in  Lovett  v.  Hobbs,  2  Show.  127,  which  was  an  action  against  a  coach- 
master  for  refusal  to  carry  goods,  evidence  that  the  coach  was  full,  was  agreed  to  be  a 
good  answer.  But  where  the  defendants,  being  common  carriers,  had  issued  excursion 
tickets  for  a  journey,  it  was  held  that  they  Avere  not  excused  from  carrying  passengers 
according  to  their  contract,  upon  tiie  ground  that  there  was  no  room  for  them  in  their 
conveyance ;  but,  in  order  to  avail  themselves  of  this  answer,  they  should  make  their 
contract  conditional  upon  there  being  room.  Hawcroft  i'.  The  Great  Northern  Eailway 
Co.  8  Eng.  Law  and  Eq.  362. 


CH.  XII.]  OF   THE   CARRIAGE    OF   GOODS.  205 

other  goods  ;^  or  without  extraordinary  inconvenience  ;2  or  if 
they  are  not  such  goods  as  it  is  his  regular  business  to  carry.^ 
He  is  always  entitled  to  his  usual  charge  ;^  but  not  to  extraordi- 
nary compensation,  unless  for  extraordinary  service.^ 

The  conjmon  carrier  of  goods  is  bound  to  receive  them  in  a 
suitable  way,  and  at  suitable  times  and  places.  If  he  has  an 
office  or  station,  he  must  have  proper  persons  there  and  proper 
means  of  security.  During  the  transit,  and  at  all  stopping  places, 
due  care  must  be  taken  of  all  goods;  and  that  means  the  kind 
and  measure  of  care  appropriate  for  goods  of  that  description. 
If  he  have  notice,  by  writing  on  the  article  or  otherwise,  of  the 
need  of  peculiar  care,  as  "glass,  with  great  care,"  or  "this  side 
uppermost,"  or  "  to  be  kept  dry,"  he  is  bound  to  comply  with 
such  directions,  supposing  them  not  to  impose  unnecessary  care 
or  labor.^ 

Jf  he  carry  passengers,  he  must  receive  all  who  offer ; ''  carry 

1  See  Edwards  v.  Sherratt,  1  East,  604  ;  Pate  v.  Henry,  5  Stew.  &  Porter,  101. 

2  Lane  v.  Cotton,  1  Ld.  Raym.  646. 

s  Sewall  V.  Allen,  6  Wend.  33.5  ;  Johnson  ;;.  The  Midland  Railway  Co.  4  Exch.  367; 
Citizens'  Bank  v.  Nantucket  Steamboat  Co.  2  Story,  16.  In  Tunnell  w.  Pettijohn,  2 
Harrington,  48,  it  was  held  that,  to  charge  a  pei'son  as  a  common  carrier,  it  must  be 
shown  that  the  usage  of  his  business  includes  the  goods  carried,  or  that  there  was  a 
special  contract  to  carry  them. 

*  Harris  v.  Packwood,  3  Taunt.  264;  Pickford  v.  Grand  Junction  Railway  Co.  10 
M.  &  W.  399. 

^  Sfe  Crouch  v.  The  London,  &c.  Railway  Co.  2  Car.  &  Kir.  789.  In  Tyly  v.  Mor- 
rice,  Carth.  486,  where  a  carrier  was  to  carry  a  bag  of  gold  across  Hownslow  Heath, 
it  was  held  that  he  was  entitled  to  charge  a  rate  of  remuneration  proportional  to  the 
increased  risk.  And  see,  per  Best,  J.,  in  Riley  v.  Home,  5  Biug.  217;  HoUister  i: 
Nowlen,  19  Wend.  239. 

**  Thus,  in  Hastings  v.  Pepper,  11  Pick.  41,  where  a  box  containing  a  glass  Lottie 
filled  M'ith  oil  of  cloves,  was  delivered  to  a  common  carrier,  marked,  "Glass  —  with 
care  —  this  side  up," .it  was  held  that  this  was  a  sufficient  notice  of  the  value  and  nature 
of  the  contents  to  charge  him  for  the  loss  of  the  oil,  occasioned  by  his  disregarding 
suoh  direction.  And  Shair,  C.  J.,  in  delivering  the  opinion  of  the  court,  said :  '"As 
the  carriage  is  a  matter  of  contract,  as  the  owner  has  a  right  to  judge  for  himself  what 
position  is  best  adapted  to  carrying  goods  of  this  description  with  safety,  and  to  direct 
how  they  shall  be  carried,  and  as  the  carrier  has  a  right  to  fix  his  own  rate  of  carriage, 
or  refuse  altogether  to  take  the  goods  with  such  directions,  the  court  are  all  of  opinion 
that,  if  a  carrier  accepts  goods  for  carriage  thus  marked,  he  is  bound  to  carry  the  goods 
in  the  manner  and  position  required  by  the  notice."  And  see  also,  Sager  v.  Ports- 
mouth, &c..  Railroad  Co.  31  Maine,  228. 

"<  Thus,  in  Bennett  v.  Button,  10  N.  H.  481,  it  was  held  that  the  proprietors  of  a 
stage-coach,  who  hold  tlicmselves  out  as  common  carriers  of  passengers,  are  bound  to 
receive  all  who  recjuire  a  passage,  so  long  as  they  have  room,  and  there  is  no  legal  ex- 
cuse for  a  refusal ;  and  that  it  was  not  a  lawful  excuse  that  they  ran  their  coach  in 
connection  with  another  coach,  wljich  extended  tlie  line  to  a  certain  place,  and  had 
agreed  with  the  proprietor  of  such  other  coach  not  to  receive  passengers  who  came 
from  that  place  on  certain  days,  unless  they  came  in  his  coach.  The  defendant  was 
one  of  the  proprietors  and  driver  of  a  stage-coach  running  daily  between  Amherst  and 
Nashua,  which  connected  at  the  latter  place  with  another  coach  running  between 
Nashua  and  Lowell,  and  thus  formed  a  continuous  mail  and  passenger  line  from  Lowell 

18 


206  ELEMENTS    OP   MERCANTILE    LAW.  [CIL  XII. 

them  over  the  whole  route,'  and  at  a  proper  speed,^  or  supply- 
proper. means  of  transport;  demand  only  a  reasonable  or  usual 
compensation ; 3  notify  his  passengers  of  any  peculiar  dangers;* 
treat  all  alike,  unless  there  be  actual  and  sufficient  reason  for  the 
distinction,  as  in  the  filthy  appearance,  dangerous  condition,  or 
misconduct  of  a  passenger;  behave  to  all  with  civility  and  de- 
corum;^ and  employ  competent  persons  for  all  duties;  and  for 

to  Amherst  and  onward  to  Franccstovt'n.  A  tliird  person  ran  a  coach  to  and  from 
Nashua  and  Lowell,  and  the  defendant  agreed  with  the  proprietor  of  the  coach  con- 
necting with  his  line,  that  he  would  not  receive  passengers  who  came  from  Lowell  to 
Nashua  in  the  coach  of  such  tliird  person  on  the  same  day  that  they  applied  for  passage 
to  the  places  above  Nashua.  The  plaintiff  was  notified  at  Lowell  of  this  arrangement, 
but  notwithstanding  came  from  Lowell  to  Nashua  in  that  coach,  and  tliere  demanded  a 
passage  in  the  defendant's  coach  to  Amherst,  tendering  the  regular  fare.  Upon  these 
facts  it  was  held,  that  the  defendant  was  bound  to  receive  him,  there  being  sufficient 
room,  and  no  evidence  that  tlie  pLaintiflF  was  an  unfit  person  to  be  admitted,  or  tliat  he 
had  any  design  of, injuring  the  defendant's  business.  But  this  obligation  of  the  pas- 
senger carrier  is  subject  to  the  conditions  of  tliere  being  suflScient  room  ;  that  the  person 
applying  for  carriage  is  a  fit  person  to  be  received  as  a  passenger,  and  that  he  has  no 
design  to  interfere  in  any  way  with  the  carrier's  interests,  or  to  disturb  his  line  of 
patronage.  So  all  persons  may  be  excluded  who  refuse  to  obey  the  reasonable  regula- 
tions which  are  made  for  the  government  of  the  line;  and  the  carrier  may  rightfully 
inquire  into  the  habits  or  motives  of  passengers  who  offer  themselves.  Sec  Jencks  v. 
Coleman,  2  Suran.  221.  This  was  an  action  against  the  proprietor  of  a  steamboat, 
running  from  New  York  to  Providence,  for  refusing  to  receive  the  plaintiff  on  board  as 
a  passenger.  The  plaintiff  was  the  known  agent  of  the  Tremont  Line  of  Stage-coaches. 
The  proprietors  of  the  steamboats  President  and  Benjamin  Franklin  had,  as  the  plain- 
tiff knew,  entered  into  a  contract  with  another  line,  called  The  Citizens'  Stage-coach 
Company,  to  carry  passengers  between  Boston  and  Providence,  in  connection  with  the 
boats.  The  plaintiff  had  been  in  the  habit  of  coming  on  board  the  steamboats  at  Provi- 
dence and  Newport,  for  the  purpose  of  soliciting  passengers  for  the  Tremont  Line, 
which  the  proprietors  of  The  President  and  Benjamin  Franklin  had  prohibited.  It  was 
held  that,  if  the  jury  should  be  of  opinion  that  the  above  contract  was  reasonable  and 
bond  Jide,  and  not  entered  into  for  the  purjiose  of  an  oppressive  monopoly,  and  that  the 
exclusion  of  the  plaintiff  was  a  reasonalile  regulation  rn  order  to  carry  this  contract 
into  effect,  tlie  proprietors  of  the  steamboat  would  be  justified  in  refusing  to  take  the 
plaintiflf  on  board.  And  in  Commonwealth  v.  Power,  7  Met.  596,  it  was  held  that,  if 
an  innkeeper,  M'ho  has  frequently  entered  a  railroad  depot  and  annoyed  passengers  by 
soliciting  them  to  go. to  his  inn,  receives  notice  from  the  superineendent  of  the  depot 
that  he  must  do  so  no  more,  and  he  nevertheless  repeatedly  enters  the  depot  for  the 
same  purpose,  and  afterwards  obtains  a  ticket  for  a  passage  in  the  cars,  with  a  bond  fide 
intention  of  entering  the  cars  as  a  passenger,  and  goes  into  the  depot  on  his  way  to  the 
cars,  and  the  superintendent,  believing  that  he  liad  entered  the  depot  to  solicit  passen- 
gers, orders  him  to  go  out,  and  he  does  not  exhibit  his  ticket  nor  give  notice  of  his  real 
intention,  but  presses  forward  towards  the  cars,  and  the  superintendent  and  his  assist- 
ants therefore  forcibly  remove  him  from  the  depot,  using  no  more  force  than  is  neces- 
sary for  that  purpose,  such  removal  is  justifiable,  and  not  an  indictable  assault  and 
battery. 

1  Dudley  v.  Smith,  1  Camp.  1G7;  Massiter  v.  Cooper,  4  Esp.  260.  In  Coppin  v. 
Braithwaite,  8  Jur.  875,  it  is  said  to  have  been  ruled,  by  Rolfe,  B.,  at  Nisi  Prius,  that  a 
carrier  having  received  a  pickpocket  as  a  passenger  on  board  his  vessel,  and  taken  his 
fare,  he  cannot  put  him  on  shore  at  an  intermediate  place,  so  long  as  he  is  not  guilty 
of  any  impropriety.     But  see  preceding  note.  • 

-  See  Carpue  v.  The  L.  and  R.  Railway  Co.  5  Q.  B.  747 ;  Mayor  v.  Humphries,  1 
C.  &  P.  251.  And  see,  per  Best,  C.  J.,  8  C.  &  P.  694,  n.  (b) ;  Stokes  v.  Saltonstall,  13 
Pet.  181. 

^  See  ante,  p.  205,  n.  5. 

*  Laing  v.  Colder,  8  Penn.  St.  479. 

*  Chamberlain  v.  Chandler,  3  Mason,  242  ;  Keene  v.  Lizardi,  5  Louis.  431. 


CII.  Xn.]  OF  THE  CARRIAGE  OF  GOODS.  207 

failure  in  any  of  these  particulars,  he  is  responsible  to  the  extent 
of  any  damage  caused  thereby,  including,  in  many  cases,  pain 
and  injury  to  the  feelings.^  He  is  also  bound  to  deliver  to  each 
passenger  all  his  baggage  at  the  end  of  his  journey  ;2  and  is  held 
liable  if  he  delivers  it  to  a  wrong  party  on  a  forged  order,  and 
without  personal  default.'^ 

Lastly,  he  must  make  due  delivery  of  the  goods,  to  the  sender, 
or  to  the  person  whom  the  sender  may  appoint,*  and  at  the 
proper  time,^  in  the  proper  way,  and  at  the  proper  place.*^  As  to 
the  party  to  whom  the  goods  should  be  delivered,  he  should  be 
the  owner  or  sender,  or  some  one  authorized  by  himJ  And  if  a 
party  authorized  to  receive  them,  refuse,  or  is  unable  to  do  so, 
the  carrier  must  keep  them  for  the  owner,  and  with  due  care; 
but  now  under  the  liability  of  a  warehouseman,  and  not  of  a 
carrier.^     So  he  must  keep  them  for  the  owner,  if  he  has  good 

1  Stokes  V.  Saltonstall,  13  Pet.  181;  McKinney  v.  Neil,  1  McLean,  550;  Peck  v. 
Neil,  3  McLean,  24 ;  McElroy  v.  N.  and  L.  R.  K.  Co.  4  Cusb.  400. 

2  See  Lewis  v.  The  Western  Eailsoad  Corp.  11  Met.  509  ;  Eao;le  v.  White,  6  Whart. 
505;  Thomas  v.  The  B.  and  P.  Raihoad  Corp.  10  Met.  472;  Strong  v.  Natally,  4  B. 
&P.*16. 

"  See  Devcreux  v.  Barclay,  2  Barn.  &  Aid.  702  ;  Powell  v.  Myers,  26  Wend.  591. 
1*  Thus,  in  Gibson  v.  Culver,  17  Wend.  305,  it  was  held  that  a  common  carrier  re- 
mains liable  until  the  actual  delivery  of  the  goods  to  the  consignee,  or  if  the  coui'se  of 
business  be  such  that  delivery  is  not  made  to  the  consignee,  his  liability,  in  the  absence 
of  usage,  continues  until  notice  of  the  arrival  of  the  goods  be  given.  And  see  McHenry 
V.  Railway  Co.  4  Harring.  448 ;  Eagle  v.  White,  6  Whart.  505  ;  Fisk  v.  Newton,  I 
Denio,  45 ;  Wardell  v.  Mourillyan,  2  Esp.  693  ;  Hyde  v.  Trent  and  Mersey  Navigation,  • 
5  T.  R.  389. 

5  Favor  v.  Philbrick,  5  N.  H.  358 ;  Wallace  v.  Vigus,  4  Blackf.  260. 

«  See  Golden  v.  Manning,  3  Wils.  429;  Storr  v.  Crowley,  MeL.  &  Y.  129  ;  Wardell 
V.  Mourillyan,  2  Esp.  693. 

■^  See  ante,  note  4.  In  Lewis  v.  The  Western  R.  R.  Co.  11  Met.  509,  it  was  held, 
that  if  A,  for  whom  goods  are  transported  by  a  railroad  company,  authorizes  B  to 
accept  the  delivery  thereof  and  to  do  all  acts  incident  to  the  transportation  and  delivery 
thereof  to  A,  and  B,  instead  of  receiving  the  goods  at  the  usual  place  of  delivery,  re- 
quests the  agent  of  the  company  to  permit  the  car  which  contains  the  goods  to  be 
hauled  to  a  near  depot  of  another  railroad  company,  and  such  agent  assents  thereto, 
and  assists  B  in  hauling  the  car  to  such  depot,  and  B  then  requests  and  obtains  leave 
of  that  company  to  use  its  raachinerj^  to  remove  the  goods  from  the  car,  then  the  com- 
pany that  transported  the  goods  is  not  answerable  for  the  want  of  care  and  skill  in  the 
persons  employed  in  so  removing  the  goods  from  the  car,  nor  for  the  want  of  strength 
in  the  machinery  used  for  the  removal  of  them,  and  cannot  be  charged  for  any  loss  that 
may  happen  in  the  course  of  such  delivery  to  A. 

8  Thus,  in  Fisk  v.  Newton,  1  Denio,  45,  where  the  consignee  of  certain  kegs  of  but- 
ter, sent  from  Albany  to  New  York  by  a  freight  barge,  was  a  clerk,  having  no  place  of 
business  of  his  own,  and  whose  name  was  not  in  the  city  directory,  and  who  was  not 
known  to  the  carrier,  and  after  reasonable  inquiries  by  the  carrier's  agent  could  not  be 
found,  it  was  held  that  the  carrier  discharged  himself  from  further  responsibility  by 
depositing  the  property  witfi  a  storehouse  keeper,  then  in  good  cx-edit  for  the  owner, 
and  taking  his  receipt  for  the  same,  according  to  the  usual  course  of  business  in  the 
trade,  though  the  butter  was  subsequently  sold  by  the  storehouse  keeper,  and  the  pro- 
ceeds lost  to  the  owner  by  failure.  And  Jtirett,  J.,  said :  "  When  goods  are  safely  con- 
veyed  to  the  place  of  destination,  and  the  consignee  is  dead,  absent,  or  refuses  to 


208  ELEMENTS    OF   MERCANTILE    LAW.  [CII.  XII. 

reason  to  believe  that  the  consignee  is  dishonest  and  will  defraud 
the  owner  of  his  property.'  As  to  the  time,  it  must  be  within 
the  proper  hours  for  business,  when  the  goods  can  be  suitably 
stored  ;2  or  if  to  the  sender  himself,  or  at  his  house,  then  at  some 
suitable  and  convenient  hour;^  and  without  unnecessary  delay ,* 
or  as  soon  after  a  detention  as  may  be  with  due  diligence.^  As 
to  the  time  he  is  no  insurer,  but  is  liable  only  for  default.^  As 
to  the  way  and  the  place  at  which  the  goods  should  be  delivered, 
much  must  depend  upon  the  nature  of  the  goods,  and  much  also 

receive,  or  is  not  known,  and  cannot,  after  due  efforts  are  made,  be  found,  the  carrier 
may  discharge  liimself  from  further  responsibility  by  placing  the  goods  in  store  with 
some  responsible  third  person  in  that  business,  at  the  place  of  delivery,  for  and  on  ac- 
count of  the  owner.  When  so  delivered,  the  storehouse  keeper  becomes  the  bailee  and 
agent  of  the  owner  in  respect  to  such  goods."  And  see  Ostrander  v.  Brown,  15  Johns. 
39 ;  Hemphill  v.  Chenie,  6  W.  &  S.  62  ;  Stone  v.  Waitt,  31  Maine,  409. 

1  See  Dutf  u.  Budd,  3  Br.  &  Bing.  177  ;  Stephenson  v.  Hart,  4  Bing.  476. 

^  Eagle  V.  White,  6  Whart.  505.  In  this  case  the  defendants,  who  were  common 
carriers  on  the  railroad  from  Philadelphia  to  Columbia,  undertook^to  carry  certain 
boxes  of  goods  belonging  to  thC  plaintiff,  from  Philadelphia  to  Columbia.  The  cars 
arrived  at  the  latter  place  about  sunset  on  a  Saturday  evening,  and,  by  direction  of  the 
plaintiffs,  were  placed  on  a  sideling,  the  plaintifl"^  declined  receiving  the  goods  that 
evening,  on  the  ground  that  it  was  too  late  ;  wherefore  the  agent  of  the  defendants  left 
the  cars  on  the  sideling,  taking  with  him  the  keys  of  the  padlocks  with  which  tht?cars 
were  fastened,  and  promised  to  return  on  Monday  morning.  The  cars  remained  in  this 
situation  until  Monday  morning,  when  they  were  opened  by  the  plaintiffs,  by  means  qf 
a  key  which  fitted  the  lock;  and,  on  examination,  it  was  discovered  that  one  of  the 
boxes  had  been  opened,  and  the  contents  carried  away.  Held,  that  the  defendants  were 
liable  to  the  plaintiffs  for  the  value  of  the  goods  lost.     (Huston,  J.,  dissenting.) 

3  Hill  V.  Humphreys,  5  W.  &  S.  123.  In  Merwin  v.  Butler,  17  Conn.  138,  where  the 
.defendant,  who  was  a  common  carrier,  received  from  the  plaintiff  a  package  of  money, 
to  convey  it  from  S.  to  P.,  and  deliver  it  at  the  bank  in  P.,  it  appeared  that  when  the 
defendant  arrived  at  P.,  the  bank  was  shut ;  that  he  went  twice  to  the  house  of  the 
cashier,  and  not  finding  him  at  home,  brought  the  money  back,  and  offered  it  to  the 
plaintiff,  who  declined  to  accept  it,  and  that  the  defendant  then  refused  to  be  further 
responsible  for  any  loss  or  accident ;  it  was  held  that,  in  the  absence  of  any  special  con- 
tract, (none  being  proved  in  this  case,)  these  facts  did  not  constitute  a  legal  excuse  to 
the  defendant  for  the  non-performance  of  his  undertaking.     And  see  Young  v.  Smith, 

3  Dana,  91  ;  Storr  v.  Crowley,  McL.  &  Y.  129. 

*  Thus,  in  Raphael  v.  Pickford,  6  Scott,  N.  R.  478,  it  appeared  that  a  parcel  had 
been  delivered  to  the  defendants  in  London,  on  the  8th  of  August,  addressed  to  the 
plaintiff,  at  Birmingham,  where  it  ought  to  have  arrived  on  the  10th,  but  did  not  arrive 
until  the  3d  or  4th  of  September.  It  was  held,  upon  this  evidence,  that  the  plaintiff 
was  entitled  to  recover  —  the  duty  to  deliver  within  a  reasonable  time  being  a  term 
ingrafted  by  legal  implication  upon  a  ]jromise  or  duty  to  deliver  generally.  And  see 
Boyle  V.  M'Laughlin,  4  H.  &  J.  291 ;  Erskine  v.  Thames,  6  Mis.  371 ;  Hand  v.  Baynes, 

4  Whart.  204. 

°  Sec  Hadley  v.  Clarke,  8  T.  R.  259,  where  the  defendants  contracted  to  carry  the 
plaintiff's  goods  from  Liverpool  to  Leghorn,  and  on  the  vessel's  arriving  at  Falmouth, 
in  the  course  of  her  voyage,  an  embargo  was  laid  on  her  "  until  the  further  order  of 
council ;"  it  was  held  that  such  embargo  only  suspended,  but  did  not  dissolve,  the  con- 
tract between  the  parties  ;  and  that  even  after  two  years,  when  the  embargo  was  taken 
off,  the  defendants  were  answerable  to  the  plaintiff  in  damages  for  the  non-performance 
of  their  contract.     And  see  Lowe  v.  Moss,  12  III.  477 ;  Parsons  v.  Hardj',  14  Wend.  215. 

6  See  Parsons  v.  Hardy,  supra ;  Dows  v.  Cobb,  12  Barb.  310 ;  Boyle  v.  M'Laughlin, 
4  H.  &  J.  291  ;  Hadley  v.  Clarke,  8  T.  R.  259.  But  see,  contra,  Harrcll  v.  Owens,  1  Dev. 
&  Bat.  273. 


en.  XII.]  OF  THE  CARRIAGE  OF  GOODS.  209 

upon  the  usage  in  regard  to  them,  if  such  usage  exists.'  They 
should  be  so  left  and  with  such  notice  as  to  secure  the  early, 
convenient,  and  safe  reception  of  them  by  the  person  entitled  to 
have  them.  Something  also  must  depend,  on  this  point,  on  the 
mode  of  conveyance.  A  man  may  carry  a  parcel  into  the  house, 
and  deliver  it  to  the  owner  or  his  servant;  a  wagon  or  cart  can 
go  to  the  gate,  or  into  the  yard,  and  there  deliver  what  it  carries. 
A  vessel  can  go  to  one  wharf  or  another;  and  is  bound  to  go  to 
tha^  which  is  reasonably  convenient  to  the  consignee,  or  to  one 
that  was  agreed  upon ;  but  it  is  said  he  is  not  bound  to  comply 
with  requirements  of  the  consignee  as  to  the  very  wharf  the 
goods  should  be  left  at.^  Where  not  delivered  to  the  owner  per- 
sonally or  to  his  agent,  immediate  notice  should  be  given  to  the 
owner.^     In   fact  it  may  be  said  the  carrier  cannot  be  made 

1  Farmers'  and  Mechanics'  Bank  v.  Champlain  Transportation  Co.  16  Vt.  52,  18  id. 
131,  23  id.  186,  a  strong  case  upon  this  point.  The  defendants  were  common  carriers 
on  Ijake  Champlain,  from  Burlington  to  St.  Albans,  touching  at  Port  Kent  and  riatts- 
burgh,  long  enough  to  receive  and  discharge  freight  and  passengers.  JThis  action  was 
brought  against  them  to  recover  for  the  loss  of  a  package  of  bank-bills.  It  appeared  in 
evidence  that  the  package  in  question,  which  was  directed  to  "  Richard  Yates,  Esq., 
Cashier,  riattsburgh,  N.  Y.,"  was  delivered  by  the  teller  of  the  plaintiffs'  bank  to  the 
captain  of  the-  defendants'  boat,  which  ran  daily  from  Burlington  to  Plattsburgh,  and 
thence  to  St.  Albans,  and  that,  when  the  boat  arrived  at  Plattsburgh,  the  captain  (leliv- 
ered  the  package  to  one  Ladd,  a  wharfinger,  and  that  it  was  lost  or  stolen  while  in 
Ladd's  possession.  No  notice  was  given  by  the  captain  of  the  boat  to  the  consignee  of 
the  arrival  of  the  package,  nor  had  he  any  knowledge  of  it  until  after  it  was  lost.  The 
principal  question  in  the  case  was,  whether  the  package  was  sufficiently  delivered  to 
discharge  the  defendants  from  their  liability  as  carriers.  The  defendants  offered  evi- 
dence to  show  that  a  delivery  to  the  wharfinger,  without  notice,  under  the  circumstances 
of  the  case,  was  a  good  delivery  according  to  their  uniform  usage,  and  the  usage  of 
other  carriers  similarly  situated.  The  case  was  before  the  Supreme  Court  of  Vermont 
three  times,  and  that'court,  upon  each  occasion,  held  that,  in  the  absence  of  any  special 
contract,  a  delivery  to  tlie  wharfinger  without  notice,  if  warranted  by  the  usage  of  the 
place,  was  sufficient,  and  discharged  the  defendant  from  all  liability.  And  see,  also, 
Gibson  17.  Culver,  17  Wend.  305. 

^  See  Chickering  v.  Fowler,  4  Pick.  371. 

3  In  Kohn  v.  Packard,  3  Louis.  224,  Porter,  J.,  laid  down  the  rule  upon  this  subject 
thus:  "We  have  the  high  authority  of  Chancellor  Kent  for  saying  that  the  better  opin- 
ion is,  there  must  be  a  delivery  on  the  wharf  to  some  person  authorized  to  receive  the 
goods,  or  some  act  which  is  equivalent  to  or  a  substitute  for  it.  The  contrary  doctrine 
appears  to  us  too  repugnant  to  reason  and  justice  to  be  sanctioned  by  any  one  who  will 
follow  it  out  to  the  consequences  to  which  it  inevitably  leads.  Persons  to  whom  goods 
are  sent,  may  be  absent  from  the  port  when  the  ship  reaches  it;  they  may  be  disaliled 
by  sickness  from  attending  to  their  business;  they  may  not  be  informed  of  the  arrival 
of  the  vessel.  Under  such  circumstances,  or  many  others  similar  that  may  be  supposed, 
it  would  be  extraordinary,  indeed,  if  the  captain  were  authorized  to  throw  the  goods  on 
shore,  where  they  could  not  fail  to  be  exposed  to  injury  from  tiie  weather,  and  would 
be  liable  to  be  stolen.  There  would  be  little  difference  in  such  an  act  and  any  otiier 
that  would  occasion  their  loss.  Contracts  impose  on  parties  not  merely  the  ol>ligations 
expressed  in  them,  but  every  thing  which  by  law,  equity,  and  custom  is  considered  as 
incidental  to  the  particular  contract,  or  necessary  to  carry  it  into  effect.  La.  Code, 
1987.  Delivery  is  not  merely  an  incident  to  the  contract  of  affreightment,  it  is  essen- 
tial to  its  discharge,  and  as  there  cannot  be  a  delivery  without  the  act  of  two  parties,  it 

18* 


210  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XII. 

responsible,  without  a  notice  of  delivery  to  him,  unless  the  deliv- 
ery is  itself  a  notice,  and  so  he  cannot  make  adequate  delivery 
without  similar  notice.  But  if  the  carrier  has  pointed  out  a 
place  or  way  of  delivery  to  himself,  as  at  his  station  or  in  his 
box,  he  must  take  notice;'  and  if  the  owner  has  in  any  way 
designated  how  the  goods  may  be  delivered  to  himself,  he  is 
bound  by  it.  The  notice  must  be  prompt,  and  distinct.  And  if 
the  goods  are  delivered  at  an  unsuitable  or  unauthorized  place, 
no  notice  will  make  this  a  good  delivery .^ 

Railroads  terminate  at  their  station,  and  although  goods  might 
be  sent  by  wagons  to  the  house  or  store  of  consignees,  this  is 
not  usually  dOne,  as  it  is  considered  that  the  railroad  carrier  has 
finished  his  transit  at  his  own  terminus.  Usually,  the  consignee 
of  goods  sent  by  railroad  has  notice  from  the  consignor  when  to 
expect  them;  and  this  is  so  common  that  it  is  seldom  necessary, 
in  fact,  for  the  agents  of  the  railroad  to  give  notice  to  the  con- 
signee. But  this  should,  we  think,  be  given  where  it  is  neces- 
sary;  and  sJiould  be  given  as  promptly,  directly,  and  specifically 
as  may  be  necessary  for  the  purpose  of  the  notice.  The  law  on 
this  point,  however,  is  not  yet  settled ;  nor  will  it  be  until  it  is 
determined  by  statute,  by  further  adjudication,  or  by  established 
and  general  usage.^ 

is  indispensable  the  freighter  should  be  apprised  when  and  where  the  ship-owner,  or 
his  agent,  is  ready  to  hand  over  the  goods."  See  also  Chickering  v.  Fowler,  supra ; 
House  V.  The  Schooner  Lexington,  2  N.  Y.  Legal  Observer,  4 ;  Price  v.  Powell,  3 
Corast.  322. 

'  See  Merriam  v.  The  Hartford,  &c.,  Eailroad  Co.  20  Conn.  354. 

2  See  Gatliffe  v.  Bourne,  4  Bing.  N.  C.  34,  3  M.  &  Gr.  643,*7  id.  850 ;  Dixon  v. 
Dunham,  14  III.  324. 

^  Until  very  recently  there  were  no  express  decisions  upon  this  point ;  and  those 
that  we  now  have  are  not  harmonious  in  their  views.  Thus,  in  Michigan  Central  R.  E. 
Co.  V.  Ward,  2  Mich.  538,  it  was  held  that  common  carriers  by  railroad  are  excused 
froin  a  personal  delivery  of  goods  carried  by  them  ;  but  in  lieu  of  delivery,  are  required 
to  notify  the  consignee,  and  their  liability  as  carriers  continues  until  the  consignee  has 
had  reasonable  time  to  remove  the  property.  And  Johnson,  J.,  said  :  "  In  the  absence 
of  any  special  contract,  or  local  custom,  or  usage  of  particular  trades,  governing  or 
controlling  the  action  of  the  parties,  it  is  incumbent  upon  a  common  carrier,  by  the 
rules  of  the  common  law,  to  deliver  the  goods  intrusted  to  his  care,  to  the  consignee 
personally,  and,  until  sucli  delivery,  he  does  not  discharge  himselE  from  the  obligations 
and  duties  the  law  imposes  upon  him.  .  .  .  But  to  this  general  rule  there  will  be  fouud 
many  exceptions  —  it  is  competent  for  a  party  to  discharge  Jiimself  from  this  implied 
undertaking  by  a  special  contract,  or  by  showing  a  local  custom,  or  a  particular  usage, 
when  such  custom  or  usage  is  of  such  a  character  as  fairly  to  raise  the  presumption 
that  both  of  the  contracting  parties  acted  in  reference  to  it.  With  great  force  and 
reason  the  law  implies  an  exception  to  another  large  class  of  common  carriers,  includ- 
ing all  those  whose  mode  of  transportation  is  such  as  to  render  it  impracticable  to 
comply  with  this  rule ;  it  embraces  all  carriers  by  ships  and  boats,  and  cars  iipon  rail- 
roads. These  must  necessarily  stop  at  the  wharves  and  depots  of  their  respective  routes, 
and,  consequently,  personal  delivery  would  be  attended  with  great  inconvenience,  and 


CU.  XII.]  OF  THE  CARRIAGE  OF  GOODS.  211 

It  may  happen  that  some  third"  party  may  claim  the  goods 
under  a  title  adverse  to  that  of  the  consignor  or  consignee.  If 
the  carrier  refuse  to  deliver  them  to  this  third  party,  and  it  turns 
out  that  this  claimant  had  a  legal  right  to  demand  them,  the 
carrier  would  be  liable  in  damages  to  him.'  But  the  carrier  may 
and  should  demand  full  and  clear  evidence  of  the  claimant's 
title ;  and  if  the  evidence  be  not  satisfactory,  he  may  demand 
security  and  indemnity.  If  the  evidence  or  the  indemnity  be 
witjiheld,  he  certainly  should  not  be  held  answerable  for  any 
thing  beyond  that  amount  which  the  goods  themselves  would 
satisfy,  for  he  is  in  no  fault.  If  he  delivers  the  goods  to  such 
claimant,  proof  that  the  claimant  had  good  title,  is  an  adequate 
defence  against  any  suit  by  the  consignor  or  consignee  for  non- 
delive.ry.2 

therefore  the  law  has  dispensed  with  it.  But  in  lieu  of  personal  delivery,  which  is  dis- 
pensed with  in  the  hist  class  of  cases  mentioned,  the  law  requires  a  notice,  and  nothing 
will  dispense  with  that  notice.  Price  v.  Powell,  3  Comst.  ■822.  ...  It  is  useless  to  mul- 
tiply authorities  upon  this  point.  There  cannot  be  found,  it  is  believed,  a  single  case 
in  the  books  to  the  contrary.  Tlie  rule,  then,  seems  to  be  this,  that  in  all  cases  car- 
riers by  ships,  and  boats,  and  cars,  who  are  exempt  from  the  general  doctrine  of  per- 
sonal delivery,  must  in  lieu  thereof  give  notice  to  the  consignee,  and  they  are  not  dis- 
charged from  their  responsibility  as  such,  until  notice  be  given,  and  the  consignee  have 
a  reasonable  time  to  receive  and  remove  his  goods."  Story  on  Bail.  §  544.  But  in  the 
case  of  Norway  Plains  Co.  v.  B.  and  M.  R.  II.  I  Gray,  263,  it  was  held  that  the  pro- 
prietors of  a  railroad,  who  transport  goods  over  their  road  for  hire,  and  deposit  them 
in  their  warehouse  without  additional  charge,  until  the  owner  or  consignee  has  a 
reasonable  time  to  take  them  away,  are  not  liable  as  common  carriers  for  the  loss  of 
the  goods  bj'  fire,  without,  negligence  or  default  on  their  part,  after  the  goods  are  un- 
laden from  the  cars  and  placed  in  the  warehouse;  but  are  liable  as  warehousemen,  only 
for  want  of  ordinary  care;  although  the  owner  or  consignee  has  no  opportunity  to  take 
the  goods  away  before  the  iire.  And  semhle,  that  the  proprietors  of  a  railroad  are  not 
obliged  to  give  notice  to  the  consignees  of  the  arrival  of  goods,  transported  by  them,  in 
order  to  exonerate  themselves  from  their  liability  as  common  carriers.  And  see 
Thomas  v.  B.  and  P.  R.  R.  Co.  10  Met.  472;  Richards  v.  The  London,  &c..  Railway, 
7  C.  B.  8-39;  Farmers'  and  Mechanics"  Bank  v.  Champlain  Transportation  Co.  16  Vt. 
52,  18  id.  131,  23  id.  186. 

1  Thus,  in  Wilson  v.  Anderton,  1  B.  &  Adol.  450,  the  captain  of  a  ship,  who  had 
taken  goods  on  freight  and  claimed  to  have  a  lieti  upon  them,  delivered  them  to  a  bailee. 
The  real  owner  demanded  them  of  the  latter,  but  he  refused  to  deliver  them,  without 
the  directions  of  the  bailor.  Held,  that  the  bailor  not  having  any  lien  upon  the  goods, 
the  refusal  by  the»bailee  was  sufficient  evidence  of  a  conversion.  And  Lord  Tenterden 
said  :  "  A  bailee  can  never  be  in  a  better  situation  than  the  bailor.  If  the  bailor  has 
no  title,  the  bailee  can  have  none,  or  the  bailor  can  give  no  better  title  than  he  has. 
The  right  to  the  property  may,  therefore,  be  tried  in  an  action  against  the  bailee,  and 
a  refusal  like  that  stated  in  thi^^se  has  always. been  considered  evidence  of  a  conver- 
sion. The  situation  of  a  bail^B  not  one  without  remedy.  He  is  notJbound  to  ascer- 
tain who  has  the  right.  He  may  tile  a  bill  of  interpleader  in  a  court  of  equity.  But  a 
bailee  who  forbears  to  adopt  that  mode  of  proceeding,  and  makes  himself  a  party  by 
retaining  the  goods  for  the  bailor,  must  stand  or  fall  by  his  title." 

^  King  V.  Richards,  6  Whart.  418.  The  defendants  in  this  case  were  common  carriers 
of  goods  between  New  York  and  Philadelphia,  and  had  signed  a  receipt  for  certain  goods 
as  received  of  A,  which  they  promised  to  deliver  to  his  order.  In  trover  by  the  indorsers 
of  this  paper,  who  had  made  advances  on  the  goods,  it  was  held  that  the  defendants 
might  prove  that  A  had  no  title  to  the  goods    that  they  had  been  fraudulently  obtained 


212  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XII. 

SECTION  IV. 

OF    THE    LIEN    OP    THE    COMMON    CARRIER. 

By  "lien,"  which  is  a  Norman-French  word  frequently  used  in 
law,  is  meant  a  bond  or  something  which  fastens  one  thing  to 
another.  The  legal  meaning  of  this  word,  which  wc  have  had 
occasion  to  use  in  joreceding  chapters,  is  the  right  of  holding  or 
detaining  property  until  some  charge  against  it,  or  some  claim 
upon  the  owner,  on  account  of  it,  is  satisfied. 

The  common  carrier  has  this  right  against  all  the  goods  he 
carries,  for  his  compensation.^  While  he  holds  them  for  this 
purpose,  he  is  not  liable  for  loss  or  injury  to  them  as  a  common 
carrier;  that  is,  not  unless  for  his  own  default. 

He  may  not  only  hold  the  goods  for  his  compensation,  but 
may  recover  this  out  of  them,  by  any  of  the  usual  means  in  which 
a  lien  upon  personal  chattels  is  made  productive.^ 

If  a  carrier  carries  goods  for  and  at  the  request  of  a  party  who 
does  not  own  them,  and  at  the  end  of  the  transit  the  true  owner 
discovers  or  interposes  and  claims  them,  the  carrier  might  recover 
his  fare  if  he  had  rendered  a  certain  service  or  benefit  to  the 
owner  by  conveying  the  goods,  which  service  or  benefit  the 
owner  accepted  by  there  receiving  the  goods.  But  it  would  be 
a  personal  claim  only  for  which  he  w^ould  have  no  lien.  This 
at  least,  is  the  conclusion  to  which  we  think  the  common  prin- 
ciples of  the  law  of  bailment  would  lead.^ 

by  him  from  the  true  owner:   and  that,  upon  demand,  they  had  delivered  them  up  to 
the  latter.     And  in  Bates  v.  Stanton,  1  Duer,  79,  the  same  doctrine  was  held. 

1  This  was  hald  as  early  as  Skinner  v.  Upsliaw,  2  Ld.  Raym.  752,  and  has  been 
followed  ever  since.  For  the  American  cases  recognizing  this  doctrine,  see  Hayward 
V.  Middleton,  1  So.  Car.  Const.  Reps.  186;  Ellis  y."  James,  5  Ohio,  88;  Hunt  v.  Has- 
kell, 24  Maine,  339;  Bowman  v.  Hilton,  11  Ohio,  303.  • 

2  Fox  V.  McGregor,  11  Barb.  41  ;  Hunt  v.  Haskell,  24  Maine,  339.  If  the  carrier 
once  voliintiirily  part  with  the  possession  of  the  goods,  he  loses  his  lien  upon  them,  and 
is  not  antiioriz?d  by  law  to  reclaim  them.  Sec  i^ortii  v.  Simpson,  13  Q.  B-  680;  Bailey 
V.  Quint,  22  Vt.  474;  Bigelow  i\  Heatpn,  6  Hill,  43^^Denio,  496.  But  if  the  con- 
signee induce  ihe  carrier  to  part  with  the  possessior^^Khe  goods  by  false  and  fraudu- 
lent representations,  such  delivery  will  not  amount  tc^^'aiver  of  the  lien.  Bigelow  v. 
Heaton,  supra.  So  a  lien  may  be  created  and  retained  after  delivery,  by  agreement  of 
the  panics.     Sawyer  v.  Fisher,  32  Maine,  28. 

^  In  Yorke  v.  Grenaugh,  2  Ld.  Raym.  8G6,  (approved  in  King  v.  Richards,  6  Whart. 
423.)  a  carrier's  lien,  under  somewhat  similar  circumstances,  was  maintained.  In  Fitch 
V.  Newberry,  1  Doug.  (Mich.)  I,  it  is  denied.  So  it  is  in  Van  Buskirk  v.  Parinton,  2 
Hall,  .561.  And  in  Robinson  v.  Baker,  5  Cush.  137.  See  also  CoUman  v.  Collins,  2 
Hall,  569. 


en.  XII.]  OF   THE   CARRIAGE   OF  GOODS.  213 

SECTION  V. 

OP   THE   LIABILITY   OF   THE   COMMON   CARRIER. 

This  is  perfecUy  well  established  as  a  rule  of  law,  although  it 
is  very  excejitional  and  peculiar.  It  is  sometimes  said  to  arise 
from  the  public  carrier  being  a  kind  of  public  officer.  But  the 
true  reason  is  the  confidence  which  is  necessarily  reposed  in  him, 
the  power  he  has  over  the  goods  intrusted  to  him,  the  ease  with 
which  he  may  defraud  the  owner  of  them,  and  yet  make  it  ap- 
pear that  he  was  not  in  fault,  and  the  difficulty  which  the  owner 
might  find  in  making  out  proof  of  his  default.  This  reason  it  is 
important  to  remember,  because  it  helps  us  to  construe  and  apply 
the  rules  of  law  on  this  subject.  Thus,  the  rule  is  that  the  com- 
mon carrier  is  liable  for  any  loss  or  injury  to  goods  under  his 
charge,  unless  it  be  caused  by  the  act  of  God,  or  by  the  public 
enemy .^  And  this  phrase,  "  the  act  of  God,"  has  been  said  to 
mean  the  same  thing  as  "inevitable  (or  unavoidable)  accident."^ 
But  this  is  a  mistake.  The  rule  is  intended  to  hold  the  common 
carrier  responsible  wherever  it  was  possible  that  he  caused  the 
loss  either  by  negligence  or  design.  Hence,  the  act  of  God 
means  some  act  in  which  neither  the  carrier  himself,  nor  any 
other  man,  had  any  direct  and  immediate  agency.^  If,  for 
example,  a  house  in  which  the  goods  are  at  night,  is  struck  with 
lightning,  or  blown  over  by  a  tempest,  or  washed  away  by  inun- 
dation,.the  carrier  is  not  liable.  This  is  an  act  of  God,  although 
man's  agency  interferes  in  causing  the  loss,  for  without  that 
agency,  the  goods  would  not  have  been  there.  But  no  man 
could  have  directly  caused  the  loss.  On  the  other  hand,  if  the 
building  was  set  on  fire  by  an  incendiary  at  midnight,  and  the 


1  This  has  been  the  rule  of  the  common  law  for  ages.  See  Woodlefe  v.  Cuvties,  1 
Eol.  Abr.  2,  Co.  Litt.  89,  a;  S.  C.  nom.  Woodlife's  case,  Moore,  462;  Lord  Holt,  in 
Copers  i\  Bernard,  2  Ld.  Raym.909.  See  also  Proprietors  of  Trent  Navigation  v. 
Wood,  3  Esp.  1 27,  4  Doug.  290 ;  Forward  r.  Prittard,  1  T.  R..27  ;  Chevallier  v.  Straham, 
2  Texas,  1 1.5  ;  Mershon  v.  Hobensack,  2  N.  J.  372  ;  Eriend  'v.  Woods,  6  Grattan,  189. 

2  See  Walpole  v.  Bridges,  5  Blackf.  222 ;  Fish  v.  Chapman,  2  Geo.  349  ;  Neal  v. 
Saunderson,  2  Sm.  &  M.  572. 

2  Lord  Mansfield,  in  Proprietors  of  Trent  and  Mersey  Navigation  Co.  v.  Wood,  3 
Esp.  131,  4  Doug. 290,  says:  "The  act  of  God  is  natural  necessity,  as  winds  and  storms, 
which  arise  from  natural  causes,  and  is  distinct  from  inevitable  accident."  And  see 
McArthur  v.  Sears,  21  Wend.  190 ;  Jeremy  on  Carriage,  57. 


214  ELEMENTS    OF   MERCANTILE    LAW.  [cil.  XIT. 

rapid  spread  of  the  flames  made  it  absolutely  impossible  to  rescue 
the  goods,  this  might  be  an  inevitable  accident  if  the  carrier  were 
wholly  innocent,  but  it  would  also  be  possible  that  the  incendiary 
was  in  collusion  with  the  carrier  for  the  purpose  of  concealing 
his  theft;  and,  therefore,  the  carrier  would  be  liable  without 
shjowing  that  this  was  the  case.  As  a  general  rule,  the  common 
carrier  is  always  liable  for  loss  by  fire,  unless  it  be  caused  by 
lightning;'  and  this  rule  has  been  applied  to  steamboats.^  So, 
it  may  be  true  that  after  the  lightning,  the  tempest,  or  inunda- 
tion, the  carrier  was  negligent,  and  so  lost  the  goods  which  might 
have  been  saved  by  proper  efforts,  or  that  he  took  the  opportunity 
to  steal  them.  If  this  could  be  shown,  the  carrier  would,  of 
course,  be  liable ;  but  the  law  will  not  presume  this,  if  the  first 
and  main  cause  were  such  that  the  carrier  could  not  have  been 
guilty  in  respect  to  it.  So,  a  common  carrier  would  be  liable  for 
a  loss  caused  by  a  robbery,  however  sudden,  unexpected,  and  in- 
resistible,  or  by  a  theft,  however  wise  and  full  his  precautions, 
and  however  subtle  and  ingenious  the  theft,^  although  either  of 
these  might  §eem  to  be  "inevitable;"  that  is,  unavoidable  by 
any  means  of  safety  which  "it  would  be  at  all  reasonable  to 
require.* 

1  Thus,  in  Forward  v.  Prittard,  1  T.  E.  27,  the  plaintiff's  goods,  while  in  the  pos- 
session- of  tlic  defendant  as  a  common  carrier,  were  consumed  by  fire.  It  was  found 
that  the  accident  happened  witliout  any  actual  negfigence  in  the  defendant,  but  that  the 
fire  was  not  occasioned  by  lightning.  Under  these  circumstances,  the  Court  of  King's 
Bench  held  the  defendant  liable.  And  Lord  Mansfield  said :  "A  carrier  is  in  the  nature 
of  an  insurer.  It  is  laid  down  that  he  is  liable  for  every  accident,  except  by  the  act  of 
God  or  the  king's  enemy.  Now,  what  is  the  act  of  God  1  I  consider  it  to  mean  some- 
thing in  opposition  to  the  act  of  man;  for  every  thing  is  the  act  of  God  tha^  happens 
by  his  permission  ;  every  thing  by  his  knowledge.  But  to  prevent  litigation,  collusion, 
and  the  necessity  of  going  into  circumstances  impossible  to  be  unravelled,  the  law  pre- 
sumes against  the  carrier,  unless  he  shows  it  was  done  by  the  king's  enemies,  or  by 
such  act  as  could  not  happen  by  the  intervention  of  man,  as  storms,  lightning,  and 
tempests.  If  an  armed  force  come  to  rob  tlie  carrier  of  the  goods,  he  is  liable;  and  a 
reason  is  given  in  the  books,  which  is  a  bad  one,  namely,  that  he  ought  to  have  a  suffi- 

.cient  force  to  repel  it;  but  that  would  be  impossible  in  some  cases,  as,  for  instance,  in 
the  riots  in  the  year  1780.  The  true  reason  is  for  fear  it  may  give  room  for  collusion, 
that  the  master  may  contrive  to  be  robbed  on  purpose,  and  share  the  spoil.  In  this 
case  it  does  not  appear  but  that  the  fire  arose  from  some  act  of  man  or  other.  It  cer- 
tainly did  arise  from  some  act  of  man  ;  for  it  is  expressly  stated  not  to  have  happened 
by  lightning.  The  carrier,  therefore,  in  this  case  is  liable,  inasmuch  as  he  is  liable  for 
inevitable  accident."  And  see  Thorogood  w.  Marsh,  Gow,  105  ;  Parker  v.  Flagg,  26 
Maine,  181 ;  Hale  v.  N.  J.  Steam  Navigation  Co.  1.5  Conn.  539 ;  Chevallier  v.  Straham, 
2  Texas,  115;  Parsons  v.  Monteath,  13  Barb.  353. 

2  See  Gilmore  v.  Carman,  1  S.  &  M.  279. 

3  See  Coggs  v.  Barnard,  2  Ld.  Raym.  909 ;  Forward  v.  Pittartl,  1  T.  R.  27. 

*  See,  in  addition  to  the  cases  alreadv  cited,  Ewart.?;.  Street,  2  Bailey,  157 ;  Fish  v. 
Chapman,  2  Geo.  349;  McArthur  v.  "Sears,  21  Wend.  190;  Backhouse  w.  Srtccd,  1 
Murphy,  173.    The  act  of  God,  in  order  to  excuse  the  common  carrier  for  the  loss, 


CU.  XII.]  OF   THE   CARRIAGE   OF    GOODS.  215 

The  act  of  God  may  be  negative  merely,  as  if  a  vessel  be 
wrecked  from  a  failure  of  wind.^  So  it  includes  whatever  loss 
springs  from  the  inherent  nature  of  the  thing;  as  its  fermentation 
or  decay ;  always  provided  the  carrier  took  all  reasonable  pre- 
cautions, in  respect  of  stowage,  exposure,  and  the  like,  to  prevent 
this.^  For  whatever  the  direct  and  principal  cause  of  injury  may 
be,  if  the  negligence  or  default  of  the  carrier  substantially  mingles 
with, it,  he  is  responsible.^ 

The  general  principles  of  agency  extend  to  common  carriers, 
and  make  them  liable  for  the  acts  of  their  agents,  done  while  in 
the  discharge  of  the  agency  or  employment.  So,  the  knowledge 
of  his  agent  is  his  own  knowledge,  if  the  agent  be  authorized. ex- 


must  be  the  immediate  and  not  the  remote  cause  of  the  loss.  Smith  v.  Shepherd,  Ab- 
bott on  Shipping,  385,  (5th  Am.  ed.)  This  was  an  action  brought  against  the  master 
of  a  vessel  navigating  the  River  Ouse  and  Humber  from  Selby  to  Hull,  by  a  person 
whose  goods  had  been  wet  and  spoiled.  At  the  trial  it  appeared  in  evidence  that  at  the 
entrance  of  the  harbor  at  Hull,  there  was  a  bank  on  which  vessels  used  to  lie  in  safety, 
but  of  which  a  part  had  been  swept  away  by  a  great  flood  some  short  time  before  the 
misfortune  in  question,  so  tliat  it  had  become  perfectly  steep,  instead  of  shelving 
towards  the  river  ;  that  a  few  daj's  after  this  flood  a  vessel  sunk  by  getting  on  this  bank, 
and  her  mast,  which  was  carried  away,  was  sufi'ered  to  float  in  the  river,  tied  to  some 
part  of  the  vessel  ;  and  the  defendant,  upon  sailing  into  the  harbor,  struck  against  the 
mast,  which,  not  giving  way,  forced  the  defendant's  vessel  towards  the  bank,  where  she 
struck,  and  would  have  remained  safe  had  the  bank  remained  in  its  former  situation ; 
but  on  the  tide  ebbing,  her  stern  sunk  into  the  water,  and  th?  goods  were  spoiled;  upon 
which  the  defendant  tendered  evidence  to  show  that  there  had  been  no  actual  negli- 
gence. Hcaili,  J.,  before  whom  the  case  was  tried,  rejected  the  evidence,  and  ruled  that 
the  act  of  God,  which  could  excuse  the  defendant,  must  be  immediate  ;  but  this  was 
too  remote;  and  directed  the  jury  to  find  a  verdict  for  the  plaintiff,  and  they  accord- 
ingly did  so.  The  case  was  afterwards  submitted  to  the  consideration  of  the  Court  of 
King's  Bench,  wlio  approved  of  the  direction  of  the  learned  judge  at  the  trial.  In 
Smyrl  v.  Niolon,  2  Bailey,  421,  it  was  held  that  a  loss  caused  by  a  boat's  running  on 
an  unknown  "snag"  in  the  usual  channel  of  the  river,  is  referable  to  the  act  of  God. 
And  see  Williams  v.  Grant,  1  Conn.  487;  Faulkner  v.  Wright,  Rice,  107.  But  in 
Friend  v.  Woods,  6  Gratt.  189,  it  was  held  that,  where  a  common  carrier  strands  his 
boat  upon  a  bar  recently  formed  in  the  channel  of  the  river,  of  the  existence  of  which 
he  was  previously  ignorant,  he  is  liable  for  the  damage  done  to  the  freight  on  board  his 
boat. 

1  Thus,  in  Colt  v.  M'Mechen,  6  Johns.  160,  where  a  vessel  was  beating  up  the  Hud- 
son against  a  light  and  variable  wind,  and  being  near  shore,  and  while  changing  her 
tack,  the  wind  suddenly  failed,  in  consequence  of  which  she  ran  aground  and  sunk,  it 
was  held  that  the  sudden  failure  of  the  wind  was  tlie  act  of  God,  and  excused  the 
master;  there  being  no  negligence  on  his  part.  And  Spencer,  J.,  said:  "The  case  of 
Amies  v.  Stevens,  1  Strange,  128,  shows  that  a  sudden  gust  of  wind,  by  which  the  hoy 
of  the  carrier,  shooting  a  bridge,  was  driven  against  a  pier  and  overset,  by  the  violence 
of  tlie  shock,  has  been  adjudged  to  be  the  act  of  God,  or  vis  divina.  The  sudden  gust 
in  the  case  of  the  boyman,  and  the  sudden  and  entire  failure  of  the  wind  sufhcient  to 
enable  the  vessel  to  beat,  are  equally  to  be  considered  tlie  acts  of  God.  He  caused  the 
gust  to  blow,  in  the  one  case ;  and  in  the  other  the  wind  was  stayed  by  him." 

2  See  Warden  v.  Greer,  6  Watts,  424  ;  Leech  'v.  Baldwin,  5"Watts,  446  ;  Clark  v. 
Barnwell,  12  How.  272  ;  Farrar  v.  Adams,  Bui.  N.  P.  69. 

^  See  Williams  v.  Branson,  1  Murph.  417;  Williams  v.  Grant,  1  Conn.  487;  Clark 
V.  Barnwell,  12  How.  272;  Campbell  v.  Morse,  Harper,  468.  And  see  Amies  v. 
Stevens,  1  Strange,  128. 


216  ELEMENTS   OP   MERCANTILE   LAW.  [CIL  XII. 

prcssly  or  by  the  nature  of  his  employment,  to  receiv.e  this  knowl- 
edge.i  But  an  agent  for  a  common  carrier  may  act  for  himself, — 
as  a  stage  coachman  in  carrying  parcels  for  which  he  is  paid 
personally,  and  does  not  account  with  his  employer, —  and  then 
the  employer  is  not  liable,^  unless  the  owner  of  the  goods  sup- 
posed the  stage  coachman  carried  the  goods  for  his  employer, 
and  was  justified  by  the  facts  and  apparent  circumstances  in  so 
believing.3 

A  carrier  may  be  liable  beyond  his  own  route.    It  is  very  com- 


1  In  Burrcll  v.  North,  2  Car.  &  Kir.  680,  in  an  action  against  a  carrier  for  the  loss  of 
a  parcel,  the  defendant  i)leadcd  that  it  was  not  delivered  to  him  to  be  carried  ;  it  was 
held  sufficient  for  the  plaintiff  to  show  that  it  was  delivered  to  a  person  and  at  a  house 
where  parcels  were  in  the  habit  of  being  left  for  this  carrier.  And  see  Davey  v.  Mason, 
1  Car.  &  M.  45  ;  D'Ai:jou  v.  Deagle,  3  H.  &  J.  206. 

2  See  Bean  v.  Sturtevant,  8  N.  H.  146.  In  Chouteau  v.  Steamboat  St.  Anthonj',  16 
Missouri,  216,  it  was  held  that,  in  order  to  make  the  owners  of  a  steamboat,  who  were 
common  carriers,  liable  for  the  act  of  the  captain  in  taking  money  for  transportation, 
it  must  be  shown  that  it  was  within  the  scope  of  the  usual  employment  and  service  of 
the  boat  for  the  captain  to  carry  packages  of  money  for  hire,  on  account  of  the  owners. 
If  the  captain  carries  them  on  his  own  account  and  responsibility,  the  owners  are 
not  liable.  And  see  King  i\  Lenox,  19  Johns.  235;  Butler  v.  Basing,  2  C  &  P.  613; 
Walter  v.  Brewer,  11  Mass.  99;  Allen  v.  Sewall,  2  Wend.  327;  Reynolds  v.  Toppan, 
15  Mass.  370;  Citizens'  Bank  v.  Nantucket  Steamboat  Co.  2  Stor}',  16. 

^  See  Bean  v.  Sturtevant,  ^lbi  supra.  This  subject  was  well  considered  in  Farmers' 
and  Mechanics'  Bank  v.  Champlain  Transportation  Co.  23  Vt.  186.  See  the  facts  of 
the  case'stated  ante,  p.  209'^n.  1.  One  of  the  points  made  was,  whether  or  not  the  de- 
fendants were  common  carriers  as  to  the  bank-bills  in  question.  Upon  this  point,  Eed- 
Jield,J.,  said:  "It  seems  to  us  that  when  a  natural  person,  or  a  corporation  whose 
powers  are  altogether  uilrestrictcd,  erect  a  steamboat,  appoint  a  captain,  and  other 
agents,  to  take  the  entire  control  of  their  boat,  and  thus  enter  upon  the  carrying  busi- 
ness, from  port  to  port,  they  do  constitute  the  captain  their  general  agent,  to  carry  all 
such  commodities  as  he  may  choose  to  contract  to  carry,  within  tlie  scope  of  the  powers 
of  the  owners  of  the  boat.  If  this  were  not  so,  it  would  form  a  wonderful  exception  to 
the  general  law  of  agency,  and  one  in  which  the  public  would  not  very  readily 
acquiesce.  There  is  hardly  any  business  in  the  country,  where  it  is  so  important  to 
maintain  the  authority  of  agents,  as  in  this  matter  of  carrying,  by  these  invisible  corpo- 
rations, who  ha.ve  no  local  habitation,  and  no  existence  or  power  of  action,  except 
through  these  same  agents,  by  whom  almost  tlie  entire  carrying  business  of  the  country 
is  now  conducted.  If,  then,  the  captains  of  these  boats  are  to  be  regarded  as  the  gen- 
eral agents  of  the  owners,  t— and  ^Ve  hardly  conceive  how  it  can  be  regarded  otherwise, 
whatever  commodities,  within  the  limits  of  the  powers  of  the  owners,  the  captains,  as 
their  genei'al  agents,  assume  to  carry  for  hire,  the  liability  of  the  owners  as  carriers  is 
thereby  fixed,  and  they  will  be  held  responsible  for  all  losses,  unless  from  the  course  of 
business  of  these  boats,  the  plaintiffs  did  know,  or  upon  reasonable  inquiry  might  have 
learned,  that  the  captains  were  trusted  with  no  such  authority.  Prima  facie  the  owners 
are  liable  for  all  contracts  for  carrying,  made  by  the  captains  or  other  general  agents 
for  that  purpose,  within  tlie  powers  of  the  owners  themselves,  and  the  07u(s  rests  upon 
them  to  show  that  the  plaintiff'  had  made  a  private  contract  with  the  captain,  which  it 
was  understood  should  be  kept  from  the  knowledge  of  the  defendants,  or  else  had  given 
credit  exclusively  to  the  captain.  But  it  does  not  appear  to  us  that  the  mere  fact  that 
the  captain  was,  by  the  company,  permitted  to  'take  tlie  perquisites  of  carrying  these 
parcels,  will  be  sufficient  to  exronerate  the  company  from  liability.  Their  suffering  him 
to  continue  to  carry  bank-bills  ought,  we  think,  to  be  regarded  as  fixing  their  responsi- 
bility, and  allowing  the  captain  to  take  the  perquisites,  as  an  arrangement  among  them- 
selves." And  see  Allen  v.  Sewall,  2  Wend.  327,  6  id.  335  ;  Hosea  v.  McCrory,  12 
Ala.  349. 


CH.  XII.]  OF  THE  CARRIAGE  OF  GOODS.  217 

mon  for  carriers  who  share  between  them  the  parts  of  a  long 
route,  to  unite  in  the  business  and  the  profits,  and  then  all  are 
liable  for  a  loss  on  any  part  of  the  route.^  If  they  are  not  so 
united  in  fact,  but  seem  to  be  so,  and  justify  a  sender  in  suppos- 
ing they  are  united,  they  are  equali}^  liable.-  But  if  a  carrier 
takes  goods  to  carry  as  far  as  he  goes,  and  then  engages  to  send 
them  forward  by  another  carrier,  he  is  liable  as  carrier  to  the  end 
of  his  own  route ;  he  is  liable  also  if  he  neglects  to  send  the 
goods  on  ;  but  he  is  not  liable  for  what  may  happen  to  them 
afterwards.^  Thus  far  the  law  is  quite  settled.  And  it  seems  to 
be  the  rule  in  England  that,  if  a  carrier  takes  goods  which  are 
marked  or  otherwise  designated  to  go  to  a  place  beyond  his  own 
route,  it  will  be  presumed  that  he  agrees  to  carry  them  thither, 
and  that  he  has  made  arrangements  for  that  purpose,  which 
affect  him  with  the  liability  of  a  carrier  through  the  whole  route,^ 

1  Thus,  where  an  association  was  formed  between  shippers,  on  Lake  Ontario,  and 
the  owners  of  canal  boats  on  the  Erie  Canal,  for  the  transportation  of  goods  and  mer- 
chandise between  the  city  of  New  York  and  the  ports  and  places  on  Lake  Ontario  and 
the  River  St.  Lawrence,  and  a  contract  was  entered  into  by  the  agent  of  such  associa- 
tion, for  the  transportation  of  goods  from  the  city  of  New  York  to  Ogdensburgli,  on 
tlie  River  St.  Lawrence,  and  the  goods  were  lost  on  Lake  Ontario  ;  it  was  held  that  all 
the  defendants  were  answ*ablc  for  the  loss,  although  some  of  them  had  no  interest  in 
the  vessel  navigating  the  lake,  in  whicli  the  goods  were  shipped.  Fairehild  v.  Slocum, 
19  Wend.  329.  See  also  Fromont  v.  Coupland,  2  Bing.  170;  Helsby  v.  Mears,  5  B. 
&  C.  .504. 

-  Thus,  where  A  and  B  were  jointly  interested  in  the  profits  of  a  common  stage- 
wagon,  but,  by  a  private  agreement  between  themselves,  each  undertook  the  conducting 
and  management  of  the  wagon,  with  his  own  drivers  and  horses,  for  specified  distances, 
it  was  held  that,  notwithstanding  this  private  agreement,  they  were  jointly  responsible 
to  third  persons  for  the  negligence  of  their  drivers  throughout  the  whole  distance. 
Waland  v.  Elkins,  1  Stark.  272 ;  S.  C.  mm.  Weyland  v.  Elkins,  Holt,  N.  P.  227.  And 
see  Weed  v.  The  S.  and  S.  Railroad  Co.  19  Wend.  534. 

■^  See  Garside  v.  Trent  and  Mersey  Navigation  Co.  4  T.  R.  581 ;  Ackley  v.  Kellogg, 
8  Cow.  223. 

■*  See  Muschamp  v.  The  L.  and  P.  Junction  Railway  Co.  8  M.  &  W.  421,  the  lead- 
ing English  case  upon  this  subject.  In  this  case  the  defendants  were  the  proprietors  of 
the  Lancaster  and  Preston  Junction  Railway,  and  carried  on  business  on  their  line  be- 
tween Lancaster  and  Preston,  as  common  carriers.  At  Preston,  the  defendants'  line 
joined  that  of  the  North  Union  Railway.  The  plaintiff,  a  stone  mason,  living  at  Lan- 
caster, had  gone  into  Derbyshire  in  search  of  work,  leaving  his  box  of  tools  to  be  sent 
after  him.  His  mother,  accordingly,  took  the  box  to  the  railway  station  at  Lancaster, 
directed  to  the  plaintiff  at  a  place  beyond  Preston,  in  Derby siiire,  and  requested  the 
clerk  at  the  station  to  book  it.  She  offered  to  pay  the  carriage  in  advance  for  the 
whole  distance,  but  was  told  by  the  clerk  that  it  had  better  be  paid  at  the  place  of  de- 
livery. It  appeared  that  tlie  box  arrived  safely  at  Preston,  but  was  lost  after  it  was 
dispatched  from  thence  by  the  North  Union  Railway.  The  plaintiff  brought  this  action 
to  recover  for  the  loss  of  the  box.  Rolfe,  B.,  before  whom  the  cause  was  tried,  stated, 
to  the  jury,  in  summing  up,  that,  wliere  a  common  carrier  takes  into  his  care  a  parcel 
directed  to  a  particular  place,  and  does  not,  by  positive  agreement,  limit  his  responsi- 
bility to  a  part  only  of  the  distance,  that  is  prima  facie  evidence  of  an  undertaking  to 
carry  the  parcel  to  the  place  to  which  it  is  directed ;  and  that  the  same  rule  applied,  al- 
though that  place  were  beyond  the  limits  within  which  he  in  general  professed  to  carry 
on  his  trade  of  carrier.     And  upon  a  motion  for  a  new  trial,  the  Court  of  Exchequer 

19 


218  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XII. 

unless  he  can  show  that  the  fact  is  otherwise,  and  that  the  sender 
understood  him  difterently,  or  had  good  reason  so  to  understand 
him.^  Bat  in  this  country,  according  to  the  weight  of  recent 
authority,  a  common  carrier  will  not  be  held  liable,  as  such, 
beyond  his  own  route,  without  evidence  of  a  distinct  contract  to 
that  effect;  and  the  mere  fact  of  his  receiving  a  package  directed 
to  a  place  beyond  his  route,  will  not  be  sufficient  evidence  for 
that  purpose.^ 


SECTION    VI. 

OF    THE    CARRIER    OF   PASSENGERS. 

The  carriers  of  passengers  are  under  a  more  limited  liability 
than  the  carriers   of  goods.     This  .is  now  well  settled."     The 

held  the  instructions  to  be  correct.  And  sec,  to  the  same  effect,  Watson  r.  The  A.,  N., 
and  B.  Kaihvay  Co.  3  Eng.  Law  and  Eq.  497.  See  also,  Fowles  v.  The  Great  Western 
Kaiiway  Co.  16  Eng.  Law  and  Eq.  531  ;  Scotthorn  v.  The  South  Staffordshire  Eailwav 
Co.  18  id.  553;  Wilson  v.  The  Y.  N.  and  B.  Railway  Co.  18  id.  557,  n.  (1.) 

1  See  cases  in  preceding  note. 

^  Thus,  in  the  recent  case  of  Nutting  v.  Conn.  River  R.  E.  Co.  1  Gray,  502,  it  was 
held  that  a  railroad  corporation,  receiving  goods  for  tran^ortation  to  a  place  situated 
beyond  the  line  of  tlicir  road,  on  another  railroad  which  connects  witli  theirs,  but  with 
the  proprietors  of  which  they  have  no  connection  in  business,  and  taking  pay  for  the 
transportation  over  their  own  road  only,  are  not  liable,  in  the  absence  of  any  special 
contract,  for  the  loss  of  the  goods,  after  their  delivery  to  the  proprietors  of  the  other 
railroad.  And  il/ei'cfl//',  ,J.,  said :  "The  plaintiff's  counsel  relied  on  the  caseofMus- 
champ  V.  L.  and  P.  Junction  Railway,  8  M.  &  W.  421,  in  which  it  was  decided,  by  the 
Court  of  Exchequer,  that,  when  a  railway  company  take  into  their  care  a  pai'cel  directed 
to  a  particular  place,  and  do  not,  by  positive  agreement,  limit  their  responsibility  to  a 
part  only  of  the  distance,  that  is  priina  facie  evidence  of  an  undertaking  to  carry  the 
parcel  to  the  place  to  which  it  is  directed,  although  that  place  be  beyond  the  limits 
within  which  the  company,  in  general,  profess  to  carry  on  their  business  of  carriers. 
And  two  justices  of  the  Queen's  Bench  subsequently  made  a  like  decision.  Watson  v. 
A.  N.  and  B.  Railway,  3  Eng.  Law  and  Eq.  497.  We  cannot  concur  in  that  view  of 
the  law  ;  and  we  are  sustained,  in  our  dissent  from  it,  by  the  Court  of  Errors  in  New 
York,  and  by  the  Supreme  Courts  of  Vermont  and  Connecticut.  Van  Santvoord  v. 
St.  John,  6  Hill,  157;  Farmers'  and  Mechanics' Bank  v.  Champlain  Transportation 
Co.  18  Vt.  140,  and  23  Vt,  209  ;  Hood  v.  New  York  and  New  Haven  E.  R.  22  Conn.  1. 
In  these  cases,  the  decision  in  Weed  ?\  Saratoga  and  Schenectady  Railroad,  19  Wend. 
534,  (which  was  cited  by  the  present  plaintiff's  counsel,)  was  said  to  be  distinguishable 
from  such  a  case  as  this,  and  to  be  reconcilable  with  tlie  rule  that  each  carrier  is  bound 
only  to  the  end  of  his  route,  unless  he  makes  a  special  contract  that  binds  him  further." 
And  see  further,  1  Parsons  on  Contracts,  687,  n.  (k.) 

^  This  distinction  was  recognized  as  early  as  the  case  of  Aston  v.  Heavan,  2  Esp. 
533.  That  was  an  action  against  the  defendants,  as  proprietors  of  a  stage-coach,  to 
recover  damages  received  by  the  plaintiff  in  consequence  of  the  upsetting  of  the  de- 
fendant's coach.  The  defence  relied  upon  was,  that  the  coach  was  driving  at  a  regular 
pace  on  the  Hammersmith  road,  but  that  on  the  side  was  a  pump  of  considerable  height, 
from  whence  the  water  was  falling  into  a  tub  below  ;  that  the  sun  shone  brightly,  and 
being  reflected  strongly  from  the  water,  tlie  horses  had  taken  fright  and  run  against  the 
bank  at  the  opposite  side,  where  the  coach  was  overset.  And  E;/re,  C.  J.,  said  :  "  This 
action  is  founded  entirely  on  negligence.    It  has  been  said,  by  the  counsel  for  the 


cii.  xil]  of  the  carriage  of  goods.  219 

reason  is,  that  they  have  not  the  same  control  over  passengers  as 
over  goods;  cannot  fasten  them  clown,  and  use  other  means  of 
securing  them.  Hence,  the  distinction  applies  to  the  carriage 
of  slaves;  for,  while  they  are  in  some  respects  property,  they 
are  also  possessed  of  the  same  power  and  right  of  locomotion 
as  other  men.^  But,  while  the  liability  of  the  carrier  of  passen- 
gers is  thus  mitigated,  it  is  still  stringent  and  extreme.  No  proof 
of  care  will  excuse  the  carrier  if  he  loses  goods  committed  to  him. 
But  proof  of  the  utmost  care  will  excuse  him  for  injury  done  to 
passengers.  Some  of  the  authorities,  and,  as  we  think,  the  reason 
of  the  case,  would  justify  us  in  saying  that  the  carrier  of  passen- 
gers is  liable  for  injury  to  them,  unless  he  can  show  that  he  took 


plaintiff,  that  wherever  a  case  happens,  even  where  there  has  been  no  negligence,  he 
would  take  the  opinion  of  the  court  whether  defendants,  circumstanced  as  the  present, 
that  is,  coacli-owners,  should  not  be  liable  in  all  cases,  except  where  the  injury  happens 
from  the  act  of  God  or  the  king's  enemies.  I  am  of  opinion  the  cases  of  the  loss  of 
goods  by  carriers  and  the  present  are  totally  unlike.  AVhcn  that  case  does  occur,  he 
will  be  told  that  carriers  of  goods  arc  liable  by  the  custom,  to  guard  against  frauds  they 
might  be  tempted  to  commit  by  taking  goods  intrusted  them  to  carry,  and  then  pre- 
tending they  had  lost  or  been  robbed  of  them;  and  because  they  can  protect  themselves; 
but  there  is  no  such  rule  in  the  case  of  the  carriage  of  the  persons.  This  action  stands 
on  the  grounds  of  negligence  only."  To  the  same  effect  is  Christie  v.  Griggs,  2  Camp. 
79.  That  was  an  action  o(  assumpsit  against  the  defendant,  as  owner  of  the  Blackwall 
stage,  on  which  the  plaintiff  was  travelling  to'London,  when  it  broke  down,  and  he  was 
greatly  bruised.  The  first  count  imputed  the  accident  to  the  negligence  of  the  driver  ; 
the  second  to  the  insufficiency  of  the  axletree  of  the  carriage.  The  defendant  intro- 
duced 4|idence  to  show  that  the  axletree  had  been  examined  a  few  days  before  it  broke, 
without  any  flaw  being  discovered  in  it;  and  that,  when  the  accident  happened,  the 
coachman,  a  very  skilful  driver,  was  driving  in  the  usual  track,  and  at  a  moderate  pace. 
Mansjield,  C.  J.,  in  summing  up  to  the  jury,  said  :  "As  the  driver  has  been  cleared  of 
everything  like  negligence,  the  question  for  the  jury  will  be  as  to  the  sufficiency  of  the 
coach.  If  the  axletree  was  sound,  as  far  as  human  eye  could  discover,  the  defendant  is 
not  liable.  There  is  a  difference  between  a  contract  to  carry  goods  and  a  contract  to 
carry  passengers.  For  the  goods  the  carrier  is  answerable  at  all  events.  But  he  does 
not  warrant  the  safety  of  the  passengers.  This  undertaking  as  to  them  goes  no  further 
than  this,  that,  as  far  as  human  care  and  foresight  can  go,  he  will  provide  for  their  safe 
conveyance.  Therefore,  if  the  breaking  down  of  the  coach  was  purely  accidental,  the 
plaintiff  has  no  remedy  for  the  misfortune  he  has  encountered."  The  same  rule  has 
been  repeatedlv  declared,  in  subsequent  cases,  both  in  this  country  and  in  England. 
See  Harris  v.  Costar,  1  C.  &  P.  636  ;  White  v.  Boulton,  Peake's  Cas.  81  ;  Crofts  v. 
Waterhouse,  3  Bing.  319  ;  Dervvort  v.  Loomer,  21  Conn.  245  ;  Fuller  v.  The  Naugatuck 
R.  R.  Co.  21  Conn.  557  ;  Hall  w.  Conn.  River  Steamboat  Co.  13  Conn.  319  ;  McKinney 
(;.  Neil,  I  McLean,  540;  Maury  v.  Talmadge,  2  McLean,  157;  Stokes  v.  Saltonstall, 
13  Pet.  181 ;  Stockton  v.  Frey,  4  Gill,  406  ;  Camden  and  Amboy  R.  R.  Co.  v.  Burke, 
13  Wend.  626;  Hollister  v.  Nowlen,  19  Wend.  236;  Caldwell  v.  Murphy,  1  Duer, 
233. 

1  Boyce  v.  Anderson,  2  Pet.  150.  This  was  an  action  brought  by  the  owner  of 
slaves,  against  the  ])roprietors  of  a  steamboat,  on  the  Mississippi  River,  to  recover 
damages  for  the  loss  of  the  slaves,  alleged  to  have  been  caused  by  the  negligence  or 
mismanagement  of  the  captain  and  commandant  of  the  boat.  The  court  below  in- 
structed the  jury  "that  the  doctrine  of  common  carriers  did  not  apply  to  the  case  of 
carrying  intelligent  beings,  such  as  negroes;"  and  the  Supreme  Court  held  such  in- 
struction correct.  And  see  Clark  v.  McDonald,  4  McCord,  223 ;  Williams  v.  Taylor, 
4  Porter,  234. 


220  ELEMENTS,  OF   MERCANTILE   LAW.  [cil,  XII. 

all  possible  care,  —  giving  always  a  reasonable  construction  to 
this  phrase.^ 


SECTION  VII. 

OF    A   NOTICE    BY   THE    CARRIER,    RESPECTING    HIS   LIABILITY. 

It  is  now  settled  —  though  formerly  denied  —  that  the  common 
carrier  has  a  right  to  make  a  special  agreement  with  the  senders 
of  goods,  which  shall  materially  modify,  or  even  wholly  prevent 
his  liability  for  accidental  loss  or  injury  to  the  goods.^     Whether 

1  See  Hcffeman  c.  Western  Railroad  Corp.  16  Barb.  353  ;  and  cases  supra.  In  Ware 
V.  Gay,  11  Pick.  106,  it  was  held  that  if,  in  an  action  by  a  passenger  against  the  pro- 
prietors of  a  stage-coach  for  an  injury  occasioned  by  the  insufficiency  of  the  coach,  the 
plaintiff  proves  that,  while  the  coach  was  driven  at  a  moderate  rate  upon  a  plain  and 
level  road,  without  coming  in  contact  with  any  other  object,  one  of  the  wheels  came  off, 
and  the  coach  overset,  whereby  the  plaintiff  was  hurt,  the  law  will  imply  negligence, 
and  the  burden  of  proof  will  rest  upon  the  defendants  to  rebut  this  legal  inference,  by 
showing  that  the  coach  was  properly  fitted  out  and  provided.  And  see,  to  the  same 
effect,  Christie  v.  Griggs,  supra;  Carpue  v.  The  L.  and  B.  Railw.ay  Co.  5  Q.  B.  747  ; 
Skinner  r.  Brighton  and  Southcoast  Railway  Co.  2  Eng.  Law  and  Eq.  360 ;  Stokes  v. 
Saltonstall,  13  'Pet.  181 ;  Stockton  v.  Frey.  4  Gill,  406  ;  McKinney  v.  Neil,  1  McLean, 
540. 

-  In  England,  no  question  is  ever  made  as  to  the  validity  of  such  a  contract,  and  al- 
though there  are  few,  if  any,  cases  where  the  point  was  expressly  adjudged,  yet  in  all 
the  cases  such  was  assumed  to  be  the  law.  Nor  until  the  case  of  Cole  ?>.  Goodwin,  19 
Wend.  251,  was  the  validity  of  such  a  contract  ever  denied  in  this  country.  In  that 
case,  which  was  an  action  against  the  defendants  as  common  carriers,  the  only  ^cstion 
was,  whether  a  notice  published  by  them,  that  all  baggage  conveyed  over  their  line 
would  be  at  the  risk  of  the  owners,  such  notice  having  been  brought  home  to  the  knowl- 
edge of  the  plaintiff,  would  discharge  the  defendants  from  their  common-law  liability. 
It  was  held  that  it  should  not ;  and  Coicen,  J.,  in  the  opinion  delivered  by  him,  insisted 
that  common  carriers,  from  their  public  em])loyment,  owe  duties  at  common  law  from 
which  public  policy  demands  that  they  should  not  be  discharged,  and  that,  consequently, 
they  cannot  limit  their  common-law  liability  even  by  express  agreement.  And  in 
Jones  V.  Voorhees,  10  Ohio,  145,  although  this  question  was  not  directly  involvdi  in 
the  decision,  the  court  intimated  a  strong  inclination  to  adopt  the  views  of  Mr.  Justice 
Cowen.  In  Gould  v.  Hill,  2  Hill,  623,  the  question  as  to  the  validity  of  such  a  contract 
was  directly  before  the  court.  In  that  case  the  defendants,  who  were  common  carriers, 
on  receiving  goods  for  transportation,  gave  the  owner  a  memorandum  by  which  they 
promised  to  forward  the  goods  to  their  place  of  destination,  danger  of  fire,  &c.,  excepted. 
And  Cowen,  J.,  who  delivered  the  opinion  of  the  court,  referring  to  his  opinion  in  Cole 
I'.  Goodwin,  supra,  held  that  common  carriers  could  not  limit  their  liability  as  such  by 
an  express  agreement  or  special  acceptance  of  the  goods  to  be  transported  ;  and  that, 
therefore,  the  defendants  wei'e  liable  for  loss  of  the  goods  by  fire  while  in  their  posses- 
sion, though  not  resulting  from  negligence.  Nelson,  C.  J.,  dissented.  With  the  excep- 
tion of  Fish  V.  Chapman,  2  Geo.  349,  we  are  not  aware  that  the  case  of  Gould  v.  Hill 
has  ever  been  sanctioned  by  any  court  in  this  country.  On  the  contrary,  the  Supreme 
Court  of  the  United  States,  in  New  Jersey  Steam  Navigation  Company  v.  Merchants' 
Bank,  6  How.  344,  expressly  deny  the  doctrine  of  Gould  v.  Hill,  and  hold  such  a  con- 
tract to  be  valid.  iVefcoH,  J.,  said :  "As  the  extraordinary  duties  annexed  to  his  em- 
ployment, concei-n  only,  in  the  particular  instance,  the  parties  to  the- transaction,  in- 
volving simply  rights  of  property,  —  the  safe  custody  and  delivery  of  the  goods,  — we 
are  unable  to  perceive  any  well-founded  objection  to  the  restriction,  or  any  stronger 
reasons  forbidding  it,  than  exist  in  the  case  of  any  other  insurer  of  goods,  to  which  his 


CII.  XII.]  OF   THE   CARRIAGE   OF    GOODS.  221 

he  could  make  such  a  bargain  with  his  passengers,  to  prevent  his 
liability  for  injury  to  their  persons,  is  much  more  doubtful.  The 
question  does  not  seem  to  have  come  directly  before  the  court* 
And  although  the  language  used  to  express  the  carrier's  rights  is 
sometimes  broad  enough  to  extend  to  the  persons  or  passengers 
as  well  as  to  their  goods,  we  think  it  open  to  doubt  whether" this 
was  meant,  or  would  be  generally  admitted  as  law.  And  if  it 
were  admitted,  we  should  expect  the  carrier  held  to  stricter  proof 
and  of  a  more  definite  bargain  with  regard  to  persons,  than  might 

obligation  is  analogous;  and  which  depends  altogether  upon  the  contract  between  the 
parties.  Th#own"cr,  by  entry  into  the  contract,  virtually  agrees  that,  in  respect  to  the 
particular  transaction,  the  carrier  is  not  to  be  regarded  as  in  the  exercise  of  his  public 
employment,  but  as  a  private  person  who  incurs  no  responsibility  beyond  that  of  an 
ordinary  bailee  for  hire,  and  answerable  only  for  misconduct  or  negligence."  Since 
that  time,  Gould  v.  Hill  has  been  expressly  overruled  in  New  York,  by  the  Court  of 
Appeals.  Dorr  v.  N.  J.  Steam  Navigation  Co.  4  Sandf.  13G,  1  Kernan,  485.  ^  This 
was  an  action  against  the  defendants,  as  common  carriers  upon  Long  Island  Sound, 
between  New  York  and  Stonington,  to  recover  damages  for  the  loss  of  goods.  The 
declaration  stated  that  the  plaintiffs,  merchants  in  New  York,  shipped  the  goods  in 
question  on  board  the  steamer  Lexington,  in  the  defendants'  line,  to  be  carried  to 
Stonington  ;  that  on  the  same  evening,  the  steamer  was  consumed  by  fire  on  her  pas- 
sage, and  the  plaintiffs'  goods  destroyed.  The  defendants  pleaded  that  the  goods  in 
q^nestion  were  received  by  them  under  a  special  contract,  by  reason  of  a  clause  and 
notice  inserted  in  their  bill  of  lading,  which  was  set  forth  in  the  plea,  and  contained, 
among  other  things,  that  the  goods  in  question  were  to  be  transported  to  Stonington ; 
danger  of  fire,  &c.,  excepted.  The  plea  then  averred  that  the  liability  of  tlie  defendants 
was  restricted  by  the  exception  of  the  casualties  mentioned  in  the  bill  of  lading,  and 
that  the  loss  in  question  was  occasioned  by  one  of  the  excepted  casualties,  and  was 
without  the  fault  or  negligence  of  the  defendants.  Upon  a  demurrer  to  this  plea,  the 
Superior  Court  of  the  city  of  New  York  gave  judgment  for  the  defendants.  The  case 
was  afterwards  carried  to  the  Court  of  Appeals,  where  the  judgment  of  the  Superior 
Court  was  affirmed.  Parlcer,  J.,  in  delivering  the  opinion  of  the  Court  of  Appeals, 
said:  "The  plaintiffs  rely  upon  the  case  of  Gould  v.  Hill,  2  Hill,  623.  It  was  there 
broadly  decided,  by  a  majority  of  the  late  Supreme  Court,  Chief  Justice  Nelson  dissent- 
ing, that  common  carriers  could  not  limit  their  liability,  or  evade  the  consequences  of 
a  breach  of  their  legal  duties,  as  such,  by  an  express  agreement  or  special  acceptance 
of  the  goods  to  be  transported.  That  decision  rested  upon  no  earlier  adjudication  in 
this  State,  though  the  question  had  been  previously  discussed  and  obiter  opinions  some- 
times expressed  upon  it  by  judges,  in  deciding  the  question  whether  the  common  car- 
rier could  lessen  the  extent  of  his  liability,  by  notice.  But  the  case  of  Gould  v.  Hill 
has  been  deliberately  overruled  by  the  present  Supreme  Court,  in  two  carefully  consid- 
ered cases,  namely,  Parsons  v.  Montcath,  13  Barb.  353;  and  Moore  v.  Evans,  14  id. 
524.  In  both  those  cases  the  question  is  examined  with  much  ability,  and  I  think  the 
unsoundness  of  the  conclusion  in  Gould  v.  Hill,  most  satisfactorily  shown.  I  am  not 
aware  that  Gould  v.  Hill  has  been  followed  in  any  reported  case.  In  Wells  v.  The 
Steam  Navigation  Co.  2  Comst.  209,  Branson,  J.,  who  seems  to  have  concurred  with 
Judge  Coiven  in  deciding  Gould  v.  Hill,  speaks  of  the  question  as  being  still,  perhaps,  a 
debatable  one."  And  see  Stoddard  v.  The  Long  Island  II.  R.  Co.  5  Sandf.  180;  Mer- 
cantile Mutual  Ins.  Co.  v.  Chase,  1  E.  D.  Smith,  115;  1  Parsons  on  Con.  703,  n.  (d.) 
It  should  be  observed  that  the  Supreme  Court  of  Michigan,  in  the  recent  case  of  Michi- 
gan Central  R.  R.  Co.  v.  Ward, '2  Mich.  538,  held  that  the  rule  we  are  now  considering 
did  not  apply  to  the  plaintiffs,  on  the  ground  that  their  charter  is  in  the  nature  of  a 
contract  between  the  company  and  the  State,  permanently  binding  upon  each,  and  the 
principal  engagement  on  the  part  of  the  company,  is,  that  they  shall  become,  and  con- 
tinue to  remain,  common  carriers.  Their  liability  as  common  carriers,  consequent  upon 
the  contract,  and  the  law  appertaining  thereto,  becomes  irrevocably  fixed;  and,  there- 
fore, they  cannot  alter  or  modify  this  liability  by  any  stipulation  or  contract. 

19* 


222  ELEMENTS    OF   MERCANTILE   LAW.  [CU.  XII. 

suffice  as  to  goods.  The  principal  question  is,  what  constitutes 
such  a  bargain.  It  seems  to  be  well  settled,  by  the  weight  of 
^mthority  in  this  country,  that  a  mere  notice  that  the  carrier 
is  not  responsible,  or  his  refusal  to  be  responsible,  although 
brought  home  to  the  knowledge  of  the  other  party,  does  not 
necessarily  constitute  an  agreement.^  The  reason  is  this.  The 
sender  has  a  right  to  insist  upon  sending  his  goods,  and  the  pas- 
senger has  a  right  to  insist  upon  going  himself,  and  leave  the 
carrier  to  his  legal  responsibility;  and  the  carrier  is  bound  to 
take  them  on  these  terms.  If,  therefore,  the  sender  or  the  pas- 
senger, after  receiving  such  notice,  only  sends  or  goe#in  silence, 
and  without  expressing  any  assent,  especially  if  the  notice  be 
given  at  such  time  or  under  such  circumstances  as  would  make 
it  inconvenient  for  the  sender  not  to  send,  or  for  the  passenger 
not  to  go,  then  the  law  will  not  presume  from  his  sending  or 
going  an  assent  to  the  carrier's  terms. 

But  the  assent  may  be  expressed  by  words,  or  made  manifest 
by  acts ;  and  it  is  a  question  of  evidence  for  the  jury  whether 
there  was  such  an  agreement. 

It  seems  to  be  conceded  also,  that  a  notice  by  the  carrier, 
which  only  limits  and  defines  his  liability  to  a  reasonable  extent, 
as  one  which  states  what  kind  of  goods  he  will  carry,  and  what 
he  vvill  not ;  or  to  what  amount  only  he  will  be  liable  for  passen- 


1  It  was  held  in  England,  prior  to  the  passage  of  the  statiite  of  11  Geo.  IV.,  and 
1  Will.  IV.  c.  68,  commonly  called  the  Carriers'  Act,  that  such  notices  were  valid,  and 
the  sender  of  goods  was  bound  by  their  terms,  although  some  of  the  courts  regretted 
that  such  was  the  rule.  See  Having  v.  Todd,  1  Stark.  72  ;  Ellis  v.  Turner,  8  T.  E. 
531;  Lyon  v.  Mells,  5  East,  428;  Evans  v.  Soule,  2  M.  &  S.  1 ;  Lecson  v.  Holt,  1  Stark. 
186.  The  Carriers'  Act,  above  referred  to,  put  an  end  to  this  question.  In  this  country, 
the  courts  have  generally  adopted  the  rule  as  stated  in  the  text ;  as  in  Cole  v.  Goodwin, 
19  Wend.  251,  and  Hollister  v.  Nowlen,  id.  234.  In  both  these  cases  the  defendants 
were  coach-proprietors,  and  had  published  notices  to  the  effect  that  all  baggage  sent  by 
their  lines  would  be  at  the  risk  of  the  owners.  The  Supreme  Court  of  New  York  de- 
clared that  such  notices  were  of  no  avail,  and  that  the  defendants  were  subject  to  their 
common-law  liability.  In  the  latter  case,  Cowen,  J.,  delivering  the  opinion,  held,  as  we 
have  seen,  that  such  notices  were  invalid,  and  that  even  a  special  agreement  would  not 
avail  the  defendants  in  such  case.  In  the  former  case,  Bronson,  J.,  held  that  such  notice 
did  not  amount  to  a  special  contract.  And  the  following  cases  hold  the  same  doctrine. 
Farmers'  and  Mechanics'  Bank  v.  Champlain  Transportation  Co.  23  Vt.  186,  joer  Red- 
field^  J. ;  Clark  v.  Faxton,  21  Wend.  153  ;  New  Jersey  Steam  Navigation  Co.  v.  Mer- 
chants' Bank,  6  How.  344;  Moses  v.  Boston  and  Maine  R.  R.  4  Foster,  71;  Fish  v. 
Chapman,  2  Geo.  349  ;  Stoddard  v.  Long  Island  Railway  Co.  5  Sandf.  180;  Parsons 
V,  Monteath,  13  Barb.  353  ;  Dorr  v.  New  Jersey  Steam  Navigation  Co.  4  Sandf.  136, 
1  Kernan,  485.  The  following  cases,  however,  hold,  although  with  apparent  reluctance, 
that  such  notices  are  binding.  See  Sager  v.  The  Portsmouth,  &e..  Railroad  Co.  31 
Maine,  228 ;  C  and  A.  Railroad  Co.  v.  Baldauf,  16  Penn.  St.  67  ;  Laing  v.  Colder,  8 
Barr,  479  ;  Bingham  v.  Rogers,  6  W.  &  S.  500. 


en.  XII.]  OF   THE   CARRIAGE    OF   GOODS.  223 

gers'  baggage,  without  special  notice ;  or  what  information  he 
will  require,  if  certain  articles,  as  jewels  or  gold,  are  carried,  or 
what  increased  rates  must  be  paid  for  such  things,  —  any  notice 
of  this  kind,  if  in  itself  reasonable  and  just,  will  bind  the  party 
receiving  it.^ 

But  no  party  will  be  affected  by  any  notice,  —  neither  the  car- 
rier, nor  a  sender  of  goods,  nor  a  passenger,  —  unless  a  knowledge 
of  it  can  be  brought  home  to  him.^  Bat  this  may  be  done  by 
indirect  evidence.  As  by  showing  that  it  was  stated  on  a  receipt 
given  to  him,  or  on  a  ticket  sold  him,  or  in  a  newspaper  which 
he  actually  read,  or,  perhaps,  in  one  which  he  was  in  the  habit 
of  reading,  or  even  that  it  was  a  matter  of  usage  and  generally 
known.3  This  question  is  one  of  fact,  which  the  jury  will  deter- 
mine upon  all  the  evidence,  under  the  direction  of  the  court. 

1  This  was  decided  in  Nicholson  v.  Willan,  5  East,  507.  There  the  defendant  was 
a  coach  proprietor,  and  had  published  a  notice,  the  purport  of  which  was  that  he  would 
not  be  accountable  for  any  package  whatever,  (if  lost  or  damaged,)  above  the  value  of 
£5,  unless  insured  and  paid  for  at  the  time  of  delivery.  The  action  was  brought  to 
recover  for  the  loss  of  a  parcel  delivered  to  the  defendant  to  carry,  containing  goods  to 
the  value  of  £58.  No  disclosure  was  made  of  the  true  value  of  the  parcel,  nor  was 
any  extra  freight  paid ;  and  the  court  held  that  the  defendant  was  protected  by  his 
notice.  And  in  the  English  courts,  from  this  time  to  the  passage  of  the  Carriers'  Act, 
effect  was  given  to  similar  notices.  See  Harris  v.  Packwood,  3  Taunt.  264  ;  Buck  v. 
Evans,  16  East,  244  ;  Levi  v.  Waterhouse,  1  Price,  280  ;  Bodcnham  v.  Bennett,  4  Price, 
31 ;  Smith  v.  Home,  8  Taunt.  144;  Birkett  v.  Willan,  2  B.  &  Aid.  356 ;  Batson  v.  Dono- 
van, 4  B.  &  Aid.  21 ;  Sleat  v.  Fagg,  B.  &  Aid.  342 ;  Duff  v.  Budd,  3  Brod.  &  Bing.  1 77 ; 
Marsh  v.  Home,  5  B.  &  Cr.  322  ;  Brooke  v.  Pickwick,  4  Bing.  218  ;  Riley  v.  Horne,  5 
Bing.  218 ;  Bradley  v.  Waterhouse, 'Mood.  &  M.  154.  In  this  country,  very  few  cases  have 
been  decided  upon  notices  of  this  nature.  In  Farmers'  and  Mechanics'  Bank  v.  Cham- 
plain  Transportation  Co.  23  Vt.  186,  Red  field,  J.,  says:  "  We  regard  it  as  well  settled 
that  the  carrier  may,  by  general  notice  brought  home  to  the  owner  of  the  tilings  deliv- 
ered for  carriage,  limit  his  responsibility  for  carrying  certain  commodities  beyond  the 
line  of  his  general  business,  or  he  may  make  his  responsibility  dependent  upon  certain 
conditions,  as  having  notice  of  the  kind  and  quantity  of  the  things  deposited  for  car- 
riage, and  a  certain  reasonable  rate  of  premium  for  the  insurance  paid,  beyond  tlie  mere 
expense  of  carriage."  And  dicta  to  the  same  effect  may  be  found  in  the  following 
cases.  Bean  i'.  Green,  3  Fairf.  422  ;  Orange  County  Bank  v.  Brown,  9  Wend.  115  ; 
Cole  V.  Goodwin,  19  Wend.  251,  per  Coiven,  J. 

-  See  HoUister  v.  Nowlen,  iibi  supra  ;*Brooke  v.  Pickwick,  4  Bing.  218.  In  Camden 
and  Amboy  Eailroad  Co.  v.  Baldauf,  16  Penn.  St.  67,  where  the  notice  was  in  the 
English  language,  and  the  passenger  was  a  German,  who  did  not  understand  English, 
it  was  held  incumbent  on  the  carrier  to  prove  that  the  passenger  had  actual  knowledge 
of  the  limitation  in  the  notice.  And  see  Beckman  v.  Shouse,  5  Rawle,  189  ;  Kerr  v. 
Willan,  2  Stark.  53  ;  Clayton  v.  Hunt,  3  Campb.  27. 

3  Thus,  in  Whitesell  t'.'Crane,  8  W.  &  S.  369,  it  was  held  that  the  contents  of  notices 
restricting  the  liability  of  a  line  of  public  coaches,  was  sufficiently  made  known  to  pas- 
sengers by  being  posted  up  at  the  place  where  they  book  their  names.  And  sec  Hol- 
lister  V.  Nowlen,  supra;  Story  on  Bailments,  §  558;  2  Stark,  on  Ev.  338;  Harris  v. 
Packwood,  3  Taunt.  264 ;  Garnctt  v.  Willan,  5  B.  &  Aid-  53  ;  Duff  v.  Budd,  3  Brod. 
&  Bing.  177.  But  the  carrier  is  generally  held  to  very. strict  proof  that  the  bailee  had 
knowledge  of  the  notice.  See  the  very  strong  case  of  Brown  v.  Eastern  Railway  Co., 
decided  by  the  S.  J.  C.  of  Mass.,  in  1851,  6  Law  Rep.  N.  S.  39.  That  was  an  action 
of  assiwipsit  for  lost  baggage.  There  was  a  notice  printed  on  {he  back  of  the  passage- 
ticket  given  to  the  plaintiff,  that  the  defendants  would  not  be  responsible  beyond  a 


224  ELEMENTS    OE   MERCANTILE   LAW.  [CH.  XII. 

Any  fraud  towards  the  carrier,  as  a  fraudulent  disregard  of  a 
notice,  or  an  effort  to  cast  on  hitn  a  responsibility  he  is  not 
obliged  to  assume,  or  to  make  his  liability  seem  to  be  greater 
than  it  really  is,  —  will  extinguish  the  liability  of  the  carrier  so 
far  as  it  is  affected  by  such  fraud.' 

If  a  carrier  gives  a  notice  which  he  is  authorized  to  give,  the 
party  receiving  it  is  bound  by  it,  and  the  carrier  is  under  no  obli- 
gation to  make  a  special  inquiry  or  investigation  to  see  that  the 
notice  is  complied  with,  but  may  assume  this  as  done.^ 

It  should,  however,  be  remarked  that  such  notice  affects  the 
liability  of  the  common  carrier  only  so  far  as  it  is  peculiar  to 
him ;  that  is,  his  liability  for  a  loss  which  occurs  without  his 
agency  or  fault;  for  he  is  just  as  liable  as  he  would  be  without 
notice,  for  a  loss  or  injury  caused  by  his  own  negligence  or 
default.^ 

Whether  a  common  carrier  could  make  a  valid  bargain  by 
which  he  should  be  free  from  all  liability,  however  the  loss  might 

specified  sum  ;  but  no  other  uotice  given,  nor  was  plaintiff's  attention  called  to  this. 
Held,  that  these  facts  did  not  furnish  that  certain  notice  which  must  be  given  to  exone- 
rate such  carrier  from  Iiis  liability.  And  see  Bean  v.  Green,  3  Fairf.  422 ;  Cobdcn  v. 
Bolton,  2  Camp.  108;  Bulter  v.  Ilcane,  id.  415.  And  if  the  notice  is  ambiguous,  it 
will  be  construed  against  the  carrier.  Camden  and  Amboy  Railroad  Co.  v.  Baldauf, 
16  Penn.  St.  67;  Beckman  v.  Shouse,  5  Rawlc,  179.  So,  where  two  valid  notices  are 
given,  the  can-ier  will  be  bound  by  the  one  least  beneficial  to  himself.  Munn  v.  Baker, 
2  Stark.  255  ;  Cobdcn  v.  Bolton,  2  Camp.  108. 

1  See  Keni'ig  v.  Egglcston,  Aleyn,  9.3  ;  Gibbon  v.  Paynton,  4  Burr.  2298  ;  Tyly  v, 
Morrice,  Carth.  485  ;  Titchburne  v.  Wiiite,  1  Str.  145  ;  Anonymous,  cited  in  Morse  v. 
Slue,  1  Vent.  2;38 ;  Batson  v.  Donovan,  4  B.  &  Aid.  22. 

-  ]3atson  v.  Donovan,  supra ;  Harris  v.  Packwood,  3  Taunt.  264  ;  Marsh  v.  Home, 
5  B.  &  Cr.  322  ;  Duff  v.  Budd,  3  Brod.  &  Bing.  177  ;  Bodenham  v.  Bennett,  4  Price, 
31 ;  Sleat  v.  Fagg,  5  B.  &  Aid.  342.  But  contra,  per  Bronson,  J.,  in  HoUister  v.  Nowlen, 
19  Wend.  234. 

"  Although  there  is  a  considerable  degree  of  uncertainty  in  the  English  cases  upon 
this  question,  we  believe  the  decided  weight  of  authority  is  in  accordance  with  the  rule 
stated  in  tlie  text.  Thus,  in  Wyld  v.  Pickford,  8  M.  &  W.  443,  it  was  held  that  the 
carrier,  notwithstanding  his  notice,  was  bound  to  use  ordinary  care.  And  Parke,  B., 
after  reviewing  the  cases,  said  :  "  The  weight  *of  authority  seems  to  be  in  favor  of  the 
doctrine,  that,  in  order  to  render  a  carrier  liable  after  such  a  notice,  it  is  not  necessary 
to  prove  a  total  abandonment  of  that  character,  or  an  act  of  wilful  misconduct,  but  that 
it  is  enough  to  prove  an  act  of  ordinary  negligence, — gross  negligence,  in  the  sense  in 
which  it  has  been  understood  in  the  last-mentioned  cases ;  and  that  the  effect  of  a 
notice,  in  the  form  stated  in  the  plea,  is,  that  the  carrier  will  not,  unless  he  is  paid  a 
premium,  be  responsible  for  all  events  (other  than  the  act  of  God  and  the  queen's  ene- 
mies) by  which  loss  or  damage  to  the  owner  may  arise,  against  which  events  he  is,  by 
common  law,  a  sort  of  insurer  j  but  still,  he  undertake^  to  carry  from  one  place  to 
another,  and  for-  some  reward  in  respect  of  the  carriage,  and  is  therefore  bound  to  use 
ordinary  care  in  the  custody  of  the  goods,  and  their  conveyance  to,  and  delivery  at, 
their  place  of  destination,  and  in  providing  proper  vehicles  for  tlieir  carriage;  and  after 
such  a  notice,  it  may  be  that  the  burden  of  proof  of  damage  or  loss  by  the  want  of  such 
cure,  would  lie  on  the  plaintiff."  And  see  Bodenham  v.  Bennett,  4  Price,  34  ;  Beck  v. 
Evans,  16  East,  244;  Garnett  v.  Willan,  5  B.  &  Aid.  57  ;  Batson  v.  Donovan,  4  B.  & 
Aid.  30  ;  Duff  v.  Budd,  3  Brod.  &  B.  182 ;  1  Parsons  on  Cont.  713,  n. 


CH.  XII.]  OF   THE   CARIIIAGE   OF   GOODS.  225 

occur,  may  not  be  certain.  But  in  the  present  state  of  the  law, 
we  are  inclined  to  think  he  might;  so  far,  that  such  a  bargain 
would  protect  him  against  every  thing  but  his  own  wilful  or 
fraudulent  misconduct.'  Beyond  this  no  bargain  could  lawfully 
extend. 


SECTION  VIII. 

OF   THE   carrier's   LIABILITY   FOR   GOODS   CARRIED   BY   PASSENGERS. 

A  carrier  of  goods  knows  precisely  what  goods,  or  rather  what 
parcels  and  packages  he  receives  and  is  responsible  for.  A  car- 
rier of  passengers  is  responsible  for  the  goods  they  carry  with 
them  as  baggage;  but  only  to  the  extent  of  what  might  be  fairly 
and  naturally  carried  as  such.^  This  must  always  be  a  question 
of  fact,  to  be  settled  as  such  by  the  jury  upon  all  the  evidence, 
arid  under  the  direction  of  the  court.  But  there  can  be  no  pre- 
cise and  definite  standard.  A  traveller  on  a  long  journey  needs 
more  money  and  more  baggage  than  on  a  short  one ;  one  to 
some  places,  and  for  some  purposes,  more  than  to  other  places  or 
for  other  purposes.^     The  rule  is  well  settled,  and  a  reasonable 

'  A  series  of  English  cases  since  the  passage  of  the  Carrier's  Act,  seem  to  have  settled 
this  point  in  England.  See  Chippendale  v.  L.  and  Y.  Railway  Co.  7  Eng.  Law  and 
Eq.  395;  Austin  v.  The  M.  S.  and  L,  Railway,  11  Eng.  Law  and  Eq.  506  ;  Carr  v. 
The  L.  and  Y.  Railway,  14  Eng.  Law  and  Eq.  344.  Eor  cases  in  this  country,  see 
Sager  v.  The  Portsmouth,  &c.  R.  R.  Co.  31  Maine,  228  ;  Reno  v.  Hogan,  12  B.  Monr. 
63.     And  see  1  Parsons  on  Con.  713,  n. 

-  In  Hawkins  v.  Hoffman,  6  Hill,  586,  it  was  said,  per  Bronson,  J.,  that  the  term 
baggage,  in  such  cases,  does  not  embrace  money  in  a  trunk,  or  articles  usually  carried 
about  the  person,  and  not  as  baggage.  And  in  Orange  County  Bank  v.  Brown,  9 
Wend,  85,  it  was  held  that,  where  the  baggage  of  a  passenger  consists  of  an  ordinary 
travelling  trunk,  in  which  tlierc  is  a  large  sum  of  money,  such  money  is  not  considered 
as  included  under  the  term  baggage,  so  as  to  render  the  carrier  responsible  for  it.  But 
a  passenger  may  carry,  as  baggage,  money,  not  exceeding  an  amount  ordinarily  carried 
for  travelling  expenses.  Thus,  it  was  held,  in  Jordan  v.  The  Fall  River  Railroad 
Company,  5  Cush.  69,  that  common  carriers  are  responsible  for  money  bond  fide  in- 
cluded in  the  baggage  of  a  passenger,  for  travelling  expenses  and  personal  use,  to  an 
amount  not  exceeding  what  a  prudent  person  would  deem  proper  and  necessary  for  the 
purpose.  And  see  Johnson  v.  Stone,  11  Humph.  419;  Bomar  v.  Maxwell,  9  Humph. 
621 ;  Weed  v.  S.  and  S.  Railroad  Co.  19  Wend.  534. 

^  In  McGill  V.  Rowand,  3  Barr.  451,  carriers  were  held  responsible  for  ladies'  trunks 
containing  apparel  and  jewels.  And  in  Woods  r.  Devin,  13  111.  746,  a  common  carrier 
of  passengers  was  held  liable  for  the  loss  of  a  pocket-pistol,  and  a  pair  of  duelling 
pistols,  contained  in  the  carpet-bag  of  a  passenger,  which  was  stolen  out  of  the  possession 
of  the  carrier.  But  see  Bomar  v.  Maxwell,  9  Humph.  621,  where  it  was  held  that  "a 
silver  watch,  worth  about  thirty-five  dollars ;  also  medicines,  handcuft's,  locks,  &c., 
worth  about  twenty  dollars,"  were  not  included  in  the  term  baggage,  and  that  the  car- 
rier was  not  responsible  for  their  loss.  In  Jones  v.  Voorhees,  10  Ohio,  145,  it  was  held 
that  a  gold  watch,  of  the  value  of  ninety-five  dollars,  was  a  part  of  the  traveller's  bag- 
gage, and  his  trunk  a  proper  place  to  carry  it  in:  And  sec  Hawkins  i'.  Hoffman,  6 
Hill,  586,  per  Branson,  J.;  Brooke  v.  Pickwick,  4  Bing.  218. 


226  ELEMENTS    OF   MERCANTILE    LAW.  [ciL  XII. 

construction  and  application  of  it  must  always  be  made;  and  for 
this  purpose,  the  passenger  himself,  and  all  the  circumstances  of 
the  case,  must  be  considered.  The  purpose  of  the  rule  is,  to  pre- 
vent the  carrier  from  becoming  liable  by  the  fra.ud  of  the  passen- 
ger, or  by  conduct  which  would  have  the  effect  of  fraud  ;  for  this 
would  be  the  case  if  a  passenger  should  carry  merchandise  by 
way  of  baggage,  and  thus  make  the  carrier  of  passengers  a  carrier 
of  goods  without  knowing  it,  and  without  having  been  paid  for  it.^ 
For,  generally,  a  common  carrier  of  passengers,  by  stage,  packet, 
steamer,  or  cars,  carries  the  moderate  and  reasonable  baggage  of 
a  passenger,  without  being  paid  specifically  for  it.  But  the  law 
considers  a  payment  for  this  so  far  included  in  the  payment  of 
the  fare,  as  to  form  a  sufficient  ground  for  the  carrier's  liability.^ 

The  carrier  is  only  liable  for  the  goods  or  baggage  delivered  to 
him  and  placed  under  his  care.^  Hence,  if  a  sender  of  goods 
send  with  them,  his  own  servant,  and  intrust  them  to  him  and 
not  to*  the  carrier,  the  carrier  is  not  responsible.*  So,  if  a  passen- 
ger keeps  his  baggage,  or  any  part  of  it,  on  his  person,  or  in  his 
own  hands,  or  within  his  own  sight  and  immediate  control,  in- 
stead of  delivering  it  to  the  carrier  or  his  servants,  the  carrier  is 
not  liable,  as  carrier,  for  any  loss  or  injury  which  may  happen  to 
them;  that  is,  not  without  actual  default  in  relation  to  these 
specific  things.^     But  if  the  baggage  of  a  passenger  is  delivered 

1  In  Pardee  v.  Drew,  25  "Wend.  459^  it  was  held  that  the  owners  of  steamboats  were 
liable  as  common  carriers  for  the  baggage  of  passengers  ;  but  to  subject  them  to  dam- 
ages for  loss  thereof,  it  must  be  strictly  baggage  ;  that  is,  such  articles  of  necessity  and 
personal  convenience  as  arc  usually  carried  by  travellers.  It  was  accordingly  held  in 
that  case,  that  the  carrier  v/as  not  liable  for  the  loss  of  a  trunk,  containing  A'aluablc 
merchandise  and  nothing  else,  although  it  did  not  appear  that  the  plaintiff  iiad  any 
other  trunk  with  him.  And  see,  to  the  same  effect,  Hawkins  v.  Hoffman,  6  Hill,  586. 
But  in  Torter  v.  Ilildebrand,  14  Penn.  St.  129,  where  the  plaintiff'  was  a  carperiter 
moving  to  the  State  of  Ohio,  and  his  trunk  contained  carpenter's  tools,  to  the  value  of 
■§55,  which  the  jury  found  to  be  tlic  reasonable  tools  of  a  carpenter,  it  was  held  that  he 
was  entitled  to  recover.  And  see  Mad  River  and  Lake  Erie  Railroad  Co.  v.  Fulton, 
20  Ohio,  318;  Great  Northern  Railway  Co.  v.  Shepherd,  9  E.  L.  &  E.  477;  D wight 
V.  Brewster,  1  Pick.  50;  Bomar  v.  Maxwell,  9  Humph.  621;  Beckman  v.  Shouse, 
5  Rawle,  179. 

-  See  Orange  County  Bank  v.  Brown,  9  Wend.  85  ;  Powell  v.  Myers,  26  Wend.  591 ; 
Richards  v.  The  London,  &c..  Railway  Co.  7  C.  B.  839 ;  McGill  v.  Rowand,  3  Barr, 
451 ;  Camden  and  Amboy  R.  R.  Co.  v.  Burke,- 13  AVend.  611. 

^  See  Selway  v.  HoUoway,  1  Ld.  Raym.  46;  Buckman  v.  Levi,  3  Camp.  414; 
Packard  v.  Getman,  6  Cow.  757 ;  Maving  v.  Todd,  1  Stark.  72. 

*  See  Brind  v.  Dale,  8  C.  &  V.  207 ;  Lovett  v.  Hobbs,  2  Show.  127  ;  Leigh  v.  Smith, 
1  C.  &  P.  640;  Orange  County  Bank  v.  Brown,  9  Wend.  85. 

^  Thus,  in  an  action  brought  to  charge  a  railroad  company,  as  common  carriers,  for 
the  loss  of  an  overcoat,  belonging  to  a  passenger,  it  appeared  tliat  the  coat  was  not 
delivered  to  the  defendants,  but  that  the  passenger,  having  placed  it  on  the  seat  of  the 
car  in  which  he  sat,  forgot  to  take  it  with  him  when  he  left,  and  it  was  afterwards 


1 


CH.  Xir.]         ^  OF   THE   CARRIAGE   OP    GOODS.  227 

to  a  common  carrier,  he  is  liable  for  it  in  the  same  way,  and  to 
the  same  extent,  as  he  is  for  goods  which  he  carries. 


There  has  grown  np  in  this  country  a  vej^  peculiar  exception 
to  the  rules  of  evidence,  in  relation  to  trav^rers'  baggage.  This 
exception  permits  the  traveller  to  maintain  his  action  against  the 
carrier  by  proving,  by  his  own  testimony,  the  contents  of  a  lost 
trunk  or  box,  and  their  value.^  It  is  said  to  rest  altogether  upon 
necessity.  And,  therefore,  the  testimony  of  the  wife  of  the  owner 
is  similarly  admissible.^  But  it  is  always  limited  to  such  things 
—  in  quantity,  quality,  kind,  and  value  —  as  might  reasonably 
be  supposed  to  be  carried  in  such  a  trunk  or  valise.^  The  rule, 
with  this  limitation,  seems  reasonable  and  safe,  and  is  quite  gen- 
erally adopted.*  In  Massachusetts  it  was  distinctly  denied  by 
the  Supreme  Court,  and  afterwards  established  by  statute. 

The  common  carrier  of  goods  or  of  passengers  is  liable  to  third 
parties  for  any  injui'y  done  to  them  by  the  negligence  or  default 
of  the  carrier,  or  of  his  servants.^     So  he  is  for  injury  to  property 

stolen.  Held,  that  the  defendants  were  not  liable.  Tower  v.  Utica  and  Schen.  R.  R. 
Co.  7  Hill,  47.  And  see  Boys  v.  Prink,  8  C.  &  P.  361 ;  Syms  v.  Chaplin,  5  Adol.  & 
Ell.  634 ;  Cole  r.  Goodwin,  19  Wend.  251 ;  Robinson  v.  Dunmore,  2  B.  &  P.  41 G. 

1  Sparr  v.  Wellman,  11  Missouri,  230;  Mad  River,  &c.  R.  R.  Co.  v.  Fulton,  20 
Ohio,  318;  Whitesell  v.  Crane,  8  W.  &  S.  369  ;  Sneider  v.  Geiss,  1  Yeates,  34  ;  Clark 
i\  Spence,  10  Watts,  335;  Oppenheimer  v.  Edney,  9  Humph.  385;  Johnson  v.  Stone, 
11  Humph.  419. 

•  Mad  River,  &c.  R.  R.  Co.  y.  Fulton,  20  Ohio,  318;  McGill  v.  Rowand,  3  Barr, 
451. 

2  In  Pudor  r.  Boston  and  Maine  Railroad,  26  Maine,  458,  where  the  plaintiff  proved 
that  he  had  delivered  to  the  defendants  a  box  to  be  carried  to  a  certain  place  ;  that  the 
box  was  not  delivered  ;  that  he  had  made  a  demand  thereof;  and  that  the  defendants 
admitted  its  loss;  and  then  "offered  to  show,  by  his  own  testimony,  (it  not  appearing 
that  he  had  any  other  means  of  showing  it,)  what  was  in  said  box,  and  the  value  of  the 
articles,"  the  declaration  having  alleged  that  the  box  contained  medical  books,  surgical 
instruments,  and  chemical  apparatus,  it  was  held  that  the  plaintiff's  oath  was  inadmis- 
sible. And  see  Bingham  v.  Rogers,  6  W.  &  S.  495  ;  Mad  River  R.  R.  Co.  v.  Fulton, 
20  Ohio,  318. 

*  It  was  entirely  repudiated  by  the  Supreme  Court  of  Massachusetts,  in  Snow  v. 
Eastern  Railroad  Co.  12  Met.  44.  The  statute  by  which  the  legislature  interfered, 
and  made  the  law  upon  this  point  to  conform  substantially  with  what  we  have  stated, 
was  passed  1851,  chapter  147.     The  5tli  section  contains  this  provision. 

^  Thus,  in  Boss  v.  Litton,  5  C.  &  P.  407,  which  was  an  action  of  trespass  for  injuring 
the  plaintiff  by  driving  a  cart  against  him,  it  appeared  that  the  plaintiff  was  walking  in 
the  carriage-way  in  the  neighborhood  of  Islington,  about  ten  o'clock  in  the  evening, 
when  the  defendant,  who  was  driving  a  taxed  cart,  turned  out  from  behind  a  post- 
chaise,  and  drove  against  the  plaintiff,  and  knocked  him  down.  It  was  held  that  the 
plaintiff  was  entitled  to  recover.  It  was  proved  that  the  footpath  was  in  a  bad  state, 
and  seldom  used  ;  but  Lord  Denman  observed  that  "  a  man  has  a  right  to  walk  in  the 
road  if  he  pleases.  It  is  a  way  for  foot  passengers  as  well  as  carriages."  And  see 
Stables  v.  Elcv,  1  C.  &  P.  614;  Sleath  v.  Wilson,  9  C.  &  P.  607;  Joel  v.  Morrison,  6 
C.  &  P.  501  ;  Clay  r.  Wood,  5  Esp.  44;  Rathbun  v.  Payne,  19  AVend.  399  ;  Wynn  r. 
AUard,  5  W.  &  S.  524;  Cook  v.  Cham  plain  Transp.  Co.  1  Dcnio,  91;  Tonawanda 
R.  R.  Co.  V.  Manger,  5  Denio,  255 ;  Cotterill  v.  Starkey,  8  C.  &  P.  691  ;  Hawkins  v. 
Cooper,  id.  473 ;  Wynn  v.  Allard,  5  W.  &  S.  524.     And  in  Illidge  v.  Goodwin,  5  C.  & 


228  '  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XH. 

by  the  wayside,  caused  by  his  fault.^  But  the  negligence  of  the 
party  sudbring  the  injury,  if  it  was  raateriaf  and  contributed  to 
the  injury,  is  a  good  defence  for  the  carrier;  unless  malice  on  his 
part  can  be  shown!^ 

Whether  a  railroad  company  is  responsible  for  fire  set  to 
buildings  or  property  along  the  road,  without  negligence  on  its 
part,  has  been  much  considered  both  in  England  and  in  this 
country.  In  some  of  our  States  they  are  made  so  liable  by  stat- 
ute provision.  And  this  fact,  together  with  the  general  principles 
of  liability  for  injury  done,  would  seem  to  lead  to  the  conclusion 
that  they  are  not  liable  unless  in  fault,  or  unless  made  so  by 
statute.^ 

P.  190,  it  was  held  that,  if  a  horse  and  cart  are  left  in  the  street,  without  any  person  to 
watch  them,  the  owner  is  liable  for  any  damage  done  by  them,  though  it  be  occasioned 
by  the  act  of  a  passer-by,  in  striking  the  horse.     And  see  Lynch  v.  Nurdin,  1  Q.  B.  29. 

'  Cook  V.  The  Champlain  Transportation  Co.  1  Denio,  91 ;  Davies  v.  Mann,  10  M. 
&  W.  546. 

-  In  Butterfield  v.  Forrester,  1 1  East,  60,  Lord  Ellenhoroufjh  said :  "A  party  is  not 
to  cast  himself  upon  an  obstruction  which  has  been  made  by  the  fault  of  another,  and 
avail  himself  of  it,  if  he  do  not  himself  use  common  and  ordinary  caution  to  be  in  the 
right."  And  see  Cotterill  v.  Starkey,  8  C.  &  P.  691  ;  Woolf  v.  Beard,  id.  373.  And 
this  doctrine,  as  laid  down  in  tlie  text,  has  been  frequently  recognized  by  the  court,  in 
this  country.  See  Willetts  v.  Buffalo  and  Rochester  R.  R.  Co.  14  Barb.  585;  White  v. 
Winnisimmet  Co.  7  Cush.  160  :  Trow  v.  Vt.  Cent.  R.  R.  Co.  24  Vt.  487;  Brown  v. 
Maxwell,  6  Hill,  592  ;  Tonawanda  R.  R.  Co.  v.  Munger,  5  Denio,  255,  4  Corast.  349  ; 
Parker  v.  Adams,  12  Mete.  415  ;  May  v.  Princeton,  11  Met.  442  ;  Cook  v.  Champlain 
Transportation  Co.  1  Denio,  91;  Barnes  v.  Cole,  21  Wend.  188;  Rathbun  v.  Payne, 
19  Wend.  399  ;  Perkins  v.  Eastern  and  B.  and  M.  R.  R.  Co.  29  Maine,  307.  And  see 
Willoughby  r.  Horridge,  16  E.  L.  &  E.  437.  Li  Brownell  v.  Flagler,  5  Hill,  282,  it 
was  held  that,  though  the  plaintiff  was  guilty  of  negligence,  still  he  might  recover  in 
an  action  ou  the  case,  if  the  evidence  showed  intentional  wrong  on  the  part  of  the  de- 
fendant. So,  where  the  person  injured  is  incapable  of  exercising  ordinary  care  and 
caution.  Therefore,  where  the  defendant's  servant  left  a  horse  and  cart  unattended  in 
a  public  street,  and  the  plaintiff,  a  child  under  seven  years  of  age,  during  the  driver's 
absence,  climbed  on  the  wheel,  and  other  children  urged  forward  the  horse,  whereby  the 
plaintiff  was  thrown  to  the  ground  and  hurt,  it  was  held  that  the  jury  were  justified  in 
finding  a  verdict  for  the  plaintiff,  although  the  plaintiff  was  a  trespasser,  and  contributed 
to  the  injury  by  his  own  act.  Lynch  v.  Nurdin,  1  Q.  B.  29.  And  see  Birge  v.  Gardi- 
ner, 19  Conn.  507;  Robinson  v.  Cone,  22  Vt.  213.  But  see,  contra,  Hartfield  v.  Roper, 
21  Wend.  615:  Brown  v.  Maxwell,  6  Hill,  592;  Munger  v.  Tonawanda  R.  R.  Co.  4 
Comst.  349. 

'^  See  Aldridge  v.  Great  Western  Railway  Co.  2  Railway  and  Canal  Cases,  852 ; 
Cook  V.  Champlain  Transportation  Co.  1  Denio,  91.  In  Baltimore  and  Susquehanna 
R.  R.  Co.  V.  AVoodruff,  4  Maryland,  242,  it  was  held  that  the  degree  of  negligence 
requisite  to  render  a  railroad  company  liable  in  damages  for  fire  occasioned  by  its 
locomotive,  is  that  which  results  from  a  want  of  reasonable  care  and  diligence,  and  not 
that  arising  from  tlie  absence  of  the  slightest  or  least  care  and  attention.  And  see 
Railroad  Co.  v.  Yciser,  8  Barr,  366.  In  Hart  v.  The  Western  R.  R.  Co.  13  Met.  99,  a 
shop,  adjoining  a  railroad  track,  was  destroyed  by  fire  communicated  by  a  locomotive 
engine  of  the  defendants ;  and  while  the  shop  was  burning,  the  wind  wafted  spai'ks  from 
it  across  a  street,  sixty  feet,  upon  a  house,  and  set  it  on  fire,  whereby  it  was  injured. 
Held,  that  the  owner  of  the  house  was  entitled  to  recover  of  the  defendants  the  damages 
caused  by  the  fire.  Under  statute  1840,  c.  85,  §  1,  which  provides  that,  when  any  in- 
jury is  done  to  a  building  of  any  person  "by  fire  communicated"  by  a  locomotive 
engine  of  a  railroad  corporation,  the  said  corporation  shall  be  responsible,  in  damages, 


en.  XII.]  OF  THE  CARRIAGE  OF  GOODS.  229 

A  frequent  cause  of  disaster,  both  on  land  and  on  the  ocean, 
is  collision.  For  this,  a  carrier  by  land,  a  railroad  company  for 
example,  should  be  held  liable,  in  our  view  of  this  question,  unless 
the  company  could  show  that  it  took  all  possible  care  to  prevent 
the  collision ;  and  we  do  not  know  that  the  general  principles  of 
law  in  relation  to  carriers  could  lead  to  any  other  conclusion.^ 

The  common  carrier  at  sea,  whether  under  canvas  or  steam, 
must  be  held  to  a  careful,  if  not  a  strict  compliance  with  the 
rules  and  practice,  applicable  to  each  case  of  meeting  another 
vessel,  which  have  been  devised  for  the  purpose  of  preventing 
collision  ;  and  of  which  we  speak  in  our  chapter  on  the  law  of 
shipping. 

to  the  person  so  injured.  And  see  further,  upon  this  subject,  Lyman  v.  The  Boston 
and  Worcester  Kaih-oad  Co.  4  Cush.  288;  McCready  v.  The  South  Carolina  E.  R.  Co. 
2  Strobh.  356. 

1  See  Bridge  u.  Grand  Junction  Railway  Co.  3  M.  &  W.  244 :  Chaplin  v.  Hawes,  3 
C.  &  P.  554  :  Mayhew  v.  Boyce,  1  Stark.  423  ;  Monroe  v.  Linch,  7  Met.  274  ;  Churchill 
V.  Rosebeck,'l5  Conn.  359  ;  Little  Miami  R|ilroad  Co.  v.  Stevens,  20  Ohio,  415  ;  Pluck- 
Avell  V.  Wilson,  5  C.  &  P.  375  ;  Kennard  u.lBurton,  25  Maine,  39  ;  M'Lane  v.  Sharpe, 
2  Harring.  481 ;  Wordsworth  v.  Willan,  5  Esp.  273;  Turley  v.  Thomas,  8  C.  &  P.  103 ; 
Wayde  i-.  Carr,  2  D.  &  E.  255 ;  Clay  v.  Wood,  5  Esp.  44. 


20 


230  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  Xin. 


CHAPTER   XIII. 
OF  LIMITATIONS. 

SECTION  I. 

OF   THE   STATUTE   OF   LIMITATIONS. 

In  1623,  the  statute  of  21  James  I.  c.  16,  coramonly  called  the 
Statute  of  Limitations,  was  passed  in  England.  Among  its 
provisions,  it  enacts  that  all  actions  of  account,  and  upon  the 
case,  other  than  such  accounts  as  concern  the  trade  of  merchan- 
dise between  merchant  and  merchant,  their  factors  or  servants, 
all  actions  of  debt  grounded  upon  any  lending,  or  contract  with- 
out specialty,  and  all  actions  for  arrearages  of  rent,  shall  be  com- 
menced and  sued  within  six  years  next  after  the  cause  of  such 
actions  or  suit,  and  not  after. 

The  provisions  of  this  statute  were  copied,  without  much  im- 
portant variation,  in  the  statutes  of  all  our  States;  and  upon 
them,  as  they  are  explained,  and  in  some  respects  materially 
modified  by  adjudication,  the  law  of  limitation  rested,  in  Eng- 
land and  in  this  country,  until  1827,  when  the  statute  of  9 
Geo.  IV.  c.  14,  commonly  called  Lord  Tenterden's  Act,  was 
passed.  This  statute,  after  reciting  the  statute  of  James,  pro- 
vides :  "  That  in  actions  of  debt,  or  upon  the  case,  grounded  upon 
any  simple  contract,  no  acknowledgment  or  promise  by  words 
only  shall  be  deemed  sufficient  evidence  of  a  new  continuing 
contract,  whereby  to  take  a  case  out  of  the  operation  of  the  said 
enactment,  or  to  deprive  any  party  of  the  benefit  thereof,  unless 
such  acknowledgment  or  promise  shall  be  made  or  contained  by 
or  in  some  writing,  to  be  signed  by  the  party  chargeable  thereby; 
and  that,  where  there  shall  be  two  or  more  joint  contractors,  or 
executors  or  administrators  of  any  contractor,  no  such  joint  con- 


en.  XIII.]  OF   LIMITATIONS.  231 

tractor,  executor,  or  administrator,  shall  lose  the  benefit  of  said- 
enactment,  so  as  to  be  chargeable  in  respect  or  by  reason  only  of 
any  written  acknowledgment  or  promise  made  and  signed  by 
any  other  or  others  of  them ;  provided  always,  that  nothing 
herein  contained  shall  alter,  or  take  away,  or  lessen  the  effect  of 
any  payment  of  any  principal  or  interest,  made  by  any  person 
whatsoever ;  provided  also,  that  in  actions  to  be  commenced 
against  two  or  more  such  joint  contractors,  or  executors,  or  ad- 
ministrators, if  it  shall  appear  at  the  trial,  or  otherwise,  that  the 
plaintiff,  though  barred  by  the  said  recited  act  or  this  act,  as  to 
one  or  more  of  such  joint  contractors,  or  executors,  or  adminis- 
trators, shall  nevertheless  be  entitled  to  recover  against  any  other 
or  others  of  the  defendants,  by  virtue  of  a  new  acknowledgment 
or  promise,  or  otherwise,  judgment  may  be  given  and  costs  al- 
lowed for  the  plaintiff  as  to  such  defendant  or  defendants  against 
whom  he  shall  recover,  and  for  the  other  defendant  or  defendants 
against  the  plaintiff." ' 


SECTION  II. 

CONSTRUCTION   OF   THE    STATUTE. 

For  the  law  of  limitation  there  is  a  twofold  foundation.  In 
the  first  place,  the  actual  probability  that  a  debt  which  has  not 
been  claimed  for  a  long  time,  was  paid,  and  that  this  is  the 
reason  of  the  silence  of  the  creditor.^  But  besides  this  reason, 
there  is  the  inexpediency  and  injustice  of  permitting  a  stale  and 
neglected  claim  or  debt,  even  if  it  has  not  been  paid,  to  be  set  up 
and  enforced  after  a  long  silence  and  acquiescence.^  In  truth, 
these  two  reasons  mingle ;  but  as  one  or  the  other  prevails,  its 
effect  is  seen  in  the  construction  of  this  law,  and  in  its  applica- 
tion to  cases. 

1  Statutes  substantially  similar  have  been  passed  in  Maine,  Massachusetts,  Vermont, 
New  York,  Indiana,  Michigan,  A^^lcansas,  and  California. 

2  "  The  Statute  of  Limitations  is  a  bar,  on  the  supposition,  after  a  certain  time,  that  a 
debt  has  been  paid,  and  vouchers  lost ;  and  wherever  it  appears,  by  the  acknowledgment 
of  the  party,  that  it  is  not  paid,  that  takes  the  case  out  of  the  statute."  Per  Baijloj,  J., 
in  Clark  v.  Hougham,  2  B.  &  Cr.  1 54. 

8  Thus,  in  Dickson  v.  Thomson,  2  Show.  125,  where  the  claim  was  more  than  six 
years  old,  it  was  held  that  the  confession  or  acknowledgment  of  the  debt  within  six 
years  was  not  sufficient  to  renew  the  claim.  See  also,  Lacon  v.  Briggs,  3  Atk.  105; 
Bass  V.  Smith,  12  Vin.  Abr.  229,  pi.  4. 


232  ELEMENTS   OF  MERCANTILE   LAW.  [CIL  Xni. 

If,  for  example,  the  statute  is  considered  as  only  a  statute  of 
presumption,  or,  in  other  words,  if  it  is  supposed  to  say  that  a 
debt  which  is  six  years  old,  shall  not  be  demanded,  because  the 
law  presumes  that  so  old  a  debt  must  have  been  paid,  it  is  ob- 
vious that  courts  will  look  to  the  evidence  offered  to  meet  the 
law,  mainly  for  the  purpose  of  requiring  that  it  shall  rebut  this 
•presumption,  by  proving  that  the  debt  still  exists.^  And  in  this 
view,  and  for  this  purpose,  any  acknowledgment  or  admission  of 
the  mere  existence  of  the  debt,  by  the  debtor,  would  be  sufficient 
to  do  away  with  the  law.^  If,  however,  courts  regarded  the 
statute  rather  as  a  statute  of  repose,  or,  in  other  words,  as  in- 
tended to  prevent  the  enforcement  of  stale  claims,  whether  they 
were  paid  or  not,  then  it  is  obvious  that  a  mere  admission  that 
the  debt  was  legal  and  remains  unpaid,  amounts  to  nothing. 
The  law  says  it  has  remained  unpaid  so  long,  that  it  is  too  late 
now  to  bring  it  forward.^  But  if  the  debtor  is  willing  to  waive 
the  protection  of  the  law,  and  not  only  acknowledges  the  debt, 
but  promises  to  pay  it,  there  is  no  reason  why  he  should  not  be 
held  upon  this  promise. 

Between  these  two  views,  it  may  be  said  that  the  courts  have 
fluctuated  from  the  beginning.  As  soon  as  the  statute  was 
passed,  whenever  it  was  pleaded  by  the  defendant  in  bar  of  the 
action,  if  the  plaintiff  sought  to  remove  this  bar  by  any  words  of 


1  la  Bryan  v.  Horseman,  5  Esp.  81,  evidence  was  offered  that  the  defendant  said 
that  he  had  no  recollection  of  the  debt,  but  relied  on  the  statute ;  and  this  was  not  con- 
sidered sufficient  to  rebut  the  presumption  that  a  debt  of  above  six  years'  standing  was 
paid.  See  also,  Beale  v.  Nind,  4  B.  &  Aid.  568  ;  Lloyd  v.  Maund,  2  T.  R  760;  Clark 
V.  Hougham,  2  B.  &  Cr.  149 ;  Frost  v.  Bengough,  1  Bing.  266 ;  East  India  Co.  v. 
Prince,  Ry.  &  M.  407. 

2  In  Truman  v.  Fenton,  Cowper,  548,  Lord  Mansfield  said  :  "  The  slightest  acknowl- 
edgment has  been  held  sufficient  to  rebut  the  presumption  that  an  old  debt  has  been 
paid  ;  as  saying,  '  Prove  your  debt  and  I  will  pay  you ; '  '  I  am  ready  to  account,  but 
nothing  is  due  to  you ; '  and  much  slighter  acknowledgments  than  these  will  take  a 
case  out  of  the  statute."  And  see  Yea  v.  Fouraker,  2  Burr.  1099  ;  Richardson  v.  Fen, 
Lofft,  86  ;  Catling  v.  Skoulding,  6  T.  R.  189  ;  Lawrence  v.  Warrall,  Peake,  N.  P.  93  ; 
Clarke  v.  Bradshaw,  3  Esp.  155  ;  Eucker  v.  Hannaj',  4  East,  604,  n.  (a) ;  Gainsford  v. 
Grammar,  2  Camp.  9;  Leaper  v.  Tatton,  16  East,  420;  Loweth  v.  Fothergill,  4  Camp. 
184;  Dowthwaitc  v.  Tibbut,  5  M.  &  Scl.  75;  Triggs  v.  Newnham,  1  C.  &  P.  631; 
Sluby  r.  Champlin,  4  Johns.  401 ;  De  Forest  v.  Hunt,  8  Conn.  179 ;  Glenn  v.  McCullough, 
Harper,  484;  Burden  v.  M'Elhenny,  2  Nott  &  Mc Cord,  60;  Shcftall  v.  Clay,  E.  M. 
Charlt.  7  ;  Aiken  v.  Benton,  2  Brevard,  330. 

^  In  Tanner  v.  Smart,  G  B.  &  Cr.  603,  Lord  Tenterden,  after  reviewing  the  authori- 
ties on  this  point,  says :  ''AH  these  cases  proceed  upon  the  principle  that,  under  the 
ordinary  issue  on  the  Statute  of  Limitations,  an  acknowledgment  is  only  evidence  of  a 
promise  to  pay ;  and  unless  it  is  conformable  to,  and  maintains  the  promises  in  the 
declaration,  though  it  may  show  to  demonstration  that  the  debt  has  never  been  paid, 
and  is  still  subsisting,  it  has  no  effect." 


CH.  XIII.]  OF   LIMITATIONS.  233 

the  defendant,  he  was  obliged  to  allege  in  his  replication  "  a  new 
promise"  by  the  defendant.  This  rule  of  pleading  remains  good 
to  the  present  day,  wherever  the  old  system  of  pleading  is  in  force. 
And  it  tends  to  show  that,  at  the  beginning,  the  statute  was  re- 
garded as  a  statute  of  repose,  which  could  not  be  set  aside  by  a 
mere  acknowledgment  that  the  debt  was  unpaid.  But,  although 
the  rule  itself  indicates  this,  the  practice  of  the  courts  took  the 
opposite  direction.  An  impression  prevailed,  not,  perhaps,  at  the 
beginning,^  but  early,  and  continued  long,  that  the  statute  itself 
was  not  to  be  favored,^  that  a  resort  to  it  was  generally  a  dis- 
honorable attempt  to  escape  the  payment  of  a  just  debt;  and 
that  the  court  should  give  its  aid  to  the  creditor  who  endeavored 
to  do  away  the  effect  of  this  law.  Such  language  as  this  was 
not  used,  but  such  was  the  practice ;  and,  accordingly,  any  sort 
of  acknowledgment,  proved  in  almost  any  way,  was  permitted  to 
remove  the  bar  of  the  statute.^ 

At  length,  however,  a  different,  and,  as  we  think,  a  far  more 
just  and  rational  view  prevailed.  It  began  to  be  admitted  by  the 
profession  and  by  the  courts,  although  it  never  has  been,  perhaps, 
by  the  community,  that  it  was  a  necessary  and  beneficial  law,  to 
be,  if  not  favored,  at  least  applied  fairly  and  rationally,  and  per- 
mitted to  do  its  very  useful  work  in  suppressing  stale  claims.* 


1  In  Green  v.  Rivett,  2  Salk.  422,  the  Court  of  King's  Bench  said :  "  The  Statute  of 
Limitations,  on  which  the  security  of  all  men  depends,  is  to  be  favored." 

2  Willett  V.  Atterton,  1  Wm.  Bl.  35;  Perkins  v.  Burbauk,  2  Mass.  81. 

3  Thus,  in  Leaper  v.  Tatton,  1 6  East,  420,  in  assumpsit  against  the  defendant,  as  ac- 
ceptor of  a  bill  of  exchange,  and  upon  an  account  stated,  evidence  that  the  defendant 
acknowledged  his  acceptance,  and  tiiat  he  had  been  liable,  but  said  that  he  was  not 
liable  then,  because  it  was  out  of  date,  and  that  he  could  not  pay  it,  was  held  sufficient 
to  renew  the  claim.  And  see  Richardson  v.  Fen,  Lofft,  86 ;  Lloyd  v.  Maund,  2  T.  E. 
760;  Bryan  v.  Horseman,  4  East,  599  ;  Clark  v.  Hougham,  2  B.  «S;  Cr.  154  ;  Mount- 
Stephen  V.  Brooke,  3  B.  &  Aid.  141.     See  also  ante,  p.  232,  n.  2. 

*  In  Spring  v.  Gray,  5  Mason,  523,  Stori/,  J.,  said  :  "I  consider  the  Statute  of  Limita- 
tions a  iiighly  beneficial  statute,  and  entitled,  as  such,  to  receive,  if  not  a  liberal,  at  least 
a  reasonable  construction,  in  furtlicrance  of  its  manifest  object.  It  is  a  statute  of 
repose  ;  the  object  of  which  is,  to  suppress  fraudulent  aud  stale  claims  from  springing 
up  at  great  distances  of  time,  and  surprising  the  parties,  or  their  representatives,  when 
all  tiic  proper  evidence  and  voucliers  are  lost,  or  the  facts  have  become  obscure,  from  the 
lapse  of  time,  or  the  defective  memory,  or  death,  or  removal  of  witnesses.  The  de- 
fence, therefore,  whicli  it  puts  forth,  is  an  honorable  defence,  which  does  not  seek  to 
avoid  the  payment  of  just  claims  or  demands,  admitted  now  to  be  due,  but  which  en- 
counters, in  the  only  practicable  manner,  such  as  are  ancient  and  unacknowledged ; 
and,  whatever  may  have  been  their  original  validity,  such  as  are  now  beyond  the  power 
of  the  party  to  meet,  with  all  the  proper  vouchers  and  evidence  to  repel  them.  The 
natural  presumption  certainly  is,  that  claims  wliich  have  been  long  neglected,  are  un- 
founded, or  at  least  are  no  longer  subsisting  demands.  And  this  presumption  the 
Statute  has  erected  into  a  positive  bar.  There  is  wisdom  and  policy  in  it,  as  it  quickens 
the  diligence  of  creditors,  and  guards  innocent  persons  from  being  betrayed  by  their 

■  20* 


234  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XIII. 

These  views  are  now  very  general,  both  in  the  English  courts 
and  in  our  own.  One  effect  of  them  was  Tenterden's  Act,  which 
we  have  given  already,  and  which,  as  may  be  seen,  guards 
against  the  admission  of  loose  and  uncertain  testimony  in  proof 
of  a  new  promise. 

Before  inquiring  into  the  rules  of  law  which  now  apply  to  the 
case  of  an  acknowledgment  or  new  promise,  it  should  be  re- 
marked that  a  prescription,  or  limitation,  much  more  ancient  than 
the  statutes  above  quoted,  is  still  in  full  force.  This  is  the  pre- 
sumption of  payment  after  twenty  years,  which  is  applicable  to 
all  debts ;  not  only  the  simple  contracts  to  which  these  statutes 
refer,  but  to  specialties,  or  contracts  or  debts  under  seal  or  by 
judgment  of  court.^  Of  these  it  will  not  be  necessary  to  speak 
here,  excepting  to  remark  that  in  one  or  two  of  our  States,  the 
statute  of  limitation  excepts  a  promissory  note  which  is  signed 
in  the  presence  of  an  attesting  witness,  and  is  put  in  suit  by  the 
original  payee,  or  his  executor  or  administrator.^     Bank-bills  and 


ignorance,  or  their  over-confidence  iu  regard  to  transactions  which  have  hecomc  dim 
by  age.  Yet,  I  well  remember  the  time  when  courts  of  law  exercised  what  I  cannot 
but  deem  a  most  unseemly  anxiety  to  suppress  the  defence;  and  when,  to  the  reproach 
of  the  law,  almost  every  effort  of  ingenuity  was  exhausted  to  catch  up  loose  and  inad- 
vertent phrases  from  the  careless  lips  of  the  supposed  debtor,  to  construe  them  into 
admissions  of  the  debt.  Hajjpily,  that  period  has  passed  away;  and  judges  now  confine 
themselves  to  the  more  appropriate  duty  of  construing  tlie  statute,  rather  than  devising 
means  to  evade  its  operation."  In  A' Court  v.  Cross,  3  Bing.  329,  defendant,  being 
arrested  on  a  debt  more  than  six  years  old,  said  :  "  I  knoAV  that  I  owe  the  money,  but 
the  bill  I  gave  is  on  a  three  penny  stamp,  and  I  will  never  pay  it ; "  and  it  was  held 
that  such  an  acknowledgment  of  a  debt  would  not  revive  it  against  a  plea  of  the  statute. 
So,  in  Ayton  v.  Bolt,  4  Bing.  105.  And  in  Tanner  v.  Smart,  6  B.  &  Cr.  G03,  in 
assumpsit,  brought  to  recover  a  sum  of  money,  it  was  proved,  in  answer  to  the  plea  of 
the  Statute  of  Limitations,  that  the  defendant  said  within  six  years,  "  I  cannot  pay  the 
debt  at  present,  but  I  will  pay  it  as  soon  as  I  can ; "  held,  that  this  acknowledgment  was 
not  sufficient  to  entitle  the  plaintiff  to  a  verdict,  no  proof  being  given  of  the  defendant's 
ability  to  pay.  In  Hart  v.  Prendergast,  I-l  M.  &  W.  741,  defendant,  on  being  requested 
to  pay  his  debt,  wrote  the  following  letter  to  the  plaintiff's  clerk:  "I  will  not  fail  to 
meet  Mr.  H.  on  fair  terms,  and  have  now  a  hope  that,  before,  perhaps,  a  week  from  this 
date, 'I  shall  have  it  in  my  power  to  pay  him,  at  all  events,  a  portion  of  the  debt,  when 
we  shall  settle  about  the  liquidation  of  the  balance."  Held,  that  this  letter  was  not 
sufficient  to  defeat  a  plea  of  the  Statute  of  Limitations.  And  Parke,  B.,  said  :  "  There 
is  no  doubt  of  the  principle  of  law  applicable  to  these  cases,  since  the  decision  in  Tanner 
V.  Smart;  namcl}',  that  the  plaintiff  must  cither  show  an  unqualified  acknowledgment 
of  the  debt,  or,  if  he  show  a  promise  to  pay,  coupled  with  a  condition,  he  must  show 
performance  of  the  condition ;  so  as  in  either  case  to  fit  the  promise  laid  in  the  declara- 
tion, which  is  a  promise  to  pay  on  request.  The  case  of  Tanner  v.  Smart,  put  an  end 
to  a  series  of  decisions  which  were  a  disgrace  to  the  law,  and  I  trust  we  shall  be  in  no 
danger  of  falling  into  the  same  course  again." 

1  See  Christophers  v.  Sparke,  2  Jac.  &  Walk.  223;  Duffield  v.  Creed,  5  Esp.  52; 
Cooper  V.  Turner,  2  Stark.  407. 

-  This  is  the  case  in  Massachusetts.    Walker  v.  Warfield,  6  Met.  466;  Earle  v.  Reed, 


en.  XIII.]  or  LIMITATIONS.  235 

other  evidences  of  debt  issued  by  banks,  are  everywhere  excepted 
from  the  operation  of  the  statute.' 


SECTION  III. 

*  OF    THE    NEW   PROMISK. 

The  first  question  we  propose  to  consider,  is,  what  is  the  new 
promise  which  suffices  to  take  a  case  out  of  the  statute.  If  the 
promise  be  made,  the  former  debt,  although  not  in  itself  enforce- 
able, is  considered  a  sufficient  consideration  for  the  new  promise.^ 
This  might  be  made  as  well  orally  as  in  writing,  until  Lord 
Tenterderi's  Act.  But,  although  this  act  requires,  as  matter  of 
evidence,  that  the  new  promise  shall  be  in  writing,  it  does  not 
affect  at  all  any  question  respecting  the  character  or  sufficiency 
of  the  new  promise ;  they  remain  to  be  decided  by  the  same 
principles,  and  in  the  same  manner  as  before.^ 

The  first  thing  to  be  said,  is,  that  now,  by  the  general  consent 
of  the  courts  of  this  country  and  of  England,  a  mere  acknowl- 
edgment, which  does  not  contain  by  any  reasonable  implication 
or  construction,  a  new  promise,  and  still  more,  if  it  expressly 
excludes  a  new  promise,  is  not  sufficient.'^     A  new  promise  is 

10  id.  387  ;  Drmy  v.  Vannevar,  1  Cush.  276  ;  Rockwood  v.  Browne,  1  Gray,  261.  And 
in  Maine.     Boody  v.  Lunt,  19  Maine,  72  ;   Stone  v.  Nichols,  23  Maine,  497. 

1  Dougherty  v.  The  Western  Bank  of  Georgia,  13  Geo.  287. 

-  Geer  v.  Archer,  2  Barb.  424. 

8  Thus,  in  Morrell  v.  Frith,  3  il.  &  W.  405,  the  defendant  stated,  in  a  letter,  that  he 
daily  expected  to  be  able  to  give  a  satisfactory  reply  to  the  plaintiff's  demand  ;  and 
although  this  was  iu  writing,  Parke,  B.,  said :  "  The  document,  in  order  to  take  the 
case  out  of  the  statute,  must  either  contain  a  promise  to  pay  the  debt  on  request,  or 
acknowledgment  from  which  such  promise  is  to  be  inferred.''  And  sec  Haydon  u. 
Williams,  7  Bing.  160,  167. 

*  In  the  leading  American  case  upon  this  point.  Bell  v.  Morrison,  1  Pet.  351,  which 
was  assumpsit  for  goods  sold  and  delivered,  it  was  proved,  in  answer  to  the  plea  of  the 
statute  of  limitations,  that  the  defendant,  "one  of  the  partners  of  a  firm  then  dissolved, 
said  to  the  plaintiff:  "I  know  we  are  owing  you  ;"  "I  am  getting  old,  and  I  wish  to 
have  the  business  settled : "  it  was  held  that  these  expressions  were  insufficient  to  revive 
the  delit.  So,  in  Ventris  v.  Shaw,  14  N.  II.  422,  assumpsit  on  a  promissory  note,  de- 
fendant, on  being  asked  to  pay  the  note,  said :  "  He  guessed  the  note  was  outlawed,  but 
that  would  make  no  dittcrence,  he  was  willing  to  pay  his  honest  debts,  always."  As 
he  did  not  state  in  direct  terms  that  he  was  willing  to  pay  the  note,  this  was  held  not 
sufficient  to  revive  the  debt.  And  see  Laforge  v.  Jayne,  9  Penn.  St.  410;  Mitchell  v. 
Sellman,  5  Maryl.  376;  Butler  v.  Winters,  2  Swan,  (Tcnn.)  91  ;  Ross  v.  Ross,  20  Ala, 
105  ;  Sherman  v.  "Wakeman,  11  Barb.  254;  Brainard  v.  Buck,  25  Vt.  573;  Williams 
I'.  Griffith,  3  Exch.  335  ;  Hard  r.  Prcndergast,  14  M.  &  ^Y.  741.  In  Deloach  r.  Turner, 
7  Richardson,  143,  it  was  licld  that  a  slight  acknowledgment,  made  before  the  statutory 
period  is  complete,  is  sufficient  to  take  the  case  out  of  the  statute.    But  in  Tompkins 


236  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XIII. 

not  now  implied  by  the  law  itself,  from  a  mere  acknowledg- 
raent.i 

Whether  an  acknowledgment  of  an  existing  debt  is  sufficient 
to  take  it  out  of  the  statute,  or,  in  other  words,  whether  it  carries 
with  it  a  promise  to  pay  that  debt,  is  a  question  of  law  for  the 
court,  when  it  is  only  a  question  as  to  the  legal  meaning  and 
effect  of  the  words  used,  for  this  would  be  a  mere  question  of 
construction  ;  which  is  always  a  matter  of  law  only.^  But  if  the 
question  is  as  to  what  words  were  used,  and  what  was  the  inten- 
tion of  the  parties  to  be  gathered  from  the  words  and  acts,  this  is 
a  question  of  fact,  and  it  is  for  the  jury  to  determine. 

The  acknowledgment  need  not  define  the  amount  of  the  debt.^ 
That  can  be  done  by  evidence,  if  only  the  existence  of  the  debt 
and  the  purpose  of  paying  it  are  acknowledged.  Still,  the  ac- 
knowledgment must  be  of  the  specific  debt,  or  must  distinctly 
include  it;'^    if  wholly  general  and  undefined,  it  is  not  enough.^ 

V.  Brown,  1  Dcnio,  247,  where  a  conditional  promise  was  made  for  the  payment  of  a 
debt  lieforc  the  six  years  had  expired,  it  was  held  that  the  law  was  the  same,  whether 
the  promise  or  acknowledgment  was  made  before  or  after  the  statute  had  barred  the 
demand.  And  see  Dean  v.  Hewitt,  5  Wend.  257;  Watkins  v.  Stevens,  4  Barb.  168; 
Shoemaker  V.  Benedict,  1  Kernan,  176. 

1  As,  "  I  should  be  happy  to  pay  if  I  could,"  Ay  ton  i'.  Bolt,  4  Bing.  105  ;  or,  "  I  have 
no  recollection  of  the  debt,  but  rely  on  the  statute,"  Bryan  v.  Horseman,  5  Esp.  81 ;  or 
such  other  acknowledgments  from  whicii  a  court  or  jury  might  be  led  to  believe,  or 
from  which  it  might  be  legally  implied,  that  the  debt  has  not  been  paid ;  but  in  which 
the  law  can  find  no  promise  to  pay,  either  expressed  or  implied.  See  Tanner  v.  Smart, 
6  B.  &  Cr.  603,  and  Bell  v.  Morrison,  1  Pet.  351,  in  which  this  doctrine  was  fully 
established  by  Lord  Tenterden  and  Justice  Story.  And  see  Sherman  v.  Wakeman,  1 1 
Barb.  254  ;  lloutlcdge  v.  Ramsay,  8  Ad.  &  El.  221 ;  Smith  v.  Thorn,  10  Eng.  Law  and 
Eq.  391 ;  Morgan  v.  Walton,  4  Penn.  St.  321 ;  Gilkyson  v.  Larue,  6  Watts  &  Serg.  213. 

-  In  Lloyd  v.  Maund,  2  T.  R.  760,  the  acknowledgment  was  contained  in  a  letter, 
and  yet,  the  question  whether  the  acknowledgment  was  sufiicient,  was  submitted  to 
the  jury.  The  same  course  was  pursued  in  Frost  v.  Bengough,  1  Bing.  266,  and  in 
Bird  V.  Gammon,  3  Bing.  N.  C.  883.  But  the  authority  of  these  cases  was  much  shaken, 
if  not  entirely  overthrown,  by  the  case  of  Morrell  v.  Frith,  3  ]M.  &  W.  402,  where  Parke, 
B.,  said:  "If  I  am  called  upon  to  give  an  opinion,  I  think  the  case  of  Lloyd  v.  Maund, 
is  not  law.  The  construction  of  a  doubtful  instrument  itself  is  not  for  the  jury,  al- 
though the  facts  by  which  it  may  be  explained,  are."  See  Clarke  v.  Dutcher,  9  Cow. 
674;  Martin  v.  Broach,  6  Geo.  21.     See  2  Parsons  on  Contracts,  4,  5. 

'^  Thus,  in  Dickinson  v.  Hatfield,  1  M.  &  Rob.  141,  the  plaintiff  produced  a  letter 
from  the  defendant,  in  which  he  promised  to  pay  "  the  balance"  due  from  him  to  the 
plaintiff,  but  did  not  specify  any  particular  amount.  Held,  that  it  was  not  necessary 
that  the  amount  of  the  debt  should  be  specified.  And  see,  to  the  same  effect,  Lechmere 
V.  Fletcher,  1  Cr.  &  M.  623 ;  Bird  v.  Gammon,  3  Bing.  N.  C.  883;  Williams  v.  Griffith, 
3  Exch.  335  ;  Gardner  v.  M'Mahon,  3  Q.  B.  561 ;  Waller  v.  Lacy,  1  M.  &  G.  54  ;  Ilazle- 
baker  v.  Reeves,  12  Penn.  St.  264;  Dinsniorc  v.  Dinsmore,  21  Maine,  433;  Davis  v. 
Steiner,  14  Penn.  St.  275. 

*  See  Barnard  i-.  Bartholomew,  22  Pick.  291;  Clark  v.  Dutcher,  9  Cow.  674;  Staf- 
ford V.  Bryan,  3  Wend.  532;  Arey  v.  Stephenson,  11  Ired.  86;  Martin  v.  Broach,  6 
Geo.  21.  But  if  only  one  debt  is  shown  to  exist,  the  acknowledgment  will  be  presumed 
to  refer  to  that.     Woodbridge  v.  Allen.  12  Met.  470  ;  Guy  r.  Tams,  6  Gill.  82. 

5  In  Bobbins  v.  Farley,  2  Strobh.  348,  the  defendant's  intestate  said  to  her  attorney, 


en.  XIII.]  OF   LIMITATIONS.  237 

A  testator  who  provides  for  the  payment  of  his  debts  generally, 
does  not  thereby  make  a  new  promise  as  to  any  one  of  them.^ 

If  the  new  promise  is  conditional,  the  party  relying  upon  it 
must  be  prepared  to  show  that  the  condition  has  been  fulfilled.^ 
Even  if  it  is  wholly  unconditional  and  unqualified  in  its  terms,  it 
is  competent  for  the  defendant  to  show,  by  the  attendant  circum- 
stances or  other  proper  evidence,  that  it  was  not  intended,  nor 
understood  as  an  acknowledgment  or  a  promise.^  On  the  other 
hand,  if  the  expressions  in  themselves  are  doubtful,  the  plaintiff 
may  make  them  clear  by  evidence. 

As  the  acknowledgment  should  be  voluntary,  we  doubt  whether 
those  made  under  process  of  law,  as  by  a  bankrupt,  or  by  answers 
to  interrogatories  which  could  not  be  avoided,  should  ever  have 
the  effect  of  a  new  promise.* 

A  doctrine  has  prevailed,  and,  perhaps,  has  at  present  the 
weight  of  authority  in  its  favor,  according  to  which  every  new 
item  and  credit  in  a  mutual  and  running  account,  is  an  acknowl- 
edgment, by  the  party  making  it,  that  the  account  is  open  and 
unsettled,  and  so  draws  after  it  all  preceding  items  as  to  have 
the  same  effect  as  a  recognition  of  them,  and  a  promise  to  pay 
the  balance,  when  that  should  be  struck.  This  doctrine  grew 
up,  we  think,  in  those  days  when  courts  disliked  the  Statute  of 

"  that  the  phxintiif  was  to  receive  compensation  for  his  services  "  to  her,  and  "  that  she 
had  never  paid  him."  Held,  that  such  an  acknowledgment  was  too  general  to  remove 
the  bar  of  the  Statute  of  Limitations.  And  see  Moore  v.  H3'man,  13  Ired.  272  ;  Shaw 
V.  Allen,  1  Busbee,  (N.  Car.)  58 ;  McBride  v.  Gray,  id.  420 ;  Harbald  v.  Kuntz,  16 
Penn.  St.  210. 

1  Bloodgood  V.  Bruen,  4  Sandf.  427;  Carrington  v.  Manning,  13  Ala.  611  ;  Braxton 
V.  Wood,  4  Gratt.  25 ;  Murray  v.  Mechanics'  Bank,  4  Edw.  Ch.  567;  Evans  w.  Tweedy, 
1  Beav.  55 ;  Walker  v.  Campbell,  1  Hawks,  304 ;  Freake  v.  Cranefeldt,  3  My.  .&  Cr. 
499. 

2  Tanner  v.  Smart,  6  B.  &  Cr.  603;  Tompkins  v.  Brown,  1  Denio,  247;  Ayton  v. 
Bolt,  4  Bing.  105;  Haydon  v.  Williams,  7  Bing.  163;  Humphreys  v.  Jones,  14  M.  & 
W.  1;  Laforge  v.  Jayne,  9  Penn.  St.  410;  Sherman  v.  Wakeman,  11  Barb.  254;  Hill 
V.  Kendall,  25  Vt.  528 ;  Butterfield  v.  Jacobs,  15  JSF.  H.  140. 

3  Cripps  V.  Davis,  12  M.  &  W.  159. 

*  In  Brown  v.  Bridges,  2  Miles,  424,  where  the  defendant,  as  an  insolvent  debtor, 
had  stated  a  claim  against  him  in  a  schedule  of  his  debts,  it  was  held  that  such  an 
acknowledgment  is  not  sufficient  to  take  the  case  out  of  the  statute.  And  the  court 
said:  "An  acknowledgment  of  a  debt,  to  prevent  the  operation  of  the  Statute  of  Limita- 
tions, must  at  least  be  consistent  with  a  promise  to  pay.  Tliis  is  the  law  of  Pennsyl- 
vania. The  acknowledgment  in  defendant's  petition  for  the  benefit  of  tlie  insolvent 
laws,  is  not  of  this  cliaracter;  for,  tlie  very  basis  on  which  an  insolvent  asks  his 
discharge,  is,  that  he  is  unable  to  pay  his  debts.  How  this  can  be  tortured  into  a  prom- 
ise to  pay,  or  as  being  consistent  with  such  a  promise,  we  are  at  a  loss  to  discover." 
And  sec,  to  the  same  cfiFect,  Christy  r.  Flemington,  10  Penn.  St.  129  ;  Kennett  v.  Mil- 
bank,  8  Bing.  33  ;  Wcllman  v.  Southard,  30  Maine,  425  ;  Pott  v.  Clegg,  16  M.  &  W. 
321.    But  see  the  opposite  doctrine,  in  Eicke  v.  Nokes,  1  M.  &  Pob.  359. 


238 


ELEMENTS    OP   MERCANTILE   LAW. 


[cH.  xni. 


Limitations,  and  sought  opportunities,  or  at  least  favored  at- 
tempts, to  defeat  it.  Such  is  not  the  view  of  courts  at  present; 
and  we  should  say  that  the  general  principles  now  prevalent, 
would  eventually  limit  this  doctrine  to  cases  where  the  account 
was  mutual  and  open,  and  there  was  evidence  that  the  items 
relied  upon  were  intended  to  be  charged  in  offset,  so  as  to  have 
the  effect  of  a  part-payment.^ 


SECTION  IV. 


OF   PART-PAYMENT. 


A  part-payment  of  a  debt  is  such  a  recognition  of  it  as  implies 
a  new  promise  ;2  even  if  it  be  made  in  goods  or  chattels,  if 
agreed  to  be  received  as  payment,'^  or  by  negotiable  promissory 
note  or  bill.*     But  it  has  this  effect  only  when  the  payment  is 

1  In  a  leading  case  upon  this  point,  Catling  v.  Skoulding,  6  T.  R.  189,  it  was  held, 
that  if  there  be  a  mutual  account  of  any  sort  between  the  plaintiff  and  defendant,  for  an 
item  of  which  credit  has  been  given  within  six  years,  it  is  evidence  that  there  is  an  open 
account  between  the  parties,  and  a  promise  to  pay  the  balance,  which  would  remove 
the  bar  of  the  statute.  See  the  decision  of  Lord  Kenyon  in  this  case,  which  is,  perhaps, 
consistent  with  the  views  then  prevailing  in  respect  to  new  promises  and  acknowledg- 
ments ;  but  it  is  submitted  that  it  cannot  be  sustained  upon  principle  since  the  decision 
in  Tanner  v.  Smart,  in  England,  and  Bell  v.  Morrison,  in  this  country.  And  a  more 
distinct  line  is  drawn  in  Blair  v.  Drew,  6  N.  H.  235,  where  it  is  shown  that  new  items, 
in  mutual  accounts,  within  six  years  next  before  action  brought,  do  not,  of  themselves, 
constitute  an  admission  of  an  unsettled  account,  extending  beyond  six  years,  nor 
furnish  any  evidence  of  a  promise  to  pay  a  balance,  so  as  to  take  the  case  out  of  the 
Statute  of  Limitations.  The  same  view  is  adopted  in  Kentucky.  Lansdale  v.  Brashear, 
3  Monr.  330;  Smith  v.  Dawson,  10  B.  Monr.  112;  and  in  Tennessee,  Craighead  v. 
The  Bank,  7  Yerg.  399.  It  must,  however,  be  admitted  that  the  main  current  of 
American  decisions  is  still  in  accordance  with  Catlin  v.  Skoulding.  Sec  Abbott  v. 
Keith,  11  Vt.  529  ;  Hodge  v.  Manley,  25  id.  210  ;  Cogswell  v.  DoUivcr,  2  Mass.  217; 
Kimball  v.  Brown,  7  Wend.  322  ;  Chamberlin  v.  Cuyler,  9  id.  126  ;  Sickles  v.  Mather, 
20  id.  72  ;  Todd  v.  Todd,  15  Ala.  743  ;  Wilson  v.  Calvert,  18  id.  274.  This  question 
was  set  at  rest  in  England,  by  Lord  Tenterdenh  Act,  veiy  soon  after  Tanner  v.  Smart 
was  decided.  See  Williams  v.  Griffiths,  2  Cr.  M.  &  Ros.  45 ;  IMills  v.  Fowkes,  7  Scott, 
444  ;  Cottam  v.  Partridge,  4  Scott,  N.  R.  819.  The  cases  cited  above  must  not  be  con- 
founded with  the  cases  concerning  "'  merchants'  accounts,"  which  will  be  considered 
hereafter. 

"  In  AVhipple  v.  Stevens,  2  Foster,  219,  the  court  said:  "It  is  avcU  settled  that  a 
partial  payment  of  a  debt  amounts  to  an  acknowledgment  of  a  present  subsisting  debt, 
whicii  the  party  is  liable  and  willing  to  jjay ;  from  which,  in  the  absence  of  any  act  or 
declaration,  on  the  part  of  the  party  making  the  payment,  inconsistent  with  the  idea  of 
a  liability  and  willingness  to  pay,  a  jury  may  and  ought  to  infer  a  new  promise." 

^  In  Hooper  v.  Stephens,  4  Ad.  &  El.  7l"  where  defendant  owed  plaintiff  for  hay, 
and  gave  him,  as  part-payment  of  it,  a  gallon  of  gin,  which  plaintifl"  received  as  such ; 
held,  that  such  part-payment  was  sufficient  to  take  the  original  debt  out  of  the  statute. 
And  see  Cottam  v.  Partridge,  4  Scott,  N.  R.  819  ;  Hart  v.  Nash,  2  Cr.  M.  &  Ros.  337. 

*  It  was  so  held  in  Ilsley  v.  Jewett,  2  Met.  168;  but  the  decision  was  put  upon  the 
ground  that,  in  Massachusetts,  tlie  giving  of  such  note  or  bill  is  prima  facie  evidence  of 
payment  and  discharge  of  the  debt  for  which  it  was  given.    A  similar  decision,  how- 


CII.  XTII.]  OF   LIMITATIONS.  239 

made  as  of  a  part  of  a  debU  If  it  is  made  in  settlement  of  the 
whole,  of  course  it  is  no  promise  of  more.  And  a  bare  payment, 
without  words  or  acts  to  indicate  its  character,  would  not  be 
construed  as  carrying  with  it  an  acknowledgment  that  more  was 
due  and  would  be  paid.^ 

If  a  debtor  owes  several  debts,  and  pays  a  sum  of  money,  he 
has  the  right  of  appropriating  that  money  as  he  pleases.  If  he 
pays  it  without  indicating  his  own  appropriation,  the  general 
rule  is,  that  the  creditor  who  receives  the  money,  may  appropri- 
ate it  as  he  will.^  There  is,  however,  this  exception.  If  there  be 
two  or  more  debts,  some  of  which  are  barred  by  the  statute,  and 
others  are  not  barred  by  it,  the  creditor  cannot  appropriate  the 
payment  to  a  debt  that  is  barred,  for  the  purpose  of  taking  it  out 
of  the  statute  by  such  part-payment.^  If  a  debt  consists  of  both 
principal  and  interest,  a  payment  specifically  on  account  of  either 
of  these,  will  take  the  remainder  of  that  and  the  whole  of  the 
other  out  of  the  statute.^  If  mutual  accounts  are  settled,  and  a 
balance  struck,  all  the  items  which  are  within  the  admitted  ac- 

cver,  has  been  made  in  the  j-ecent  case  of  Turney  v.  Dodwell,  24  Eng.  Law  and  Eq.  92, 
in  Enghmd,  where  no  such  rule  prevails.  Tliat  was  an  action  on  a  promissory  note, 
by  the  payee  against  the  maker.  The  defendant  gave  the  plaintiff,  on  the  5th  of  May, 
1843,  a  note  for  £108  15s.  In  February,  1848,  the  defendant  accepted  a  bill  of  ex- 
change drawn  on  him  by  the  plaintiff,  for  £30,  in  part-payment  of  the  note ;  and  this 
was  held  sufficient  to  take  the  case  out  of  the  statute.  Lord  Camphell  said :  "  In  mer- 
cantile transactions,  nothing  is  more  usual  than  to  stipulate  for  a  payment  by  bills, 
where  there  is  no  intention  of  their  being  taken  in  absolute  satisfaction.  We  are  satis- 
fied that  a  transaction  of  this  nature  is  properly  described  by  the  word  "payment,"  and 
that  it  is  clearly  within  the  class  of  acknowledgments  intended  to  be  unaffected  by  the 
statute  ;  and  we  are  satisfied  that  there  is  no  reason  whatever  to  restrict  the  expression 
in  the  statute  to  that  species  of  payment  which  imports  a  final  satisfaction." 

1  Tippets  r.  Heane,  1  Cr.  ]M.  &  Eos.  252.  This  was  an  action  of  assumpsit  for  meat, 
lodging,  &c.,  furnished  by  plaintiff  for  defendant's  son.  At  the  trial,  before  Vauglium, 
B.,  the  plaintiff,  to  take  the  case  out  of  the  statute,  proved,  by  one  A  B,  that  he  had 
paid  £10  to  the  plaintiff,  by  direction  of  defendant,  in  the  year  1829,  but  could  not 
speak  to  the  account  on  which  it  was  paid,  or  give  any  evidence  beyond  the  mere  fact 
of  having  paid  the  money  by  the  defendant's  direction.  Held,  that  this  was  not  suffi- 
cient evidence  of  part-payment  to  go  to  the  jury.  And  see  Arnold  r.  Downing,  11 
Barb.  554 ;  Hodge  v.  Manley,  25  Vt.  210;  Alston  v.  State  Bank,  4  Eng.  (Ark.)  455 ; 
State  Bank  v.  Wooddy,  5  id.  638  ;  AVood  v.  Wylds,  6  id.  754 ;  Linsell  v.  Bonsor,  2 
Bing.  N.  C.  241;  Waters  v.  Tompkins,  2  Cr.  M.  &  Ros.  726;  Waugh  v.  Cope,  6  M.  & 
W.  824  ;  Wainman  r.  Kynman,  1  Exch.  118;  Davies  v.  Edwards,  7  Exch.  22. 

"  McCullough  V.  Henderson,  24  Mississippi,  92 ;  Smith  v.  Westmoreland,  12  Sm.  & 
Marsh.  663.     And  see  cases  cited  in  preceding  note. 

3  In  Ayer  r.  Hawkins,  19  Vt.  26,  it  was  held  that  a  creditor  having  several  notes 
against  his  debtor,  all  of  which  are  barred  by  the  Statute  of  Limitations,  may  appropri- 
ate a  general  payment  of  such  debtor  to  any  one  of  the  notes,  even  the  largest,  and 
revive  that  particular  note,  but  he  cannot  distribute  such  general  payment  upon  all  his 
claims,  and  thus  avoid  the  statute  as  to  all. 

*  Mills  V.  Eowkes,  5  Bing.  N.  C.  455. 

5  Bradfield  v.  Tupper,  7  Eng.  Law  and  Eq.  541;  Sanford  v.  Hayes,  19  Conn,  591 ; 
Parsonage  Fund  v.  Osgood,  21  Maine,  17C;  Bealy  v.  Greenslade,  2  Cr.  &  Jer.  61. 


240  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XIII. 

count,  are  so  many  payments,  and  may  have  the  effect  of  part- 
payments  in  taking  a  debt  towards  which  they  go,  out  of  the 
statute.!  So,  a  payment  for  a  creditor  to  a  third  party,  is  the 
same  thing  as  a  payment  to  the  creditor.^ 

The  Tenterden  Act  requires  that  the  new  promise  should  be 
in  writing ;  but  provides  also,  that  nothing  in  it  shall  alter,  or 
take  away,  or  lessen  the  effect  of  any  payment  of  any  principal 
or  interest.  This,  therefore,  remains  a  new  promise  as  before. 
But  does  the  rest  of  the  statute  apply  to  it,  and  is  it  necessary 
that  the  evidence  of  the  part-payment  should  be  in  writing? 
The  American  doctrine  is,  that  there  is  no  such  requirement,  and 
the  whole  matter  of  part-payment,  both  as  to  evidence  and  as  to 
effect,  remains  as  before.^ 


SECTION  V. 

OF  THE  PROMISE  OF  ONE  OF  SEVERAL  JOINT  DEBTORS. 

The  question  has  frequently  arisen,  whether  a  new  promise  by 
one  of  two  or  more  joint  debtors,  has  the  effect  of  reviving  the 
debt  as  to  the  others,  who  make  no  promise.  If  the  statute  be 
one  of  presumption,  such  an  admission  would  prove  the  debt  and 
remove  the   statute  as  to   all.     So  it  has  been  held.*     But  the 


1  Thus,  in  Ashby  v.  James,  11  M.  &  TV.  542,  it  was  held  that,  where  A  has  an  ac- 
count against  B,  some  of  the  items  of  which  are  more  than  six  years  old,  and  B  has  a 
cross  account  against  A,  and  they  meet  and  go  through  both  accounts,  and  a  balance 
is  struck  in  A's  favor,  this  amounts  to  an  agreement  to  set  off  B's  claim  against  the 
earlier  items  of  A's,  out  of  which  arises  a  new  consideration  for  the  payment  of  the 
balance,  and  takes  a  case  out  of  the  operation  of  the  Statute  of  Limitations,  notwith- 
standing the  provisions  of  Lord  Tenterdeiis  Act.  Alderson,  B.,  said  :  "  The  truth  is, 
that  the  going  through  an  account,  with  items  on  both  sides,  and  striking  a  balance, 
converts  the  set-off  into  payments ;  the  going  through  an  account,  where  there  are 
items  on  one  side  only,  as  was  the  case  in  Smith  v.  Forty,  4  C.  &  P.  126,  does  not  alter 
the  situation  of  the  parties  at  all,  or  constitute  any  new  consideration.  Here,  the  strik- 
ing of  a  balance  between  the  parties  is  evidence  of  an  agreement  that  the  items  of  the 
defendant's  account  shall  be  set  off,  against  the  earlier  items  of  the  plaintiff,  leaving 
the  case  unaffected,  either  by  the  Statute  of  Limitation,  or  the  set-off. 

-  Worthington  v.  Grimsditch,  7  Q.  B.  479. 

3  Thus,  in  Williams  v.  Gridley,  9  Met.  482,  where  the  payee  sued  the  maker  of  a 
promissory  note,  it  was  held  that  the  plaintiff,  in  answer  to  the  plea  of  the  Statute  of 
Limitations,  might  introduce  parol  evidence  to  show  a  part-payment  of  the  note  by  the 
defendant  within  six  years.  And  sec  Sibley  v.  Lurabert,  30  Maine,  253.  It  is  so  held 
now  in  England  also.  Cleave  v.  Jones,  6  Exch.  573,  overruling  Willis  v.  Newham,  3 
Y.  &  Jer.  518. 

*  In  Whitcomb  v.  Whiting,  2  Doug.  652,  where  the  defendant  and  three  other  per- 
sons had  executed  a  joint  and  several  promissory  note,  and  one  of  the  other  three  had 
paid  the  interest  and  part  of  the  principal  within  six  years,  it  was  held  that  this  was 


en.  XIII.]  OF   LIMITATIONS.  241 

present  weight  of  authority  and  of  reason,  limits  the  effect  qf  ♦he 
new  promise  to  him  who  makes  it.^  He  may,  however,  be 
authorized  to  promise  for  the  rest,  and  then  he  binds  them.  Thus, 
if  A,  B,  and  C  are  in  partnership,  and  a  uotc  of  theirs  is  more 
than  six  years  old,  the  new  promise  of  either  of  them,  given 
while  the  partnership  continues,  binds  all  three,  because  either 
could  give  a  new  note  binding  the  firm.  But  if  the  partnership 
has  ceased,  the  new  promise  of  A  binds  only  himself,  because  he 
has  no  longer  authority  to  bind  the  others.^  Tenter  den's  Act 
provides  that  no  joint  contractor  shall  be  chargeable  by  reason  of 
any  promise  by  a  co-contractor.  Where  this  clause  also  is 
adopted,  this  question  is  settled."^ 

sufficient  to  take  the  case  out  of  the  st.atute,  as  to  the  defendant.  Lord  Mansfield  said: 
"  Payment  by  one  is  payment  for  all,  the  one  acting  virtually  as  agent  for  the  rest ;  and, 
in  the  same  manner,  an  admission  by  one  is  an  admission  by  all ;  and  the  law  raises 
the  promise  to  pay  when  the  debt  is  admitted  to  be  due."  This  decision  is  based  partly 
on  tlie  tlien  prevalent  view,  that  any  thing  said  or  done,  which  showed  that  a  debt  had 
not  been  paid,  was  sufiScient  to  remove  the  statutory  bar,  and  partly  on  the  ground  of 
an  implied  agency. 

1  The  doctrine  tlfat  one  joint  debtor  is  virtually  the  agent  of  the  rest,  as  laid  down 
by  Lord  Mansfield^  in  the  opinion  quoted  above,  has  been,  with  a  few  exceptions,  and 
is  now  regarded  as  sound  law  in  England.  See  Perham  v.  Rayna),  2  Bing.  306 ; 
Channell  r.  I^itchburn,  5  IM.  &  "W.  494,  where  Parke,  B.,  after  giving  a  very  elaborate 
opinion,  said  :  "  The  result  is,  that  we  must  consider  the  case  of  Whitcomb  v.  Whiting 
as  good  law."  And  see  Burleigh  v.  Stott,  8  B.  &  Cr.  36;  Pease  r.  Hirst,  10  id.  122: 
Wyatt  r.  Hodson,  8  Bing.  309;  Manderston  v.  Eobertson,  4  M.  &  Kyi.  440.  The 
principle  of  "Whitcomb  v.  Whiting  is  limited,  if  not  restricted,  by  the  two  following 
cases :  Brandon  v.  Wharton,  1  B.  &  Aid.  4G3 ;  Atkins  v.  Tredgold,  2  B.  &  C.  23.  But  in 
the  Supreme  Court  of  the  United  States,  in  Bell  v.  Morrison,  1  Pet.  3.51,  tlie  autliority 
of  W^hitcomb  v.  Whiting  was  repudiated.  The  same  view  is  supported  in  Van  Keuren 
r.  Parmelee,  2  Comst.  523.  But  see  Bogert  z'.  Vermilya,  10  Barb.  32 ;  Dunham  v. 
Dodge,  id.  566;  Reid  v.  McNaughton,  15  id.  168.  In  Shoemaker  v.  Benedict,  1  Kern. 
176,  it  was  held  that  payments  made  by  one  of  the  joint  and  several  makers  of  a  prom- 
issory note,  before  an  action  upon  it  is  barred  by  tlic  Statute  of  Limitations,  and  within 
six  years  before  suit  brought,  do  not  affect  the  defence  of  tlie  statute  as  to  the  others. 
It  would  seem,  from  the  decisions  in  these  cases,  that  a  joint  debtor  is  not  an  agent,  or 
at  least  such  an  agent,  for  the  rest  of  the  debtors,  that  he  can  remove  the  bar  of  the 
statute  for  them  by  any  word  or  act  of  his  own.  The  law  is  'the  same  in  New  Hamp- 
shire. Exeter  Bank  v.  Sullivan,  6  N.  H.  124;  Kelley  v.  Sanborn,  9  id.  46  ;  Whipple 
V.  Stevens,  2  Foster,  219.  So,  in  Tennessee,  Belote  v.  Wynne,  7  Ycrg.  534;  Muse  v. 
Donelson,  2  Humph.  166.  The  following  cases  support  the  opposite  view  :  In  Ver- 
mont, Joslyn  V.  Smith,  13  Vt.  353  ;  Wheelock  v.  Doolittle,  18  id.  440.  In  Connecticut, 
Bound  V.  Lathrop,  4  Conn.  336;  Coit  i'.  Tracy,  8  id.  268:  Austin  v.  Bostwick,  9  id. 
496;  Clark  i-.  Sigourney,  17  id.  511.  In  Massachusetts,  Hunt  r.  Bridgham,  2  Pick. 
581 ;  White  v.  Hale,  3  id.  291 ;  Frye  v-.  Barker,  4  id.  382;  Sigourney  v.  Drury,  14  id. 
387.  In  INIaine,  Getchell  v.  Heald,  7  Greenl.  26;  Greenleaf  i'.  Quincy,  3  Fairf.  11; 
Pike  V.  Warren,  15  Maine,  390 ;  Dinsmore  v.  Dinsmorc.  21  id.  433 ;  Shepley  v.  Water- 
house,  22  id.  497.  See  also  the  recent  cases  of  Zent  v.  Heart,  8  Penn.  St.  337 ;  Goudy 
V.  Gilman,  6  Rich.  28;  Bowdre  v.  Hampton,  id.  208;  Tilliiighast  v.  Nourse,  14  Geo. 
641. 

'^  Bell  V.  Morrison,  1  Pet.  351 ;  Van  Keuren  v.  Parmelee,  2  Comst.  523.  See  also' 
other  cases  cited  supra. 

3  As  in  Massachusetts.  See  Mass.  Rev.  Sts.  c.  120,  §  18;  Peirce  v.  Tobey,  5  Met. 
168;  Balcom  v.  Richards,  6  Cush.  360.  And  in  Maine.  Sec  Maine  Rev.  Sts.  c.  146, 
§  24:  Quimby  v.  Putnam,  28  Maine,  419.     And,  perhaps,  in  some  other  States. 

21 


242  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIII. 


^  SECTION   VL 

TO   WnOM   THE   NEW   PROMISE   SHOULD    BE   MADE. 

Whether  the  new  promise  must  be  made  to  the  creditor  him- 
self, (or  to  his  agent,)  or  is  sufficient  if  made  to  a  third  party,  as 
by  saying,  "  I  cannot  pay  you,  because  I  owe  him  and  shall  pay 
him  first,"  is  not  settled.^  In  Pennsylvania,  it  seems  settled  that 
such  a  promise  or  acknowledgment  is  not  sufficient,  and  this  we 
think  the  better  rule.^  But  in  New  York,  the  old  rule  which 
makes  such  an  acknowledgment  sufficient,  seems  not  to  have 
passed  away.^  And  this  may  be  true  in  Massachusetts,*  and 
some  other  States. 

We  should  say  that  an  admission  by  the  maker  of  a  negotiable 
promissory  note  to  the  payee,  would  take  the  case  out  of  the 
statute  as  to  all  who  are  parties  to  the  note  after  the  payee,  from 
the  peculiar  nature  and  purpose  of  negotiable  paper.'^  But  the 
cases  are  in  some  conflict  on  this  point. 


1  Peters  V.  Brown,  4  Esp.  46 ;  Mountscphen  v.  Brooke,  3  B.  &  Aid.  141,  where  de- 
fendants, in  a  deed  to  a  third  person,  acknowledged  that  they  owed  a  certain  debt  to 
the  plaintiff,  who  was  a  stranger  to  the  deed;  held,  that  this  declaration  to  a  third  per- 
son was  sufficient  to  take  the  case  out  of  the  Statute  of  Limitations.  See,  to  the  same 
effect,  Halliday  v.  Ward,  3  Campb.  32  ;  Clark  v.  Hougham,  2  B.  &  Cr.  149 ;  Oliver 
V.  Gray,  1  H.  &  Gill,  204. 

2  In  Kyle  v.  Wells,  17  Penn.  St.  286,  it  was  held  that  a  declaration  made  by  the  de- 
fendant to  a  strancjer  to  the  suit  or  cause  of  action,  that  he  owed  to  the  plaintiff  a  debt 
"  of  about  $800,  which  he  intended  to  have  settled  within  twelve  months  from  that 
date"  is  not  sufficient  to  take  the  case  out  of  the  Statute  of  Limitations.  See,  to  the 
same  effect,  Farmers'  and  Mechanics'  Bank  v.  Wilson,  10  Watts,  261  ;  Morgan  v.  Wal- 
ton, 4  Penn.  St.  323  ;  Christy  v.  Plemington,  10  id.  129;  Gillingham  v.  Gillingham, 
17  id.  302. 

^  In  Watkins  v.  Stevens,  4  Barb.  168,  -wliere  defendant  said  to  a  third  person  that  he 
owed  the  plaintiffs  $700  for  goods  received,  it  was  held  that  such  an  acknowledgment 
was  sufficient  to  restore  the  right  of  action  which  had  been  barred  by  the  statute. 
Soulden  v.  Van  Eenssela-er,  9  Wend.  293  ;  Bloodgood  v.  Bruen,  4  Sandf.  427. 

*  Whitney  v.  Bigelow,  4  Pick.  110. 

6  Bird  V.  Adams,  7  Geo.  505  ;  Dean  v.  Hewitt,  5  Wend.  257;  Little  v.  Blunt,  9  Pick. 
488;  Howe  v.  Thompson,  2  Fairf  152;  Cripps  v.  Davis,  12  M.  &  W.  159;  Gale  v. 
Capern,  1  Ad.  &  El.  102.     But  see  p.  241,  n.  3,  svpra. 


I 


en.  XIII.]  OF   LIMITATIONS.  2-43 


SECTION   VII. 

OP   ACCOUNTS    BETWEKX    MERCHANTS. 

An  important  provision  of  the  statute  is  that  which  excepts 
from  its  operation  "  accounts  that  concern  the  trade  of  merchan- 
tUse,  between  merchant  and  merchant."  There  are  three  requi- 
sites before  a  debt  is  exempted  from  the  effect  of  the  statute,  on 
this  ground.  It  must  be  an  "  account ;  "  it  must  "  concern  mer- 
chandise ;  "  it  must- be  "between  merchants."  The  first  question 
has  been  one  of  some  difficulty  in  England,  and  has  been  there 
determined  by  a  reference  to  the  rules  of  pleading;  that  only 
being  an  account  within  the  meaning  of  the  statute,  which  would 
sustain  an  action  of  account,  or  an  action  on  the  case  for  not  ac- 
counting.' Where  these  rules  are  in  force  in  this  country,  they 
might  have  the  same  effect;  but  almost  any  transaction  which 
was  between  merchants,  and  related  to  the  buying  and  selling  of 
merchandise,  and  ended  in  a  debt,  would,  perhaps,  be  here  held 
as  an  "  account,"  within  the  meaning  of  the  statute.^ 

Formerly,  none  were  considered  as  "  merchants  "  in  England, 
who  did  not  trade  "  beyond  seas."  ^  But  the  construction  of  this 
word  is  far  more  liberal  there  at  the  present  time.*  "We  have  no 
exact  standard  or  definition  which  will  determine  who  is  a  mer- 
chant. The  word  "  trader "  is  often  used  in  this  country,  and 
sometimes  as  synonymous  with  merchant.     A  wide  significance 

1  Inglis  V.  Haigh,  8  M.  &  W.  769 ;  Cottam  v.  Tartriclge,  4  Scott,.]Sr.  E.  819.  A  col- 
lection of  tlie  earlier  cases  may  be  found  in  Webber  v.  Tivill,  2  Saund.  121. 

2  In  Spring  v.  Gray,  6  Pet.  151,  Marshall,  C.  J.,  after  quoting  the  language  of  the 
statute,  said :  "  From  the  association  of  actions  on  the  case,  a  remedy  given  by  tlie  law 
for  almost  every  claim  for  money,  and  for  the  redress  of  every  breach  of  contract  not 
under  seal,  with  actions  of  account,  which  lie  only  in  a  few  special  cases,  it  may  reason- 
ably be  conceived  that  the  legislature  had  in  contemplation  to  except  those  actions  only 
for  which  account  would  lie.  Be  this  as  it  may,  the  words  certainly  require  that  the 
action  should  be  founded  on  an  account."  Sec,  also,  Toland  v.  Sprague,  12  Pet.  300; 
Didier  v.  Davison,  2  Barb.  Ch.  477. 

^  Thus,  in  Sherman  v.  Witliers,  1  Ch.  Cas.  152,  which  was  a  bill  in  equity  for  an 
account  of  fourteen  years'  standing,  it  appeared  that  the  plaintiff  was  an  inland  mer- 
chant, and  the  defendant,  his  factor.  The  defendant  pleaded  the  Statute  of  Limitations. 
And  "  the  Lord  Keeper  conceived  the  exception  in  the  statute  as  to  merchants'  account, 
did  not  extend  to  this  case,  but  only  to  merchants  trading  beyond  the  sea." 

*  In  The  IMayor,  &c.  v.  Wilks,  2  Salk.  445,  Lord  Holt  said  :  "A  merchant  includes 
all  sorts  of  traders,  as  well  and  as  properly  as  merchant  adventurers.  A  merchant 
tailor  is  a  common  term."  See  a  review  of  English  cases  upon  this  point,  in  Thomson 
.  V.  Hopper,  1  "Watts  &  Serg.  469. 


244  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XIII. 

of  the  word,  but,  perhaps,  not  too  wide,  would  include  all  of 
those  whose  business  it  is  to  buy  goods  and  sell  them  again, 
whether  by  wholesale  or  retail.  In  Scotland,  the  phrase  "travel- 
ling merchant"  is  frequently  applied  to  a  peddler;  but  we  do  not 
know  that  it  is  so  used  here.  A  similar  difficulty  exists  as  to 
what  is  meant  by  the  word  "  merchandise."  There  is  here  also 
no  definite  standard ;  but  we  should  be  disposed  to  include  in  it 
every  thing  that  is  usually  bought  and  sold  by  merchants  in  the 
way  of  their  business,  and  nothing  more.^  Thus,  if  a  merchant 
sold  another  his  horse  or  carriage,  or  a  load  of  hay  from  his  fields, 
or  a  picture  from  his  house,  we  should  say  this  debt  would  be 
barred  by  the  statute,  even  if  the  charge  were  included  in  an  ac- 
count made  up  otherwise  of  mercantile  items. 

It  has  also  been  held  that  no  account  was  exempted  from  the 
statute,  although  between  merchants,  and  concerning  merchan- 
dise, unless  some  item  of  it  accrued  within  six  years ;  and  then 
that  item  drew  in  the  whole  account.^  This  rule  or  construction 
may  not  have  wholly  disappeared.^  But,  we  think,  the  later  as 
well  as  the  better  authority,  both  in  England  and  in  this  country, 
and  much  the  stronger  reason,  would  negative  this  requirement, 
and  exempt  the  whole  of  such  an  account,  however  old  in  all  its 
items,  from  the  operation  of  the  statute.* 

'  In  Forbes  v.  Skelton,  8  Simonds,  335,  an  account  made  up  of  money  advanced  by 
one  party,  and  goods  received  from  another,  was  not  considered  a  mercantile  account 
within  the  meaning  of  the  statute.  So,  it  was  held  in  Spring  v.  Gray,  5  Mason,  505, 
6  Pet.  151,  that  a  special  contract  between  ship-owners  and  a  shipper  of  goods,  to 
receive  half  profits,  in  lieu  of  freight,  on  the  shipment  for  a  foreign  voyage,  was  not  a 
case  of  "  merchants'  accounts,"  witliin  the  meaning  of  the  statute.  And  Marshall,  C.  J., 
said  :  "  The  case  protected  by  the  exception  is  not  every  transaction  between  merchant 
and  merchant,  not  every  account  which  might  exist  between  them  ;  but  it  must  concern 
the  trade  of  merchandise.  It  is  not  an  exemption  from  the  act,  attached  to  the  mer- 
chant merely  as  a  personal  privilege,  but  an  exemption  which  is  conferred  on  the  busi- 
ness, as  well  as  on  the  persons  between  whom  that  business  is  carried  on.  The  account 
must  concern  the  trade  of  merchandise;  and  this  trade  must  be,- not  an  ordinary  traffic 
between  a  merchant  and  any  ordinary  customers,  but  between  merchant  and  merchant." 
See  Watson  v.  Lyle,  4  Leigh,  236.  In  Farmers'  and  Mechanics'  Bank  v.  Planters' 
Bank,  10  Gill  &  Johns.  422,  it  Avas  held  that  the  exception  did  not  apply  to  transactions 
between  banking  institutions.  Sec,  also,  Dutton  t'.  Hutchinson,  1  Jur.  772  ;  Smith  v. 
Dawson,  10  B.  Monr.  112;  Lansdale  v.  I5rashear,  3  Monr.  330;  Patterson  v.  Brown, 
6  id.  10;  Coster  v.  Murray,  5  Johns.  Ch.  522,  20  Johns.  576;  Pox  v.  Fisk,  6  How. 
(Miss.)  328;  Price  v.  Upshaw,  2  Humph.  142;  Marseilles  v.  Kenton,  17  Penn.  St.  238; 
Codman  v.  Rogers,  10  Pick.  118;  Sturt  w.Mellish,  2  Atk.  612 ;  Blair  v.  Drew,  6  N.  H. 
235. 

2  Martin  v.  Heathcote,  2  Eden,  169;  Barber  v.  Barber,  18  Ves.  286;  Foster  v.  Hodg- 
son, 19  id.  179. 

3  Watson  V.  Lyle,  4  Leigh,  236  ;  Coster  v.  Murray,  5  Johns,  Ch.  522,  20  Johns.  576; 
Didier  v.  Davison,  2  Barb.  Ch.  477. 

*  This  requirement  seems  to  have  been  generally  negatived  in  England.  See  Catling 
V.  Skoulding,  6  T.  R.  189  ;    Robinson  v.  Alexander,  8  Bligh,  352  ;    Inglis  v.  Haigh,  8 


CH.  XIII.]  •        OF  LIMITATIONS.  245 

SECTION    VIII. 

OF    THE    OTHER    STATUTORY   EXCEPTIONS.  , 

The  original  English  statute  also  provides,  that,  if  a  creditor  is, 
at  the  time  when  the  cause  of  action  accrues,  a  minor,  or  a  mar- 
ried woman,  or  not  of  .sound  mind,  or  imprisoned,  or  beyond  the 
seas,  the  six  years  do  not  begin  to  run;  and  he  m^y  bring  his 
action  at  any  time  within  six  years,  after  such  disability  ceases 
to  exist.  And  by  the  4th  of  Anne,  c.  16,  s.  19,  it  was  provided, 
that,  if  any  person,  against  whom  there  shall  be  a  cause  of  action, 
shall,  when  such  cause  accrues,  be  beyond  the  seas,  the  action 
may  be  brought  at  any  time  within  six  years  after  his  return. 
These  exceptions  and  disabilities,  in  both  the  statutes,  are  usu- 
ally contained  in  our  own  statutes.  The  effect  of  these  is,  that, 
while  the  disability  continues  to  exist,  the  statute  does  not  take 
effect,  provided  the  disability  existed  at  the  time  the  debt  ac- 
crued. But  it  is  a  general  rule  that,  if  the  six  years  begin  to  run, 
they  go  on  without  any  interruption  or  suspension  from  any 
intervening  disability.^  Thus,  if  a  creditor  be  of  sound  mind,  or 
a  debtor  be  at  home,  when  the  debt  accrues,  and  one  month 
afterwards  the  creditor  becomes  insane,  or  the  debtor  leaves  the 
country,  nevertheless  the  ^ix  years  go  on,  and,  after  the  end  of 
that  time,  no  action  can  be  commenced  for  the  debt.  Or,  if  the 
disability  exists  whe^i  the  debt  accrues,  and  some  months  after- 
wards ceases,  so  that  the  six  years  begin  to  run  when  it  ceases, 
and  afterwards  the  disability  recurs,  it  docs  not  interrupt  the  six 
years.  So,  too,  if  there  be  several  disabilities  existing  at  the  time 
the  debt  accrues,  the  statute  takes  no  effect  until  all  have  ceased.^ 
But  if  there  be  one  or  more  disabilities  at  the  beginning,  so  as  to 
prevent  the  six  years  from  running,  and,  before  these  are  removed, 


M.  &  W.  769.  But  the  case  of  Tatam  v.  Williams,  3  Hare,  347,  is  an  exception.  The 
■weight  of  authority  in  America  is  the  same  as  in  England.  Mandeville  v.  Wilson,  5 
Cranch,  15  ;  Bass  v.  Bass,  6  Pick.  362  ;  Coaltcr  v.  Coalter,  1  Hob.  (Virg.)  79;  Laus- 
dale  V.  Brashear,  3  Monr.  330  ;  Patterson  v.  Brown,  6  id.  10. 

1  Coventry  v.  Atherton,  9  Ohio,  34;  Ruff  i-.  Bull,  7  H.  &  Johns.  14;  Young  v. 
Mackali;  4  Maryl.  362 ;  Smith  v.  Hill,  1  Wils.  134  ;  Gray  v.  Mendez,  Strange,  5.56  ; 
Prendergrast  r.  Foley,  8  Geo.  1. 

■■^  Jackson  v.  Johnson,  5  Cow.  74;  Dugan  r.  Gittings,  3  Gill,  138;  Scott  v.  Haddock, 
11  Geo.  258 ;  Butler  v.  Howe,  13  Maine,  397. 

21* 


246  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XIII. 

other  disabilities  occur,  as  soon  as  those  existing  at  the  beginning 
cease,  the  six  years  begin,  although  the  others  have  not  ceased.^ 

In  this  country,  a  rational  construction  has  been  given  to  the 
disability  of  being  beyond  seas,  and  its  removal;  and  it  is  not 
understdbd  to  be  terminated  merely  by  a  return  of  the  debtor  for  • 
a  few  days,  if  during  those  days  he  was  not  within  reach.^  If, 
however,  the  creditor  knew  that  he  had  returned,  or  might  have 
known  it  by  the  exercise  of  reasonable  care  and  diligence,  soon 
enough  to  have  profited  by  it,  this  removal  of  the  disability  brings 
the  statute  into  operation,  although  the  return  was  for  a  short 
time  only.^  In  some  of  our  States  it  is,  however,  expressly  pro- 
vided that,  if  a  defendant  leaves  the  State  after  the  action 
accrues,  the  time  of  his  absence  shall*not  be  taken  as  any  part  of 
the  period  within  which  the  action  must  be  brought.  Under  this 
clause  a  question  has  arisen,  whether  successive  absences  can  be 
accumulated  and  the  aggregate  deducted  ;  but  it  is  now  quite 
well  settled  that  this  may  be  done,  and  that  the  statute  is  not 
confined  to  a  single  departure  and  return.*  The  question  has 
also  arisen  whether  this  clause  contemplates  temporary  absences, 
or  only  such  as  result  from  a  permanent  change  of  residence. 
And  this  has  been  decided  differently  by  different  courts.^ 

'  Mercer  v.  Selden,  1  How.  37;  Eager  v.  The  Commonwealth,  4  Mass.  182 ;  Dease 
V.  Jones,  23  Mississippi,  133;  Demarest  v.  Wynlioop,  3  Johns.  Ch.  129  ;  Jackson  v. 
Wheat,  18  Johns.  40 ;  Doe  d.  Caldwell  v.  Thorp,  8  Ala.  253;  Bradstreet  v.  Clark,  12 
Wend.  602;  Scott  v.  Haddock,  11  Geo.  258. 

2  In  Hysingcr  v.  Baltzells,  3  Gill  &  Johns.  158,  where  defendant,  a  resident  of  another 
State,  appeared  in  Baltimore,  where  plaintiff  resided,  in  six  months  after  the  cause  of 
action  accrued,  and  "  purchased  other  goods  from  tlie  plaintiff,  and  remained  there  for 
two  days,"  it  was  held  that  the  statute  did  not  begin  to  rwn,  because  it  did  not  appear 
but  that  the  defendant  made  his  purchase  just  before  he  left:  so  that  the  plaintifi"  had 
no  opportunity  to  sue  out  a  writ  against  him  with  effect.  See  White  v.  Bailey,  3  Mass. 
271 ;  Fowler  v.  Hunt,  10  Johns.  464  ;  Eandall  v.  Wilkins,  4  Denio,  577  ;  State  Bank 
V.  Seawell,  18  Ala.  616;  Byrne  v.  Crowninshield,  1  Pick.  263  ;  Howell  v.  Burnet,  11 
Geo.  303  ;  Alexander  v.  Burnet,  5  Rich.  189  ;  Dorr  v.  Swartwout,  1  Blatch.  179. 

3  Fowler  v.  Hunt,  10  Johns.' 464 ;  State  Bank  v.  Scwell,  18  Ala.  616;  Didier  v. 
Davison,  2  Sandf.  Ch.  61.  But,  from  the  following  cases,  it  seems  that,  in  order  to  put 
the  statute  in  operation,  the  defendant  must  show  that  the  plaintiff  had  knowledge  of 
his  return,  or  constructive  notice  thereof.  Little  v.  Blunt,  16  Pick.  359 ;  Hill  v.  Bellows, 
15  Vt.  727;  Mazozon  v.  Foot,  1  Aikens,  282. 

*  It  was  so  decided  by  the  Court  of  Appeals  in  New  York,  in  the  recent  case  of  Cole 
V.  Jessup,  10  How.  Pr.  .515,  reversing  the  decision  of  the  Supreme  Court  in  the  same 
case,  in  2  Barb.  309,  and  overruling  Dorr  v.  Swartwout,  1  Blatch.  179.  And  see  Didier 
V.  Davison,  2  Barb.  Cii.  477;  Ford  v.  Babcock,  2  Sandf.  518  ;  Burroughs  v.  Bloomer, 
5  Denio,  532.  A  similar  decision  has  been  made  in  New  Hampshire.  Gilman  v. 
Cutts,  3  Fost.  376.  And  see  Smith  v.  The  Heirs  of  Bond,  8  Ala.  386 ;  Qhenot  v. 
Lefevre,  3  Gilm.  637. 

*  In  Gilman  v.  Cutts,  supra,  it  was  held  that  every  absence  from  the  State,  whetlicr 
temporary  or  otherwise,  if  it  be  such  that  tiie  creditor  cannot,  during  the  time  of  its 
continuance,  make  legal  service  upon  the  debtor,  must  be  reckoned.     And  see  Valand- 


en.  XIII.]  OF   LIMITATIONS.  247 

This  disability  applies  as  well  where  the  debtor  is  a  foreigner, 
residing  perfnanently  abroad,'  even  if  he  have  an  agent  here,^  as 
to  our  own  citizens  who  are  only  visiting  abroad. 

It  has  been  held,  that  if  there  be  joint  creditors,  all  of  whom 
are  absent  when  the  debt  accrues,  and  one  of  them  returns,  the 
six  years  begin  as  to  all  of  them.^  And  the  reason  is,  that  he 
may  bring  his  action  at  once,  and. use  the  names  of  the  other 
creditors.  But  it  has  also  been  held,  that  if  several  debtors  are 
abroad,  the  limitation  does  not  begin  to  run  until  all  return;^ 
for  othervi^ise  the  creditor  might  be  obliged  to  bring  his  action 
against  the  returning  party  alone,  and  he  might  be  insolvent ; 
and  yet  an  action  and  judgment  against  him  would  extinguish 
the  creditor's  right  of  proceeding  against  the  others. 


SECTION  IX. 

WHEN   THE   PERIOD    OF   LIMITATION   BEGINS. 

It  is  sometimes  a  question  from  what  point  of  time  the  six 
years  are  to  be  counted.  And  the  general  rule  is,  that  they 
be"in  when  the  action  mis;ht  have  been  commenced.^  If  a  credit 
is  given,  this  period  does  not  begin  until  the  credit  has  expired  ;^ 


ingham  v.  Huston,  4  Gilm.  125.  But  in  Wheeler  v.  Webster,  1  E.  D.  Smith,  1,  it  was 
held  that,  in  order  to  interrupt  the  running  of  the  statute,  it  is  not  sufficient  to  prove 
that  the  debtor,  after  the  cause  of  action  accrued,  from  time  to  time  departed,  and  was 
repeatedly  absent  from  the  State ;  he  must  be  shown  to  have  departed  from  and  resided 
out  of  the  State. 

I'Thus  in  Kuggles  v.  Keeler,  3  Johns.  261,  Kent,  C.  J.,  after  speaking  of  the  English 
construction  of  tlie  statute,  said :  "  The  word  return  has  never  been  construed  to  confine 
the  proviso  to  Englishmen,  who  went  abroad  occasionally.  The  exception  has  been 
considered  as  general,  and  extending  equally  to  foreigners  who- reside  always  abroad." 
The  same  construction  is  supported  in  Strithorst  v.  Graeme,  3  Wils.  145,  2  Wm.  Bl. 
723;  Lafonde  i'.  lluddock,  24  E.  L.  &  E.  239  ;  King  v.  Lane,  7  Missouri,  241 ;  Tagart 
V.  the  State  of  Indiana,  15  id.  209;  Estis  v.  Rawlins,  5  How.  (Miss.)  258;  Dunning 
#.  Chamberlin,  6  Verm.  127;  Graves  u.  Weeks,  19  id.  178;  Chomqua  r.  Mason,  1 
Gall.  342 ;  Alexander  v.  Burnet,  5  Rich.  189.  But  see  contra,  Snoddy  v.  Cage,  5 
Texas,  106;  Moore  v.  Hendrick,  8  id.  253. 

-  Wilsc^i  V.  Appleton,  17  Mass.  180. 

«  Ferry  v.  Jackson,  4  T.  R.  516  ;  Marsteller  v.  M'Clean,  7  Cranch,  156 ;  Henry  v. 
Means,  2  Hill,  (S.  C.)  328  ;  Riggs  v.  Dooley,  7  B.  Monr.  &  W.  236  ;  Wells  v.  Ragland, 
1  Swan,  501.     IkU  sec  contra,  Gourdine  v.  Graham,  1  Brevard,  329. 

*  Fannin  v.  Anderson,  7  Q.  B.  811. 

5  Emery  v.  Day,  1  C.  M.  &  Ros.  245 ;  Odlin  /'.  Greenlejlf,  3  N.  H.  270. 

^  Thus,  in  Witcrsbiem  v.  Lady  Carlisle,  1  H.  Bl.  631,  it  was  held  that  where  a  bill  of 
exchange  is  drawn,  payable  at  a  future  period,  for  the  amount  of  a  sum  of  money  lent 
by  the  payee  to  the  drawer,  at  the  time  of  drawing  tlie  bill,  the  payee  may  recover  the 
money  in  an  action  for  money  lent,  although  six  years  have  elapsed  since  the  time 
when  the  loan  was  advanced ;  the  Statute  of  Limitations  beginning  to  run  only  from  the 


248  ELEMENTS   OF   MERCANTILE   LAW.  [CE.  XII? 

if  a  note  on  time  be  given,  not  until  the  time  lias  expired,  includ- 
ing the  additional  three  days  of  grace  ;  ^  if  a  bill  of  exchange  be 
given,  payable  at  sight,  then  the  six  years  begin  after  present- 
ment and  demand; 2  but  if  a  note  be  payable  on  demand,^  or 
money  is  payable  on  demand,"*  then  the  limitation  begins  at  once; 
if  there  can  be  no  action  until  a  previous  demand,  the  limitation 
begins  as  soon  as  the  demand  is  made ;  ^  if  money  be  payable  on 
the  happening  of  any  event,  then  the  limitation  begins  after  that 
event  has  happened.*^  If  several  successive  credits  are  given,  as, 
if  a  note  is  given  which  is  to  be  renewed ;  or  if  a  credit  is  given, 
and  then  a  note  is  to  be  given;  or  if  the  credit  is  longer  or  shorter, 
at  the  purchaser's  option,  as,  if  it  be  agreed  that  a  note  shall  be 
given  at  two  or  four  months, — then  the  six  years  begin  when  the 
whole  credit,  and  the  longer  credit  has  expired^     But  a  credit 

time  when  tlie  money  was  to  be  repaid,  namely,  when  the  bill  became  due.  See 
Wheatlev  v.  Williams,  1  M.  &  W.  533  ;  Irving  v.  Veitch,  3  id.  90 ;  Fryer  v.  Roe,  22  E. 
L.  &  Eq".  440. 

1  Thus,  in  Pickard  v.  Valentine,  13  Maine,  412,  an  action  of  assumpsit  was  brought 
by  plaintiff  as  indorsee  against  defendant  as  drawer  of  a  bill  of  exchange,  payable  four 
months  after  date :  and  it  was  held  that  the  Statute  of  Limitations  did  not  begin  to  run 
from  the  day  it  would  have  fallen  due  by  its  terms,  but  from  the  last  day  of  grace. 

"  Holmes  v.  Kerrison-,  2  Taunt.  323 ;  Wolfe  v.  Whiteman,  4  Ilarring.  246. 

3  Little  V.  Blunt,  9  Pick.  488 ;  Newman  v.  Kettelle,  13  Pick.  418 ;  Wenman  v.  The 
Mohawk  Ins.  Co.  13  Wend.  267  ;  Hill  v.  Henry,  17  Ohio,  9  ;  Norton  v.  EUam,  2  M.  & 
W.  461. 

*  In  Coffin  V.  Coffin,  7  Qreenl.  298,  it  was  held  that  an  attorney  at  law  is  liable  to 
an  action  for  money  collected  by  him,  in  the  same  manner  as  any  other  agent,  and 
without  a  special  demand ;  and  the  Statute  of  Limitations  begins  to  run  from  the  time 
he  receives  the  money.  And  see  Lillie  v.  Hoyt,  5  "Hill,  395 ;  Stafford  v.  Richardson, 
15  Wend.  302 ;  Hickdk  v.  Hickok,  13  Barb.  632 ;  but  in  Taylor  v.  Spear,  3  Eng.  (Ark.) 
429,  and  in  Denton  v.  Embury,  5  id.  228,  it  is  held  that  in  an  action  against  an  agent 
or  attorney,  the  cause  of  action  does  not  accrue  until  demand,  and  consequently  the 
Statute  of  Limitations  does  not  begin  to  run  until  after  demand.  If  no  demand  is  made 
by  the  principal,  in  a  reasonable  time  after  notice  of  sale  by  the  agent,  the  statute  will 
begin  to  run.  Lyle  v.  Murray,  4  Sandf.  590 ;  McDonnell  v.  Branch  Bank,  20  Ala. 
313. 

5  Where  it  is  understood  that  the  principal  should  draw  upon  his  agent  after  receiv- 
ing a  notice  from  him  (and  such  is  generally  the  understanding  between  a  factor  and 
his  principal),  the  statute  does  not  begin  to  run  until  after  the  demand  is  made;  Clark 
V.  Moody,  17  Mass.  145  ;  Lyle  v.  Murray,  4  Sandf.  590  ;  Topham  v.  Braddick,  1  Taunt. 
572;  Little  v.  Blunt,  9  Pick.  488.  Wright  v.  Hamilton,  2  Bailey,  51,  shows  that  th» 
statute  will  not  begin  to  run  in  favor  of  a  sheriff  who  has  received  money  by  an  execu- 
tion, until  the  money  has  been  demanded. 

«  Waters  v.  The  Earl  of  Thanet,  2  Q.  B.  757  ;  Shutford  v.  Borough,  Godlwlt,  437  ; 
Fenton  v.  Emblers,  1  Wm.  Bl.  353.  And  in  Wilcox  r.Plummer,  4  Peters,  172,  which 
was  an  action  of  assumpsit  to  recover  the  amount  of  a  loss  occasioned  by  the 
neglect  or  unskilful  conduct  of  the  defendant,  an  attorney  at  law,  it  was  held  that  the 
Statute  of  Limitations  began  to  run  as  soon  as  the  error  was  committed,  and  not  after- 
wards, when  it  was  made  known.  So  in  the  following  cases :  Battley  v.  Faulkner,  3 
B.  &  Aid.  288;  Short  u.  M'Carthy,  id.  626;  Brown  v.  Howard,  2  Br.  &  Bing.  73 ; 
Granger  v.  George,  5  B.  &  Cr.  149;  Howell  v.  Young,  id.  259;  Argall  v.  Bryant,  1 
Sandf.  98  ;  Troup  v.  Smith,  20  Johns.  33 ;  Kerns  v.  Schoonmaker,  4  Ohio,  331  ;  The 
Governor  v.  Gordon,  15  Ala.  72. 

■7  Helps  V.  Winterbottom,  2  B.  &  Ad.  431. 


CU.  XIII.]  OF   LIiMITATIOXS.  240 

may  be  given  on  condition;  as,  that  a  bill  or  note  of  a  certain 
kind  or  amount,  shall  be  given  at  once,  or  when  the  credit  ex- 
pires. Then  if  the  bill  or  note  is  not  given  when  it  should  be, 
the  creditor  may  at  once  bring  his  action,  and  the  limitation 
begins.  But  we  should  say,  that  if  a  purchaser  agreed  that  after 
a  certain  credit  he  would  give  a  certain  bill  or  note,  the  seller 
must  demand  the  bill  or  note  at  the  proper  time,  and  if  it  be 
refused,  he  has  his  action  at  once ;  but  if  there  is  a  mere  neglect, 
and  not  a  refusal  to  give  the  bill  or  note,  the  credit  does  not  ex- 
pire until  the  period  for  which  the  bill  or  note  should  be  made 
has  expired  also. 

The  same  reason  and  the  same  rule  run  through  many  cases 
in  which  the  interests  of  third  parties  are  brought  into  question. 
Thus,  if  a  surety  pays  for  his  principal,  the  limitation  begins  as 
soon  as  he  pays,  and  begins  on  each  payment,  if  there  be  many, 
as  soon  as  each  is  made  ;  for  the  surety  may  sue  the  principal  at 
once.'  If  there  be  many  sureties,  and  one  pays  at  sundry  times 
what  is  in  the  whole  more  than  his  share,  he  has  a  claim  for  con- 
tribution against  all  his  co-sureties  ;  and  the  statute  does  not 
begin  to  run  against  him  from  his  first  payment,  but  as  soon  as 
his  payments,  whether  one  or  more,  amount  to  more  than  his 
share.2  If  one  lends  his  note,  the  limitation  against  the  borrower 
begins  when  the  lender  is  obliged  to  pay  the  note,^  and  generally, 
if  there  be  any  promise  of  indemnification,  for  the  breach  of 
which  an  action  may  be  brought,  the  limitation  against  this  ac- 
tion begins  not  until  there  is  that  actual  injury  or  loss  for  which 
the  indemnity  is  promised  ;*  and  if  the  promisor  had  a  certain 
time  in  which  to  give  the  indemnity,  not  until  that  time  has  ex- 
pired. 

So,  if  one  sells  property  which  is  partly  his  own  and  partly 
another's,  the  other  is  entitled  to  his  share  of  the  price,  but  not 
until  payment  is  made  by  the  buyer  to  the  seller ;  and  therefore 
the  limitation  does  not  begin  until  then.^    Even  if  the  seller  takes 

1  Davics  V.  Humphreys,  6  M.  &  W.  153  ;  Bullock  v.  Campbell,  9  Gill.  182  ;  Gilles- 
pie V.  Cresswell,  12  Gill  &  Johns.  36  j  Ponder  v.  Carter,  12  Iredell,  242. 

2  Davies  v.  Humphries,  supra. 

^  Reynolds  v.  Doyle,  2  Scott,  N.  R.  45. 

*  Huntley  r.  Sanderson,  1  Cr.  &  M.  4G7  ;  CoUinge  v.  Heywood,  9  Ad.  &  EI.  633  ; 
Gillespie  v.  Creswell,  12  Gill  &  Johns.  36;  Sims  v.  Gondelock,  6  Rich.  100;  Ponder 
V.  Carter,  12  Iredell,  242. 

5  As  in  Miller  r.  ^Miller,  7  Pick.  133,  where  defendant,  a  co-tenant  with  the  plaintiff, 
sold  some  trees  growing  on  the  land,  and  received  payment.     It  was  held  that  the 


250  ELEMENTS  *0F   MERCANTILE  LAW.  •       [CIL  XIII. 

a  note,  the  limitation  does  not  begin  from  the  maturity  of  the 
note,  but  from  its  payment,  because  only  then  is  he  liable  for  the 
share  of  the  other.^  But  the  seller  may  guaranty  the  note,  or 
otherwise  become  bound  to  pay  the  other  owner  his  share,  with- 
out reference  to  the  payment  to  him;  and  then  the  limitation 
begins  as  soon  as  he  should  pay. 


SECTION  X. 

THAT  THE  STATUTE  DOES  NOT  AFFECT  COLLATERAL  SECURITY. 

It  is  important  to  remember  that  the  Statute  of  Limitations  does 
not  avoid  or  cancel  the  debt,  but  only  provides  that  "  no  action 
shall  be  maintained  upon  it  "  after  a  given  time.  But  it  does  not 
follow  that  no  right  can  be  sustained  by  the  debt,  although  the 
debt  cannot  be  sued.^  Thus,  if  one  who  holds  a  common  note 
of  hand,  on  which  there  is  a  mortgage  or  pledge  of  real  or  of 
personal  property,  without  valid  excuse  neglects  to  sue  the  note 
for  more  than  six  years,  he  can  never  bring  an  action  upon  it; 
but  his  pledge  or  mortgage  is  as  valid  and  effectual  as  it  was 
before  ;  and  as  far  as  it  goes,  his  debt  is  secure  ;  and  for  the 
purpose  of  realizing  this  security,  by  foreclosing  a  mortgage,  for 
example,  he  may  have  whatever  process  is  necessary  on  the 
note  itself. 


Statute  of  Limitations  began  to  run  from  the  time  the  ■defendant  received  the  payment, 
and  not  from  tlie  time  of  the  sale. 

1  See  Miller  v.  Miller,  supra. 

-  In  Higgins  u.  Scott,  2  B.  &  Ad.  413,  an  attorney  for  a  plaintiff  had  obtained  a 
judgment,  and  the  defendant  was  afterwards  discharged  under  the  Lords'  Act,  but  at  a 
subsequent  period  a,  Ji.fa.  issued  against  his  goods,  upon  whicli  the  sheriff  levied  the 
damages  and  costs,  it  was  held,  that  the  attorney  (though  he  had  taken  no  step  in  the 
cause,  or  to  recover  his  bill  of  costs,  within  six  years)  liad  still  a  lien  on  the  judgment 
for  his  bill  of  costs,  and  the  Court  directed  the  sheriff  to  pay  him  .the  amount  out  of  the 
proceeds  of  the  goods.  And  see  Spears  v.  Hartley,  3  Esp.  81  ;  Mavor  v.  Pyne,  2  C.  & 
r.  91 ;  Williams  v.  Jones,  13  East,  450;  Quantock  v.  England,  .5  Burr.  2628. 


en.  XIV.]  OF    INTEREST   AND    USURY.  251 


CHAPTER   XIV.      . 
OF  INTEREST  AND  USURY. 

SECTION  I.. 

WHAT   INTEREST   IS,   AND   WHEN   IT   IS    DUE. 

Interest  means  a  payment  of  money  f(fr  the  use  of  money. 
In  most  civilized  countries  the  la\f  regulates  this ;  that  is,  it  de- 
clares how  much  money  may  be  paid  or  received  for  the  use  of 
money;  and  this  is  called  legal  interest;  and  if  more  is  paid  or 
agreed  to  be  paid  than  is  thus  allowed,  it  is  called  usurious  inter- 
est. By  interest,  is  commonly  meant  legal  interest ;  and  by 
usury,  usurious  interest.  • 

Interest  may  be  due,  and  may  be  demanded  by  a  creditor,  on 
either  of  two  grounds.  One,  a  bargain  to  that  effect;  the  other, 
by  way  of  .damages  for  withholding  money  that  is  due.  Indeed, 
it  may  be  considered  as  now  the  settled  rule,  that  wherever 
money  is  withheld  which  is  certainly  due,  the  debtor  is  to  be  re- 
garded as  having  promised  legal  interest  for  the  delay.'  And 
upon  this  implication,  as  on  most  others,  the  usage  of  trade^ 
and  the  customary  course  of  dealings  between  the  parties,^ 
would  have  great  influence. 

In  general,  we  may  say  that  interest  is  allowed  by  law  as  fol- 


I  1  Dodge  V.  Perkins,  9  Pick.  368  ;  Scllcck  v.  French,  1  Conn.  32  ;  Ecid  v.  Rensselaer 
Glass  Factory,  3  Cowen,  393 ;  and  see  1  American  Leading  Cases,  341,  wliere,  in  a  note 
to  Selleck  v.  French,  the  whole  subject  is  ably  considered. 

^  See  Meech  v.  Smith,  7  Wend.  315.  In  this  case  A.  sued  B.  upon  an  account  for 
the  transportation  of  a  quantity  of  flour  from  Rochester  to  New  York,  and  claimed 
interest  upon  the  same.  He  offered  to  prove  that  it  was  the  uniform  custom  of  all 
those  engaged  in  the  same  business  to  charge  interest  upon  tlieir  accounts  ;  and  that 
the  defendant  knew  this.  This  evidence  having  been  rejected  in  tlip  court  below,  it 
was  held,  that  such  usage  being  proved,  the  plaintiff  was  entitled  to  interest,  and  that 
the  evidence  should  have  been  received  ;  see  also  Koons  i-.  Miller,  3  W.  &  S.  271. 

^  Esterly  v.  Cole,  1  Barbour,  23.),  3  Conist.  .502.  And  where  it  is  known  to  one 
party  that  it  is  the  uniform  custom  of  tlie  other  to  charge  interest  upon  articles  sold  or 
manufactured  by  him  after  a  certain  time,  the  latter  will  be  allowed  to  charge  interest 
accordingly.    McAllister  v.  Reab,  4  Wend.  483. 


252  ELEMENTS   OP    MERCANTILE   LAW.  [CH.   XIV. 

lows  :  on  a  debt  due  by  judgment  of  court,  from  the  rendition  of 
judgment  ;^  and  on  an  account  that  has  been  liquidated,  from  the 
day  of  the  liquidation;^  for  goods 'sold,  from  the  time  of  the 
sale,  if  there  be  no  credit,  and  if  there  be,  then  fi*om  the  day 
when  the  credit  expires ;  ^  for  rent,  from  the  time  that  it  is  due,^ 
and  this  even  if  the  rent  is  payable  otherwise  than  in  money,  but 
is  not  so  paid;^  for  money  paid  for  another*^  or  lent  to  another,'^ 
from  the  payment  or  loan.^ 

It  sometimes  happens  that  money  is  due,  but  not  now  paya- 
ble ;  and  then  the  interest  does  not  begin  until  the  money  is 


1  Gwiiin  ?'.  Whitaker,  1  H.  &  J.  754;  Prescott  v.  Parker,  4  Mass.  170.  And  the 
rule  applies  where  the.  original  cause  of  action  did  not  carry  interest.  Klock  v.  Rob- 
inson, 22  Wend.  157;  Maghall  v.  Dudley,  4  J.  J.  Marsh.  244.  And  where  partial 
payments  have  been  mad*ipon  the  juc%ment,  interest  is  to  be  cast  in  the  same  man- 
ner as  upon  a  note  of  hand,  upon  which  partial  payments  have  been  made.  Hodgdon 
V.  Hodgdon,  2  N.  H.  1C9. 

'■^  Elliott  V.  Minott,  2  McCord,  125  ;  Liotard  v.  Graves,  3  Gaines,  226;  Walden  v. 
Sherburne,  15  Johnson,  409  ;  Blaney  v.  Hendrick,  3  Wils.  205.  But  upon  an  unsettled 
claim  intei'cst  will  only  be  allowed  from  the  time  of  demand;  and  if  no  demand  be 
proved,  then  from  the  commencement  of  the  suit.  Barnard  v.  Bartholomew,  22  Pick. 
291  ;  Gammell  v.  Skinner,  2  Gall.  45  ;  Mcllvaine  v.  Wilkins,  12  N.  11.  474;  Goff  v. 
Rehoboth,  2  Gush.  475. 

3  Porter  v.  Munger,  22  Vt.  191;  Esterly  v.  Cole,  3  Comst.  502;  Bate  v.  Burr,  4 
Harrington,  130. 

1  Dennison  v.  Lee ,  6  G.  &  J.  383 ;  Clark  v.  Barlow,  4  Johns.  183  ;  Elkin  v.  Moore, 
6  B.  Monroe,  462  ;  Buck  v.  Eishcr,  4  Wharton,  51G. 

5  Van  Rensselaer  r.  Jewett,  5  Denio,  135,  2  Comst.  135;  Lush  v.  Druse,  4  Wend. 
313;  Van  Rensselaer  v.  Jones,  2  Barb.  643;  Livingston  v.  Miller,  1  Ivern.  SO.  But 
see  Philips  v.  Williams,  5  Gratt.  259.  In  the  recent  case  of  t)ana  v.  Fiedler,  1  E.  D. 
Smith,  463,  2  Kern.  40,  it  was  held  that  in  an  action  on  a  contract  to  recover  damages 
for  the  non-delivery  of  merchandise,  the  plaintiff  is  entitled  to  recover  the  difference 
between  the  contract  price  and  the  market  value  of  the  article  at  the  time  and  place 
specified  for  its  delivery,  with  interest  thereon  ;  and  it;  is  not  within  the  disci'etion  of  the 
jury  to  allow  interest  or  not ;  the  plaintiff  is  legally  entitled  to  interest. 

«  Sims  V.  Willing.  8  S.  &  R.  103;  Gibbs  v.  Bryant,  1  Pick.  118;  Goodloe  v.  Clay, 
6  B.  Mon.  236  ;  Reid  v.  Rensselaer  Glass  Factory,  3  Cowen,  393,  5  id.  589. 

'  Liotard  v.  Graves,  3  Caines,  226  ;  Dilworth  v.  Sinderling,  1  Binney,  488.  And 
where  one  has  wrongfully  received  or  retained  the  money  of  another,  interest  is  charge- 
able from  the  time  of  such  unlawful  receipt,  or  detention.  Wood  v.  Robbing,  11  Mass. 
504  ;  Bedell  v.  Janney,  4  Gilman,  193 ;  Duly  v.  Perkins,  9  Pick.  368;  Hudson  v.  Ten- 
ny,  6  N.  H.  456  ;  People  v.  Gasherie,  9  Johns.  71  ;  Crane  v.  Dygert,  4  Wend.  675.  But 
where  an  account  at  a  bank  was  oveixlrawn  by  accident,  and  there  was  no  fraud  in 
obtaining  the  money  and  no  fault  in  retaining  it,  it  was  held  that  interest  was  not  recov- 
erable, until  after  .a  demand  made,  or  some  default  in  payment.  Hubbard  v.  The 
Charlestown  Branch  R.  R.  Co.  11  Met.  124.  So  where  money  had  been  paid  by  mis- 
take, it  was  held  that  interest  could  only  be  allowed  from  a  demand  and  refusal.  Si- 
mons V.  Walter,  1  McCord,  97.     See  also  King  v.  Diehl,  9  S.  &  R.  409. 

^  Interest  is  not  generally  recoverable  upon  claims  for  unliquidated  damages,  nor  in 
actions  founded  on  tort.  Holmes  v.  Misroon,  3  Brev.  209  ;  Hull  v.  Caldwell,  6  J.  J. 
Marsh.  208.  Bilt  although  interest,  eo  nomine,  is  not  allowed  in  actions  of  this  sort, 
juries  are  sometimes  at  liberty  to  consider  it  in  estimating  the  damages.  See  Suy- 
dam  V.  Jenkins,  3  Sandf.  614  ;  Hyde  v.  Stone,  7  Wend.  354  ;  Beals  v.  Guernsey,  8 
Johns.  446 ;  Kennedy  v.  Whitwell,  4  Pick.  466 ;  Rowley  v.  Gibbs,  14  Johns.  385  ; 
Ancrum  v.  Slone,  2  Specrs,  594  ;  Dox  v  .  Dey,  3  Wend.  356  ;  Arnott  v.  Redfern,  3 
Bing.  353. 


CII.  XIV.]  OP   INTEREST   AND   USURY.  253 

payable.^  As  if  a  note  be  on  demand,  the  money  is  always 
duo,  but  is  not  payable  until  demand ;  and  therefore  is  not  on 
interest  until  demand.^  But  a  note  payable  at  a  certain  time,  or 
after  a  certain  period,  carries  interest  whether  it  be  demanded  or 
not.3 


SECTION  11. 

OF   MONEY. 

The  laws  which  regulate  interest  and  prohibit  usury  are  very 
various,  and  are  not  perhaps  precisely  the  same  in  any  two  of 
our  States.  Formerly,  usury  was  looked  upon  as  so  gi-eat  an 
offence,  that  the  whole  debt  was  forfeited  thereby.  The  law  now, 
however,  is, — generally,  at  least, — much  more  lenient.  The  the- 
ory that  money  is  like  any  merchandise,  worth  what  it  will  bring 
and  no  more,  and  that  its  value  should  be  left  to  fix  itself  in  a 
free  market,  is  certainly  gaining  ground.  Already  there  are  con- 
tinual efforts  to  change  the  statutes  of  usury,  so  that  parties  may 
make  any  bargain  for  the  use  of  money  which  suits  them;  but 
when  they  make  no  bargain,  the  law^  shall  say  what  is  legal  inter- 
est. And  generally,  the  forfeiture  is  now  much  less  than  the 
whole  debt.  In  our  notes  we  state  the  various  rules  in  our  States, 
as  nearly  as  we  can  ascertain  them.*^ 

'  As  in  Henderson  v.  Blanchard,  4  Louisania  An.  Hep.  23,  whore  A  purchased 
land  of  C,who  acted  as  the  agent  of  C,  and  paid  a  part  of  the  pnrchase-money  down, 
and  was  to  pay  the  halance  as  soon  as  the  sale  should  be  approved  by  C  ;  it  was  held 
that  inasmuch  as  this  balance  was  not  payable  until  notice  was  given  to  A  of  C's  ap- 
proval of  tiie  sale,  interest  could  only  be  recovered  from  the  date  of  such  notice. 

*  Nelson  v.  Cartmel,  6  Dana,  7  ;  Jacobs  v.  Adams,  1  Dallas,  52 ;  Hunt  r.  Nevers, 
15  Pick.  500;  Brcyfogle  r.  Bccklcy,  16  S.  &  R.  264. 

^  See  Jacoljs  i\  Adams,  supra  ;  Byles  on  Bills,  242,  and  cases  there  cited. 

*  In  Maine,  the  excess  above  the  "legal  rate  of  interest,  six  per  cent.,  is  not  recovera- 
ble, and  if  paid,  may  be  recovered  back  at  any  time  within  a  year.  Eev.  Stat,  of 
Maine,  c.  69,  ^  2,  5,'8.  In  New  Hampshire,  the  legal  rate  of  interest  being  six  per 
cent.,  the  party,  taking  the  usury,  is  subjected  to  a  penalty  of  three  times  the  amount 
of  the  usury  taken,  tobe  deducted  from  the  debt.  Rev.  Stat,  of  N.  H.  c.  190,  §  3. 
In  Vermont,  lawful  interest  only  (six  per  cent.)  is  recoverable,  and  a  party  paying 
more  than  legal  interest  may  recover  it  back.  Comp.  Stat.  ofVt.  c.  76,  §  4.  Seven 
per  cent.,  however,  may  be  charged  upon  railway  bonds.  In  Massachusetts,  a  party 
receiving  more  than  legal  interest^  six  per  cent.,  forfeits  three  times  the  amount  of  the 
unlawful  interest  taken.  And  where  a  party  has  paid  more  than  legal  interest,  he  may 
recover  of  the  person  receiving  it  three  times  the  amount  of  the  unlawful  interest  paid. 
Supplement  to  Rev.  Sts.  of  Mass.  (1853)  c.  199.  In  Rhode  Island,  upon  an  usurious 
contract,  legal  interest  only  is  recoverable ;  and  where  more  than  legal  interest,  six  per 
cent.,  has  been  paid,  it  may  be  recovered  back.  Public  Laws  of  R.  I.  p.  286.  In 
Connecticut,  upon  usurious  contracts,  the  legal  rate  of  interest  being  six  per  cent.,  the 
whole  interest  is  forfeited.    Pub.  Acts  of   Conn.  (1849)  c.  46.     In  New  York,  all 

22 


254  ELEMENTS    OF    MERCANTILE    LAW.  [CH.  XIV. 

There  is  no  especial  form  or  expression  necessary  to  constitute 
a  usurious  bargain.     It  is  enough  for  this  purpose^  if  there  be  a 

usurious  contracts  arc  A'oid,  ami  where  more  than  tlic  legal  rate  of  interest,  seven  per 
cent.,  has  been  paid,  it  may  be  recovered  liack.  Rev.  Stat,  of  N.  Y.,rt.  2,  c.  4,  tit.  3. 
In  New  Jersey,  tlic  legal  rate  of  interest  being  six  per  cent.,  usury  avoids  the  whole 
contract.  Statntes  of  N.  J.  Title  28,  c.  1.  However,  in  the  township  of  Hoboken 
and  in  Jersey  City,  seven  per  cent,  may  be  charged.  In  Pennsylvania,  the  party  taking 
the  usury,  forfeits  the  amount  of  the  money  or  other  tiling  lent,  one  half  to  the  State, 
the  otiier  to  the  party  suing  for  the  same.  The  legal  rate  of  interest  is  six  per  cent. 
Laws  of  Tenn.  c.  34,  ^2.  It  has  been  decided  under  this  act  that  the  contract  itself 
is  not  void  ;  and  a  party  is  entitled  to  recover  the  sum  actually  lent,  together  with 
lawful  interest ;  otherwise  tlie  State  might  be  deprived  of  its  share  of  the  penalty  by 
the  borrowers  refusing  to  enforce  the  statute.  WycoiT  v.  Longhead,  2  Dall.  92 ; 
Turner  ?».  Calvert,  12  S.  &  K.  46.  In  Delaware,  the  party  taking  the  usury,  forfeits 
the  amount  of  the  whole  debt,  one  Iialf  to  the  State,  the  other  to  the  informer.  The 
legal  rate  is  six  per  cent.  Laws  of  Delaware,  j).  314.  In  Maryland,  the  excess  paid 
above  the  legal  rate  of  interest,  six  per  cent.,  is  recoverable  back.  Statutes  of  Mary- 
land, c.  69.  In  Virginia,  the  party  taking  more  than  the  legal  rate  of  interest,  six  per 
cent.,  forfeits  the  whole  debt.  Laws  of  Va.  374.  In  North  Carolina,  the  taking  of 
unlawful  interest  renders  the  whole  contract  void.  The  legal  rate  is  six  per  cent.  Rev. 
Statutes  of  N.  C.  c.  117.  In  South  Carolina,  the  party  taking  the  usury  forfeits  the 
whole  interest.  The  legal  rate  is  six  per  cent.  Stats,  of  S.  C.  p.  409.  In  Georgia, 
wliere  the  legal  rate  of  interest  is  seven  per  cent.,  by  the  taking  of  usury  tlie  party 
forfeits  the  wiiole  interest.  Prince's  Laws  of  Ga.  p.  295.  In  Alabama,  the  interest  only 
is  ferfeited  where  usury  is  taken.  Tlie  legal  rate  is  eight  per  cent.  In  Arkansas,  the 
legal  rate  is  six  per  cent.,  and  the  taking  of  usury  avoids  the  contract;  but  parties 
may  agree  in  writing  for  ten  per.  cent,  interest.  Stats,  of  Ark.  c.  90,  §  2.  In  Florida, 
usury  avoids  the  contract.  Tiie  legal  rate  is  six  per  cent.  Statutes  of  Florida,  c.  661. 
In  Illinois,  in  all  actions  brought  upon  usurious  contracts,  the  defendant  shall  recover 
his  costs,  and  the  plaintiff  shall  forfeit  three  times  the  amount  of  the  whole  interest. 
And  a  party  paying  more  than  the  legal  rate  of  interest,  six  per  cent.,  may  recover  of 
the  party  receiving  the  same,  thi'ce  times  the  amount  so  paid.  But  banks  may  charge 
seven  per  cent.,  and  individuals  may  make  special  contracts  for  ten  per  cent.  Rev. 
Stats,  of  111.  c.  .54.  In  Indiana,  the  taking  of  usury  causes  a  forfeiture  of  five  times 
the  amount  of  the  whole  interest.  Six  per  cent,  is  the  legal  rate.  Rev.  Stats,  of  Ind. 
Art.  3,  §§  29,  30.  In  Iowa,  where  the  legal  rate  of  interest  is  six  per  cent.,  the  taking 
of  usury  forfeits  the  whole  interest,  but  ten  per  cent,  is  allowed  on  special  con- 
tracts. Code  of  Iowa.  In  Kentucky,  usury  subjects  the  party  to  a  forfeiture  of  the 
whole  interest.  The  legal  rate  is  six  per  cent.  Stats,  of  Ky.  vol.  2,  p.  857.  Ixx 
Louisiana,  the  legal  rate  being  five  per  cent.,  usury  causes  a  forfeiture  of  the  whole  in- 
terest ;  but  eight  per  cent,  may  be  agreed  upon  by  the  parties.  See  Civil  Code  of 
La.  In  Michigan,  seven  per  cent,  is  the  legal  rate  of  interest.  Ten  per  cent,  may  be 
charged  upon  special  contracts.  There  is  no  penalty  for  taking  usury.  In  Mississippi, 
the  legal  rate  is  six  per  cent.,  and  the  receipt  of  usury  forfeits  the  whole  interest.  Rev. 
Stats,  of  Miss.  c.  74.  Eight  per  cent.,  however,  may  be  charged  on  special  contracts. 
In  Missouri,  the  legal  rate  is  six  per  cent.,  and  the  receipt  of  usury  forfeits  the  whole 
interest.  Rev.  Stats,  of  Missouri,  c.  88.  In  Ohio,  where  the  legal  rate  is  six  per 
cent.,  tlie  receipt  of  usury  causes  a  forfeiture  of  the  whole  interest ;  but  eight  per  cent. 
is  chargeable  upon  special  contracts.  Rev.  Stats,  of  Ohio,  c.  60.  In  Tennessee,  six  per 
cent,  is  the  legal  rate,  and  an  excess  avoids  the  whole  interest.  Statutes  of  Tenn.  c.  50. 
In  Texas,  the  taking  of  usury  avoids  the  whole  interest.  The  legal  rate  is  eight  per 
cent.,  but  on  special  contracts  twelve  per  cent,  is  chargeable.  In  Wisconsin,  the  legal 
rate  is  seven  per  cent.,  but  special  contracts  may  lie  made  for  twelve  per  cent.  Rev. 
Stats,  of  Wis.  c.  45.  In  California,  the  legal  rate  is  ten  per  cent.,  and  there  is  no 
penalty  for  taking  usury. 

1  Burton's   case,  5  Rep.  69;  Symonds  v.  Cockerill,  Nov,  151  ;  Marsh  v.  Martindalc, 
_3  B.  &  P.  160.     In  Richards  v.  Brown,  Cowpcr,  776,  Lord  Munsjidd  said :  "  The  ques- 
'tion  is,  what  was  the  substance  of  the  transaction,  and  the  true  intent  and  meaning  of 
the  parties  ?  For  they  alone  are  to  govern,  and  not  the  words  used."  See  also  tlie  opin- 
ion of  Marshall,  C.  J.,  in  Scott  v.  Lloyd,  9  Peters,  446  ;  Tate  v.  Wellings,  3  T.  R.  531 ; 
Chesterfield  v.  Janssen,  1  Atk.  340;  Lawley  v.  Hooper,  3  Atk.  278;  Hammett  v.  Yea,  1 


CII.  XIV.]  OF   INTEREST   AND    USURY.  255 

substantial  payment  or  promise  of  payment,  of  more  than  the 
law  allows,  either  for  the  use  of  money  lent,i  or  for  the  forbear- 
ance of  money  due  and  payable.^  One  thing,  however,  is  certain  : 
there  must  be  an  usurious  intention,  or  there  is  no  usury.^  That 
is,  if  one  miscalculates,  and  so  receives  a  promise  for  more  than 
legal  interest,  the  error  may  be  corrected,  the  excess  waived,  and 
the  whole  legal  interest  claimed.'*  But  if  one  makes  a  bargain 
for  more  than  legal  interest,  believing  that  he  has  a  right  to  make 
such  a  bargain,  or  that  the  law  gives  him  all  that  he  claims,  this 
is  a  mistake  of  law,  and  does  not  save  the  party  from  the  effect 
of  usury.^ 

B.  &  P.  151 ;  Douglass  v.  McChcsney,  2  Rand.  109 ;  Andrews  v.  Pond,  13  Peters,  65  ; 
Tyson  v.  Kickaid,  3  H.  &  J.  109;  Bank  of  U.  S.  v.  Owens,  2  Peters,  536;  Seymour 
V. 'Strong,  4  Hill,  255  ;  Shober  v.  Hiiuser,  4  Dcv.  &  Bat.  91 ;  Clarkson  v.  Garland,  1 
Leigh,  147  ;  Stcptoe  r.  Harvey,  7  Leigh,  501 ;  Drew  y. Power,  1  Sch.  &  Lef.  182  ;  Dow- 
dall  V.  Lenox,  2  Edws.  Ch.  2G7 ;  Brown  v.  Waters,  2  Md.  Ch.  Dec. 201 ;  Wright  v.  McAlex- 
ander,  1 1  Ahib.  236  ;  Williams  v.  Williams.  3  Green,  255 ;  Pratt  v.  Adams,  7  Paige,  616. 

iThus,  where  a  purchaser,  at  the  time  of  the  sale,  reserved  to  himself  the  right  of 
returning  the  thing  purchased,  and  then  compelling  tlie  vendor  to  repay  the  considera- 
tion with  more  than  lawful  interest,  it  was  held,  that  the  whole  contract  was  usurious. 
Delano  v.  Kood,  1  Gilman,  690.     And  see  cases  cited  in  preceding  note. 

-  The  following  cases  hold  that  a  contract  for  the  payment  of  illegal  interest  for  the 
forbearance  of  an  existing  debt,  or  the  actual  payment  of  money  for  such  forbearance, 
constitutes  usury.  Craig?;.  Hewitt,  7  B.  Mon.  475  ;  Young  v.  Miller,  1  id.  540  ;  Parker 
V.  Ramsbottom,"5  D.  &  Ry.  138  ;  Evans  v.  Negley,  13  S.  &  R.  218 ;  Hancock  v.  Hodg- 
son, 3  Scam.  333;  Carlis  v.  M'Laughlin,  1  Chip.  112  ;  Seneca  County  Bank  v.  Scherm- 
erhorn,  1  Denio,  135  ;  Gray  v.  Belden,  3  Flor.  110. 

2 In  1  Freeman,  253,  North,  C.  J.,  said  :  "If  a  scrivener  in  making  a  mortgage,  &c., 
do  through  mistake  make  the  money  payable  sooner  than  it  ought  to  be,  or  reserve 
more  interest  than  ought  to  be,  this  will  not  make  it  void  within  the  statute,  because 
there  was  no  corrupt  agreement."  *And  see,  also,  Marvine  v.  Hymers,  2  Kern.  223  ; 
Gibson  v.  Stearns,  3  N.  H.  185;  Livingston  v.  Bird,  1  Root,  303;  Lloyd  v.  Scott,  4 
Pet.  224  ;  Nevison  v.  Whitley,  Cro.  Car.  501  ;  Buckley  v.  Guildbank,  Cro.  Jac.  678  ; 
Doe  (/.  Metcalf  v.  Brown,  Holt.  N.  P.  295. 

*  Marvine  r.  Hymers,  2  Kern.  223;  Glassfurd  y.  Laing,  1  Campb.  149;  Childers  v. 
Deane,  4  Rand.  406. 

^Thus,  in  Maine  Bank  v.  Butts,  9  Mass.  49,  where  the  defendant  agreed  to  pay  the 
plaintiffs  more  than  the  legal  rate  of  interest,  but  the  excess  was  owing  to  the  mode  of 
computation  adopted  by  the  plaintiffs,  and  which  was  usual  among  banks,  Sewall,  J., 
said :  "  It  is  probable  that  in  this  case  there  was  no  intentional  deviation  on  the  pai't 
of  the  bank;  but  a  mistake  of  their  right.  This,  however,  is  a  consideration,  which 
must  not  influence  our  decision.  The  mistake  was  not  involuntary,  as  a  miscalculation 
might  be  considered,  where  an  intention  of  conforming  to  the  legal  rule  of  interest  was 
proved,  but  a  voluntary  departure  from  the  rate.  An  excess  of  interest  was  Intention- 
ally taken,  upon  a  mistaken  supposition  that  banks  were  privileged  in  this  respect  to  a 
certain  extent.  This  was,  therefore,  in  the  sense  of  th6  law,  a  corrupt  agreement ;  for 
ignorance  of  the  law  will  not  excuse." 

The  question  has  been  much  discussed  whether  the  use  of  tables  calculated  on  the 
supposition  that  a  year  consists  of  360  days,  is  usurious.  In  New  York,  it  is  held  that  it 
is.  See  New  York  Firemen  Ins.  Co.  v.  Ely,  2  Cow.  678 ;  Utica  Ins.  Co.  v.  Tillman, 
1  Wend.  555;  Bank  of  Utica  v.  Wagar,  8  Cow.  398.  But  in  Massachusetts  and  some 
other  States,  it  is  held  that  the  use  of  such  tables  does  not  render  the  transaction  usu- 
rious. See  Agricultural  Bank  w.  Bissell,  12  Pick.  586;  Bank  of  St.  Albans  v.  Scott, 
1  Vt.  426;  Duncan  v.  Maryland  Savings  Institution,  10  G.  &  J.  229;  Duvall  v.  Far- 
mers Bank,  7  G.  &  J.  44 ;  Planters  Bank  v.  Snodgrass,  4  How.  (Miss.)  573;  Lyon  v. 
State  Bank,  1  Stewart,  442 ;  State  Bank  v.  Cowan,  8  Leigh,  253.  We  think  this 
latter  the  better  opinion. 


256  ELEMENTS    OF    MERCANTILE    LAW.  [CII.  XIV. 

It  is  also  settled,  that  only  the  contract  which  is  itself  usurious 
can  be  affected  by  the  usury.^  If  by  one  contract,  or  by  one 
completed  transaction,  as  the  payment  of  a  debt  for  another,  a 
party  acquires  a  valid  claim  for  a  certain  amount,  and  lawful 
interest,  and  then  by  a  new  contract,  as  a  new  note  for^  instance, 
the  debtor  agrees  to  pay  him  usurious  interest,  this  new  note,  it 
has  been  held,  will  be  affected  by  the  usury,  but  the  original  claim 
will  not  be.2  So,  if  a  borrower  promises  to  pay  a  certain  sum, 
and  then  more  than  interest,  as  a  penalty  if  he  does  not  pay  the 
first  sum,  this  is  not  usurious ;  first,  because  by  paying  the  first 
sum  he  can  escape  the  penalty ;  and  secondly,  because  all  penal- 
ties are  reducible  by  the  court  to  the  sum  originally  due,  and 
interest.-^     So,  if  a  debtor  requests  time,  and  promise  to  pay  for 

1  Anon.  1  Bulstrocle,  17.  In  this  case  the  defendant  borrowed  £60  of  the  plaintiff, 
for  one  year,  at  the  legal  rate  of  interest.  Several  days  before  the  end  of  the  year,  he 
paid  the  plaintiff  the  interest  for  the  whole  year,  but  failed  to  pay  the  prinqipal  when 
it  became  due ;  to  recover  which  the  present  action  was  brought.  The  defendant  set 
up  the  defence  of  usury,  contending  that  the  plaintiff"  had  taken  above  ten  pounds  in 
the  hundred,  because  he  received  his  interest  within  the  year.  But  it  was  resolved 
that  this  was  no  usury.  And  Williams,  J.,  said  :  "  Where  the  first  contract  is  not  usuri- 
ous, this  shall  never  be  made  usury  within  the  statute  by  matter  fx  post  facto ;  as  if  one 
contract  with  anothei;  to  borrow  .£100  for  a  year,  and  to  give  him  XI 0  for  interest  at 
the  end  of  the  year ;  if  he  pays  the  interest  within  the  year,  this  is  not  usury  within 
the  statute  to  avoid  the  obligation,  or  to  give  a  forfeiture  of  the  money  within  the 
statute,  because  this  contract  was  not  usurious  at  the  beginning."  And  in  Fcrrall  v. 
Shaen,  1  Saund.  294,  which  was  debt  upon  a  bond,  to  which  the  defendant  pleaded  that 
after  the  making  of  the  bond,  the  plaintiff  had  received  more  than  the  legal  rate  of 
interest,  and  the  plaintiff  demurred,  the  court  adjudged  for  the  plaintiff.  See  also 
Nichols  V.  Lee,  3  Anst.  940,  where  to  debt  upon  a  [iond  the  defendant  pleaded  the  sub- 
sequent receipt  of  usury.  And  per  MacDonald,  C.  B.:  "  There  is  nothing  more  settled 
than  this  point.  To  avoid  a  security  as  usurious,  you  must  show  that  the  agreement 
was  illegal  from  its  origin."  And  the  following  cases  will  be  found  to  estaljlish  the 
same  doctrine:  Radley  v.  Manning,  .3  Keble,  142;  Parr  v.  Eliason,  1  East,  92  ;  Ballard 
V.  Oddey,  supra  ;  Ilex  v.  Allen,  T.  Raym.  196  ;  Parker  v.  Ilamsbottoni,  3  B.  &  Cr.  257  ; 
Gray  v.  Fowler,  1  H.  Black.  462;  Phillips  v.  Cockayne,  3  Camp.  119;  Daniel  v. 
Cartony,  1  Esp.  274 ;  Bush  v.  Livingston,  2  Gaines's  Cases  in  Error,  66 ;  Nichols  v. 
Pearson,  7  Pet.  103  ;  Pollard  v.  Baylors,  6  INIunf.  433  ;  Merrils  v.  Law,  9  Cow.  65  ; 
Rice  V.  Welling,  5  Wend.  597  ;  Crane  v.  Hubbel,  7  Paige,  417  ;  Brown  v.  Dewey,  1. 
Sandf.  Ch.  56 ;  Gaither  v.  F.  &  M.  Bank,  1  Pet.  43  ;  Gardner  v.  Flagg,  8  Mass.  101  ; 
Edgell  V.  Stanford,  6  Vt.  551 ;  Sloan  i'.  Sommers,  2  Green,  N.J.  509  ;  Indianapolis  Ins. 
Co.  ?;.  Brown,  6  Blackf.  378  ;  Collier  v.  Nevill,  3  Dev.  32;  Vareck  v.  Crane,  3  Green's 
Ch.  128  ;  Brown  v.  Toells's  Admr.  5  Rand.  543 ;  Abrahams  v.  Bunn,  4  Burr.  2253. 

2  Hughes  V.  Wheeler,  8  Cowen,  77;  Johnson  v.  Johnson,  11  Mass.  359;  Edgell  v. 
Stanford,  supra. 

3  In  Burton's  case,  5  Rep.  69,  where  a  rent  of  .£20  Avas  granted  in  consideration  of 
£100  lent,  and  the  first  payment  was  to  be  made  more  than  a  year  and  a  cjuarter  after 
making  the  grant,  and  there  was  a  condition  in  the  deed  that  the  rent  should  cease  if 
the  grantor  should  repay  the  £100  in  twelve  months,  it  was  held  that  the  transaction 
was  not  usurious,  because  it  was  at  the  election  of  the  grantor  to  repay  the  £100,  and 
thus  defeat  the  rent.  And  in  Floyer  v.  Edwards,  Lofft,  596,  Lord  Mansfwkl &?C\A:  "  An 
actual  borrowing  of  money,  with  a  penalty' on  forbearance,  is  no  usury,  if  the  borrower 
can  discharge  himself  within  the  time."  And  in  Sliuck  v.  Wight,  1  Greene,  (Iowa,) 
128,  it  was  held  that  a  note  payable  two  years  after  date,  to  bear  interest  at  fifty  per 
cent,  after  it  was  due  until  paid,  was  not  usurious.  See  also  Vin.  Abr.  Usury  (C.) 
Roberts  v.  Trenayne,  Cro.  Jac.  507 ;    Garret  v.  Foot,  Comb.  133 ;    Groves  v.  Graves, 


CII.  XIV.]  OF   INTEREST   AND   USURY.  257 

the  forbearance  legal  interest,  and  as  much  more  as  the  creditor 
shall  be  obliged  to  pay  for  the  same  money,  this  is  not  a  usm-ious 
contract.^  And  even  if  us^urious  interest  be  actually  taken,  this, 
although  very  strong  evidence  of  an  original  usurious  bargain, 
is  not  conclusive,  but  may  be  rebutted  by  adecjuate  proof  or  ex- 
planation.2 

When  a  statute  provides  that  a  usurious  contract  is  wholly 
void,  such  a  contract  cannot  become  good  afterwards;  and  there- 
fore a  note  which  is  usurious,  if  therefore  void  in  its  inception,  is 
not  valid  in  the  hands  of  an  innocent  indorsee.^  But  if  a  note, 
or  any  securities  for  a  usurious  bargain,  be  delivered  up  by  the 
creditor  and  cancelled,  and  the  debtor  thereupon  promises  to  pay 
the  original  debt  and  lawful  interest,  this  promise  is  valid."* 

New  securities  for  old  ones  whicli  are  tainted  with  usury,  are 
equally  void  with  the  old  ones,  or  subject  to  the  same  defence.** 

1  Wash.  1  ;  Winslow  v.  Dawson,  1  Wash.  118 ;  Cutler  v.  How,  8  Mass.  2.57 ;  Pollard 
V.  Baylors,  6  Munf.  483;  Brock  r.  Thompson,  1  Bailey,  322;  Campbell  v.  Shields,  6 
Leigh,  517  ;  Gambril  v.  Rose,  S  Blackf.  140;  Long  v.  Storie,  10  E.  L.  &  E.  182;  Law- 
rence r.  Cowlcs,  13  111.  577  ;  Moore  v.  Hylton,  1  Dev.  Eq.  429  ;  Call.  v.  Scott,  4  Call, 
409;  Brockway  r.  Clark,  6  Ham.  45. 

1  Kimball  r.  Proprietors  of  the  Boston  Athajneum,  decided  by  the  S.  J.  C.  of  Massa- 
chusetts, in  March,  1855.  The  principal  ground  of  the  decision  was,  that  the  gist  of 
all  the  usury  laws  from  1641  to  1846,  is  the  taking  of  unlawful  profits,  and  here 
there  is  no  taking  of  any  profit  by  the  creditor,  who  is,  in  fact,  the  agent  of  the  debtor 
for  raising  the  money. 

-  Thus,  in  Fussil  v.  Brookes,  2  C.  &  P.  318,  which  was  an  action  of  debt  upon  a  bond 
for  the  payment  of  money  with  51.  per  cent,  interest,  it  was  held  that  proof  that  the  obligee 
had  received  interest  on  the  bond  at  7  1-2/.  per  cent.,  would  not  avoid  the  bond,  unless 
the  jury  were  satisfied  that  it  was  agreed  at  or  before  the  execution  of  the  bond,  that 
more  than  5l.  per  centf.  should  be  paid.     And  see  New  York  Fireman's  Ins.  Co.  v.  Ely, 

2  Cow.  705;  Hammond  v.  Smith,  17  Vt.  231  ;  Cummins  v.  Wire,  2  Halsted's  Ch.  73; 
Varick  r.  Crane,  3  Green's  Ch.  128;  Quarles  r.  Brannon,  5  Strobh.  151. 

^  Thus,  in  Lowe'  v.  Waller,  Doug.  736,  where  the  plaintiff  was  the  indorsee  of  a 
bill  of  exchange  originally  made  upon  an  usurious  contract,  although  he  received  it  for 
a  valuable  consideration,  and  was  entirely  ignorant  of  its  vice,  the  Court  of  King's 
Bench,  after  great  consideration,  held  that  inasmuch  as  the  statute  made  all  usurious 
contracts  void,  the  plaintiff  could  not  recover.  See  also  Ackland  v.  Pearce,  2  Camp. 
599 ;  AVilkie  v.  Roosevelt,  3  Johns.  Cas.  66  ;  Shober  v.  Hauser,  4  Dev.  &  Bat.  91  ; 
Chadbourn  v.  AVatts,  10  Mass.  121  ;  Hackley  v.  Sprague,  10  Wend.  113  ;  Lloyd  r.  Scott, 
4  Pet.  228;  Bridge  v.  Hubbard,  15  Mass.  96;  Paris  r.  King,  1  Stewart,  255  ;  Payne  v. 
Trezevant,  2  Bay,  23 ;  Gaillard  v.  Le  Seigneur,  1  McMuUan,  225  ;  Townsend  v.  Bush, 
1  Conn.  260.  But  it  is  otherwise,  if  the  statute  does  not  declare  the  contract  void  on 
account  of  the  usury.  Young  v.  Berkley,  2  N.  II.  410 ;  McGill  v. Ware,  4  Scam.  21  ; 
Tucker  r.  Wilamouicz,  3  Eng.  (Ark.)  157  ;  Creed  v.  Stevens,  4  Whart.  223  ;  Turner  v. 
Calvert,  12  S.  &  R.  46  ;  Fenno  v.  Sayre,  3  Alab.  458;  per  Story,  J.,  in  Fleckner  v.  N. 
S.  Bank,  8  Wheat.  354. 

*  Thus,  in  Barnes  i\  Hedley,  2  Taunt.  184,  where  the  parties  had  made  and  acted 
upon  an  usurious  agreement,  but  had  afterwards  stated  an  account,  and  agreed  upon 
the  sum  that  would  be  due  for  the  principal  with  legal  interest,  after  deducting  all  that 
had  been  paid  for  usurious  interest,  and  a  new  promise  was  made  to  pay  that  sum,  it 
was  held  that  such  promise  was  free  from  the  original  usury,  and  was  valid  in  law. 
See  Wicks  v.  Gogerley,  1  Ry.  &  Moody,  123.     And  see  infra,  p.  258,  n.  1. 

5  In  Tuthill  V.  Davis,  20  Johns.  285,  where  a  new  note,  without  any  new  considera- 

22* 


258  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XIV. 

Not  SO,  however,  if  the  usurious  part  of  the  original  securities  be 
expunged,  and  not  included  in  the  new  ;^  or  if  the  new  ones  are 
given  to  third  parties,. who  are  wholly  innocent  of  the  original 
usurious  transaction.^  And  if  a  debtor  suffer  his  usurious  debt 
to  be  merged  in  a  judgment  against  him,  it  is  then  too  late  for 
hiin  to  take  advantage  of  the  usury.^ 

So,  if  land  or  goods  be  mortgaged  to  secure  a  usurious  debt, 
and  afterwards  conveyed  to  an  innocent  party,  subject  to  such 
mortgage,  the  latter  cannot  set  up  the  defence  of  usury  in  answer 

tion,  was  given  to  take  up  a  note  tainted  witli  usury,  wliicli  was  in  the  hands  of  the 
original  party,  to  the  usurious  contract,  it  was  lield  that  tlie  last  note  was  tainted  with 
th(i  usury  of  the  first.  And  in  Wallvcr  v.  Bank  of  Washington,  3  How.  62,  Wai/ne,J., 
said:  "  Tiie  mere  change  of  securities  for  the  same  usurious  loan,  to  the  same  party 
who  received  the  usury,  or  to  a  person  having  notice  of  the  usury,  does  not  purge  the 
original  illegal  consideration,  so  as  to  give  a  right  of  action  on  the  new  security. 
Every  subsequent  security  given  for  a  loan  originally  usurious,  however  remote  or 
often  renewed,  is  void."  See  also  Preston  r.  Jackson,  2  Stark.  2-37  ;  Pickering  v.  Banks, 
Forrest's  Heps.  72 ;  Chapman  r.  Black,  2  B.  &  Aid.  589 ;  Bridge  v.  Hubbard,  15  Mass. 
96;  Simpson  v.  Fullenwider,  12  Ired.  338;  Hazard  v.  Smith,  21  Vt.  123;  Jackson  v. 
Jones,  13  Alab.  121  ;  Torrey  v.  Grant,  10  Sm.  &  M.  89  ;  Lowell  v.  Johnson,  14  Maine, 
240;  Warren  v.  Crabtree,  1  Greenl.  167;  Wales  v.  Webb,  5  Conn.  154;  Botsford  v. 
Sanford,  2  Conn.  276  ;  Scott  v.  Lewis,  id.  135  ;  Moncure  v.  Dermott,  13  Peters,  345; 
Steele  r.  Whipple,  21  Wend.  103;  Jackson  r.  Packard,  6  Wend.  415;  Peed  v.  Smith, 

9  Cow.  647  ;  Powell  v.  Waters,  8  Cow.  685 ;  Marsh  v.  Martindale,  3  B.  &  P.  154 ;  Ed- 
wards V.  Skirving,  1  Brev.  548. 

1  See  Wright  v.  Wheeler,  1  Camp.  165,  n.  In  this  case,  it  appeared  that  the  plaintiff 
had  in  1791  lent  the  defendant  £1,000,  for  the  security  of  which,  with  lawful  interest, 
a  bond  was  given,  and  the  defendant  also  agreed  to  give  the  plaintirt"  a  salary  of  .£50  a 
year,  as  a  clerk  in  his  brewery.  It  was  not  intended  that  the  plaintiff  should  perform 
any  service  for  the  defendant  there,  but  the  salary  was  a  mere  shift,  to  give  the  plaintiff 
more  than  lawful  interest  for  his  money.  In  1793.  one  year's  salary  having  been 
paid,  the  parties  agreed  that  it  should  be  deducted  from  the  principal,  the  deed  securing 
the  salary  cancelled,  and  a  fresh  bond  taken  for  the  remaining  principal,  with  5  per 
cent,  interest;  and  on  this  bond  the  present  action  was  brouglft.  Lawrence,  J.,  said: 
"  The  act  of  Parliament  only  makes  void  contracts  whereby  more  than  5  per  cent,  is 
secured.  The  original  contract  between  these  parties  was  certainly  usurious,  and  no 
action  could  have  been  maintained  on  the  lirst  bond  ;  but  there  was  nothing  illegal  in 
the  last  bond ;  it  ^yas  not  made  to  assure  the  performance  of  the  first  contract,  nor 
does  it  secure  more  than  5  per  cent,  interest  to  the  plaintiff".  The  parties  saw  they  had 
before  done  wrong ;  they  rectified  the  error  they  had  committed,  and  substituted  for  an 
illegal  contract  one  that  was  perfectly  fair  and  legal.  I  see  no  objection  to  their  doing 
that,  and  therefore  am  of  opinion  that  the  present  action  is  maintainable."  M'Clure 
V.  Williams,  7  Vt.  210.  Where  the  maker  of  a  note  infected  with  usury,  in  considera- 
tion that  the  holder  should  cancel  the  same,  promised  to  give  a  new  note  deducting  the 
usurious  excess,  and  it  was  held  such  promise  was  enforceable  in  law.  See  also  De 
Wolf  I'.  Johnson,  10  Wheaton,  367;  Cummins  v.  Wire,  2  Hals.  Ch.  73;  Postlethwaite 
V.  Garrett,  3  Mon.  345  ;  Bank  of  Monroe  v.  Strong,  Clarke,  76  ;   Chadbourn  v.  Watts, 

10  Mass.  121  ;  Hammond  v.  Hopping,  13  Wend.  505;  Miller  v.  Hull,  4  Deuio,  104. 
And  sec  supirt,  p.  257,  n.  4. 

-  Thus,  where  A  made  an  usurious  note  to  B,  who  transferred  it  to  C  for  a  valuable 
consideration,  without  notice  of  the  usury,  and  afterwards  A  gave  a  bond  to  C  for  the 
amount,  the  bond  was  held  not  to  be  affected  with  the  usury.  Cuthbart  v.  Haley,  8  T. 
R.  390.  And  see  per  Kent,  C.  J.,  in  Jackson  v.  Henry,  10  Johns.  185  ;  Ellis  v.  Warnes, 
Cro.  Jac.  33  ;  Powell  v.  Waters,  8  Cowen,  669  ;  Wales  v.  Webb,  5  Conn.  154;  Brown 
V.  Waters,  2  Maryl.  Ch.  Dccis.  201  ;  Aldrich  v.  Ilcynolds,  1  Barb.  Ch.  43. 

■^  Day  V.  Cummings,  19  Vt.  496;  Thatcher  v.  Garamoni  12  Mass.  268  ;  Thompson  v. 
Berry,  3  Johns.  Ch.  395 ;  Jackson  v.  Bowen,  7  Cow.  20 ;  Jackson  v.  Henry,  10  Johns.  185. 


en.  XIV.]  OF   INTEREST   AND    USURY.  259 

to  an  action  to  enforce  the  mortgage.^  And  if  A  owes  B  a  usu- 
rious debt,  against  which  A  coald  make  ,a  complete  or  partial 
defence,  but  pays  the  debt,  usury  and  all,  by  transferring  #3  B  a 
valid  note  or  debt  of  C,  then  when  C  is  called  upon  to  pay  this 
debt  to  B,  C  cannot  make  the  defence  which  A  could  have 
done ;  for  the  debt  due  from  C  is  not  aifected  by  the  usurious 
taint  of  the  original  debt  from  A  to  B.^ 

Usurers  resort  to  many  devices  to  conceal  their  usury  ;  and 
sometimes  it  is  very  difficult  for  the  law  to  reach  and  punish  this 
offence.  A  common  method  is  for  the  lender  of  money  to  sell 
some  chattel,  or  a  parcel  of  goods,  at  a  high  price,  the  lender 
paying  this  price  in  part  as  a  premium  for  the  loan.^  In  England 
it  would  seem  from  the  books  to  be  quite  common  for  one  who 
discounts  a  note,  to  do  this  nominally  at  legal  rates,  but  to  fur- 
nish a  part  of  the  amount  in  goods  at  a  very  high  valuation.^  In 
all  cases  of  this  kind,  or  rather  in  all  cases  where  questions  of  this 
kind  arise,  the  court  endeavors  to  ascertain#the  real  character  of 
the  transaction.'^     It  is  always  suspicious,  for  the  obvious  reason 

1  Mechanics'  Bank  v.  Edwards,  1  Barb.  271;  Green  v.  Kemp,  13  Mass.  51.5  ;  Stoney 
V.  Am.  Life  Ins.  Co.  11  Paige,  635;  Sands  v.  Ciuirch,  2  Seld.  347. 

-  Stanley  v.  Kempton,  30 'Maine,  118;  Marchant  v.  Dodgin,  2  M.  &  Scott,  632. 

3  Sec  Pratt  v.  Willey,  1  Esp.  40,  wliere  to  an  action  upon  a  promissory  note  usury 
was  pleaded,  the  defendant  attempted  to  prove  that  the  plaintiff  had,  in  discounting  the 
note,  given  in  part  payment  a  diamond  ring,  for  wluch  he  charged  much  more  than  its 
actual  value.  It  was  said  by  Erskine,  of  counsel  for  the  plaintiil",  and  assented  to  by 
Lord  Kcnijon,  that  his  lordship  and  Mr.  Justice  Buller  had  ruled  on  former  occasions, 
that  if,  in  discounting  a  bill,  the  party  discounting  it  gives  goods  in  part ;  that  if  these 
goods  are  of  a  certain  ascertained  value,  and  given  at  that  value,.that  is  not  usury ;  but 
if  the  party  so  discounting  the  bill  makes  the  holder  of  it  take  the  goods  at  a  higher 
value,  that  shall  be  deemed  usury ;  for  a  party,  by  substituting  goods  for  money,  shall 
not,  by  color  of  their  pretended  value,  take  above  legal  interest,  and  evade  the  statute. 
And  in  Doe  d.  Davidson  v.  Barnard,  1  Esp.  11,  where  a  loan  was  effected  by  the  bor- 
rower's taking  stock  at  75  per  cent.,  when  it  was  worth  only  73  per  cent..  Lord  Kenyan 
held  the  transaction  usurious.  See  also  Lowe  v.  Waller,  Doug.  736  ;  Barker  v.  Van- 
sommer,  1  Brown's  Ch.  149.  And  where  upon  a  contract  or  loan,  property  of  any  kind 
is  received  of  less  value  than  the  actual  value  of  the  loan,  the  transaction  is  usurious. 
Morgan  v.  Schermerhorn,  1  Paige,  544 ;  Delano  v.  Kood,  1  Oilman,  690  ;  Grosvenor  v. 
Elax  &  Hemp  Mannf.  Co.  1  Green's  Ch.  453  ;  Valley  Bank  v.  Stribbling,  5  Eand.  182; 
Moore  v.  Vance,  3  Dana,  361 ;  Warfield  v.  Boswell,  2  Dana,  224  ;  Burnhani  v.  Gentrys,  7 
Monroe,  354  ;  Collins  v.  Secreh,  ib.  335  ;  Weatherhcad  v.  Boyers,  7  Yergcr,  545  ;  Pratt 
V.  Adams,  7  Paige,  615;  Eagleson  v.  Shotwell,  1  Johns.  Ch.  536 ;  Ehringhaus  v.  Ford, 
3  Ired.  522  ;  Stribbling  v.  Bank  of  the  Vallcv,  5  Eand.  132;  Douglass  w.  McChes-ney, 
2  Rand.  109  ;  Dry  Dock  Bank  v.  Life  Ins.  &  Trust  Co.  3  Comst.  344  ;  Rose  v.  Dick- 
son, 7  Johns.  196;  Swanson  v.  White,  5  Humph.  373  ;  Greenhow  v.  Harris,  6  Munf. 
472  ;  Bank  of  U.  S.  v.  Owens,  2  Peters,  527  ;  -Archer  r.  Putnam,  12  S.  &  M.  286.  But 
if  the  transaction  is  a  bond  fide  sale,  the  law  docs  not  prohibit  the  sale  of  depreciated 
stock  or  bank  notes  at  more  than  their  par  value.  Bank  of  United  States  v.  VVagener, 
9  Peters,  400 ;  AVilloughby  v.  Comstock,  3  Edws.  Ch.  424  ;  Slosson  v.  Duff",  1  Barb. 
432. 
*  See  cases  cited  in  preceding  note. 
5  Andrews  v.  Pond,  13  Peters,  76 ;  Beete  v.  Bidgood,  7  B.  &  Cr.  458. 


260  ELEMENTS    OF   MERCANTILE    LAW.  [CII.  XIV. 

that  one  who  wants  to  borrow  money,  is  not  very  likely  to  desire 
at  the  same  time  to  buy  goods  at  a  high  price.  Bat  the  jury 
decid^all  questions  of  this  kind  ;  and  it  is  their  duty  to  judge  of 
the  actual  intention  of  the  parties,  from  all  the  evidence  offered.^ 
If  that  intention  is  substantially  that  one  should  loan  his  money 
to  another,  who  shall  therefor,  in  any  manner  whatever,  pay  to 
the  lender  more  than  legal  interest,  it  is  a  case  of  usury.  "Where 
the  real  truth  is  a  loan  of  money,"  said  Lord  Mansfield^  "  the 
wit  of  man  cannot  find  a  shift  to  take  it  out  of  the  statute."  If 
this  great  judge  meant  only  that  whenever  legal  evidence  shows 
the  transaction  to  be  a  usurious  loan,  the  law  pays  no  respect 
whatever  to  any  pretence  or  disguise,  this  is  certainly  true.  But 
the  wit  of  man  does  undoubtedly  contrive  some  "  shifts,"  which 
the  law  cannot  detect.  There  seems  to  be  a  general  rule  in  these 
cases  in  reference  to  the  burden  of  proof;  the  borrower  must  first 
show  that  he  took  the  goods  on  compulsion ;  and  then  it  is  for 
the  lender  to  prove(»that  no  more  than  their  actual  value  was 
received  or  charged  for  them.^ 

If  one.  should  borrow  stock  at  a  valuation  much  above  the 
market  rate,  and  agree  to  pay  interest  on  this  value  for  the  use  of 
the  stock  to  sell  or  pledge,  this  would  be  usurious.*  Whether  it 
would  be  sufficient  to  discharge  this  taint,  for  the  lender  to  show 
that  the  dividends  on  the  stock  actually  were,  and  were  expected 
to  be,  as  high  as  the  interest  on  the  valuation,  so  that  he  makes 
no  gain  by  the  transaction,  may  not  be  certain. 

So,  one  may  lend  his  stock,  and  give  the  borrower  the  option 

1  Thus,  in  Doe  d.  Metcalf  v.  Browne,  1  Holt,  N.  P.  295,  where  A,  in  consideration  of 
a  certain  sum  of  money,  conveyed  premises  to  B,  and  at  the  same  time  an  agreement 
was  entered  into  between  them  that  A  should  repurchase  the  same  premises  within 
fifteen  months,  at  a  considerable  advance  upon  the  original  purchase-money,  and  B 
agreed  to  sell  and  reconvey  at  such  advance,  it  was  held,  that  in  point  of  law,  such 
contract  was  not  usurious,  unless  it  was  meant  as  a  cover  for  a  loan  of  money,  which 
was  a  question  of  fact  for  the  jury.  And  see  Andrews  v.  Pond,  supra ;  Stevens  v. 
Davis,  3  Mete.  211 ;  Carstairs  v.  Stein,  4  M.  &  S.  192  ;  Smith  v.  Brush,  8  Johns.  84 ; 
Thomas  v.  Cartheral,  5  G.  &  J.  23 ;  Tyson  v.  Rickard,  3  H.  &  J.  109. 

'^  In  Floyer  v.  Edwards,  Cowp.  112. 

^  See  per  Lord  Ellenhorough,  in  Davis  v.  Hardacre,  2  Camp.  375 ;  Rich  v.  Topping, 
1  Esp.  176  ;  Hargreaves  v.  Hutchinson,  2  Ad.  &  E.  12.  But  in  Grosvenorz;.  The  Flax 
&  Hemp  Manuf.  Co.  1  Green's  Ch.  453,  it  was  held  that  proo?  that  part  of  the  loan 
was  advanced  in  goods  or  stock,  would  not  throw  on  the  opposite  party  the  burden  of 
proving  the  value  of  such  goods  or  stock;  but  the  party  charging  the  usury  must  not 
only  prove  that  the  goods  or  stock  constituted  a  part  of  the  loan,  but  also  that  they 
were  put  off  at  a  price  beyond  their  value. 

*  Parker  v.  Ramsbottom,  3  B.  &  Cr.  257.  In  Astor  r.  Price,  7  Martin,  N.  S.  408,  it 
was  held  that  where  the  lender  gave  bank  shares,  and  charged  interest  upon  them  at  a 
higher  price  than  that  of  the  market,  the  contract  was  usurious. 


Cir.  XIV.]  OF   INTEREST   AND    USURY.  261 

to  replace  the  stock,'  or  to  pay  for  it  at  even  a  high  value,  with 
interest.^  But  if  he  reserves  this  option  to  himself,  the  bargain 
is  usurious,  because  it  gives  the  lender  the  right  to  claim  more 
than  legal  interest.^  So,  the  lender  may  reserve  either  the  divi- 
dends or  the  interest,  if  he  elects  at  the  time  of  the  loan;^  but 
he  cannot  reserve  the  right  of  electing  at  a  future  time,  when  he 
shall  know-  what  the  dividends  are. 

A  contract  may  seem  to  be  two,  and  yet  be  but  one,  if  the. 
seeming  two  are  but  parts  of  a  whole.^  Thus,  if  A  borrows  one 
thousand  dollars,  and  gives  a  note  promising  to  pay  legal  interest 
for  it,  and  then  gives  another  note  for  (or  otherwise  promises  to 
pay)  a  further  sum,  in  fact  for  no  consideration  but  the  loan,  this 
is  all  one  transaction,  and  it  constitutes  an  usurious  c'ontract.^ 

But  if  there  be  a  loan  on  legal  terms,  with  no  promise  or  obli- 
gation on  the  part  of  the  borrower  to  pay  any  more,  this  would 

1  Forrest  v.  Elwcs,  4  Vesey,  492. 

'■^  In  Tate  v.  WcUings,  3  T.  R.  531,  A  lent  money  to  B,  which  was  produced  by  the 
sale  of  stocks,  on  an  agreement  that  B  should  replace  the  stock  by  a  certain  day,  or 
repay  the  money  on  a  subsequent  day,  with  such  interest  as  the  stock  itself  would  have 
produced  in  the  meantime.  The  jury  having  found  that  the  transaction  was  an  honest 
loan  of  stock,  the  court  refused  to  set  aside  the  verdict.  And  per  Aslnirst,  J. :  "  The 
agreement  was,  that  tlie  defendant  should  have  the  use  of  the  money,  wliich  was  the 
produce  of  the  stock,  paying  the  same  interest  which  the  stock  would  have  produced, 
with  liberty  to  replace  the  stock  on  a  certain  day,  till  which  day  the  lender  was  to  run 
the  risk  of  a  fall  in  the  stocks  ;  but  he  stipulated  that,  if  it  were  not  replaced  by  that 
time,  he  would  not  run  that  risk  any  longer,  but  would  be  repaid  the  sum  advanced  at 
all  events.  And  from  this  contract  he  derived  no  advantage,  for  he  was  only  to  receive 
in  the  meantime  the  same  interest  which  the  stock  would  have  produced." 

3  Thus,  in  White  v.  Wright,  3  B.  &  Cr.  273,  where  A  loaned  stock  to  B,  and 
reserved  tlie  dividends  to  himself  by  way  of  interest,  and  also  the  option  of  deciding 
at  a  future  day  whether  he  would  have  the  stock  replaced,  or  the  sum  arising  from  the 
sale  of  it  repaid  to  him  in  money,  with  5  per  cent,  interest,  the  court  held  the  transac- 
tion usurious,  and  per  Baijley,  J. :  "  It  is  not  illegal  to  reserve  the  dividends  by  way  of 
interest  for  stock  lent,  although  they  may  amount  to  more  than  5/.  per  cent,  on  the 
produce  of  it,  for  the  price  of  the  stock  may  fall,  and  the  borrower  would  then  be  the 
gainer ;  but  the  option  must  be  made  at  the  time  of  the  loan.  The  instruments  set  out 
in  this  case,  show  that  an  option  to  be  exercised  in  the  future  was  reserved.  It  has 
been  argued  that  the  agreement  enabled  the  defendant,  at  all  events,  if  she  chose,  to 
replace  the  stock ;  but  the  agreement  is  to  replace  it  (f  required,  and  the  bond  gave 
the  lender  power  to  enforce  the  repayment  of  the  principal,  which  was  never  put 
in  hazard.  Upon  principle,  therefore,  as  well  as  on  the  authority  of  Barnard  v.  Young, 
17  Ves.  44,  I  think  that  the  plaintiffs  are  not  entitled  to  recover  in  this  action."  See 
also,  to  the  same  effect,  Barnard  i;.  Young,  17  Ves.  44;  Chippindale  v.  Thurston,  1 
M.  &  Mai.  411. 

*  Potter  V.  Y'ale  College,  8  Conn.  52 ;  White  v.  Wright,  supra. 

^  See  Warren  v.  Crabtree,  1  Greenleaf,  171. 

^  See  WHiite  v.  Wright,  5  B.  &  Cr.  273;  Swartwout  v.  Payne,  19  Johnson,  294; 
Clark  V.  Badgley,  3  Halst.  233 ;  Postlethwaite  r.  Garrett,  3  Monroe,  345  ;  Fitch  v. 
Hamlin,  1  Root,  110  ;  Gray's  Ex'rs  v.  Brown,  22  Alab.  273  ;  Lear  v.  Yarncl,  3  A.  K. 
Marsh.  419;  Willard  i-.  Reeder,  2  McCord,  369.  And  it  has  been  held,  that  if  the 
promise  to  pay  tlic  usury  be  by  parole,  the  principal  agreement  being  in  writing,  this 
would  avoid  the  whole  contract.  Macomber  v.  Dunham,  8  Wend.  550 ;  Hammond  v. 
Hopping,  1 3  Wend.  505 ;  Merrills  v.  Law,  9  Cow.  65  ;  contra,  Butterfield  v.  Kidder,  8 
Pick.  512. 


262  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XIV. 

not  be  invalidated  by  a  mere  understanding  that  the  borrower 
would,  when  the  money  was  paid  by  him,  make  a  present  to  the 
lender  for  the  accon:imodation.  "And  if,  after  a  paynnent  has  been 
made,  which  discharged  all  legal  obligation,  the  payer  volun- 
tarily adds  a  gift,  this  would  not  be  usurious.  But  in  every  such 
case  the  question  for  a  jury  is,  what  was  this  additional  transfer 
of  money,  in  fact;  was  it  a  voluntary  gift,  or  was  it  the  payment 
of  a  debt  ? 

A  foreign  contract,,  valid  and  lawful  where  made,  may  be 
enforced  in  a  State  in  which  such  a  contract,  if  made  there, 
would  be  usurious.^  But  if  usurious  where  it  was  made,  and,  by 
reason  of  that  usury,  wholly  void  in  that  State,  if  it  is  put  in 
suit  in  another  State  where  the  penalty  for  usury  is  less,  it  cannot 
be  enforced  under  this  mitigated  penalty,  but  it  is  wholly  void 
there  also.^ 


SECTION   III. 

OF   A   CnAKGE   FOR    RISK   OR   FOR   SERVICE. 

It  is  undoubtedly  lawful  for  a  lender  to  charge  an  extra  price 
for  the  risk  he  incurs,  provided  that  risk  be  perfectly  distinct  from 
the  merely  personal  risk  of  the  debtor's  being  unable  to  pay.  If 
any  thing  is  paid  for  this  risk,  it  is  certainly  usury.  But  if  it  js 
a  part  of  the  bargain  that  the  debt  shall  not  be  paid  if  a  vessel 
or  goods  do  not  arrive  in  safety,  as  is  the  case  in  a  loan  on  bot- 
tomry, or  on  respondentia,  (as  we  state  in  our  chapter  on  the 
Law  of  Shipping,)  this  is  not  usury.^     And  by  the  same  prin- 


1  Tuvpin  V.  Povall,  8  Leigh,  93  ;  Davis  v.  Garr,  2  Seld.  124;  Harvey  v.  Archbold,  3 
B.  &  Cr.  626;  Thompson  y.'Powles,  2  Sim.  211 ;  Do  Wolf  i'.  Johnson,  10  Wheat.  367; 
Pratt  V.  Adams,  7  Paige,  615;  Nichols  v.  Cosset,  1  Eoot,  294  ;  M'Qaeen  v.  Burns,  I 
Hawks,  476  ;  Gale  v.  Eastman,  7  Mctc.  14  ;  M'Guire  v.  Parker,  1  Wash.  368. 

^  Houghton  V.  Page,  2  N.  H.  42. 

3  In  Soome  v.  Gleen,  1  Sid.  27,  which  was  debt  upon  a  bond,  the  condition  of  the 
bond  was,  that,  if  a  certain  ship  should  go  to  the  East  Indies,  and  return  safely  to 
London,  or  if  the  owner  or  the  goods  should  return  safe,  the  defendant  should'pay  the 
plaintiff  the  principal,  together  with  £40"  for  every  .£100;  but  if  the  ship,  &c.,  should 
perish  by  fire,  &c.,  then  the  plaintiff  should  have  nothing.  It  was  objected  that  the 
contract  was  usurious.  But  the  court  held  that  such  contracts,  called  "bottomry,"  tend 
to  the  increase  of  trade,  and  tliat  they  were  not  usurious.  See  also,  to  the  same  effect, 
Sharpley  v.  Hurrel,  Cro.  Jac.  208 ;  Chesterfield  v.  Janser,  1  Wils.  286,  1  Atk.  342 ; 
Roberts  v.  Tremaync,  Cro.  Jac.  507  ;  Rucher  v.  Conyngham,  1  Pet.  Adm.  295  ;  The 
Sloop  Mary,  1  Paine,  C.  C.  675 ;  Thorndike  v.  Stone,  11  Pick.  183. 


CII.  XIV.]  OP   INTEREST   AND   USURY.  263 

ciple,  if  one  buys  a!i  annuity  to  end  at  the  annuitant's  death,^  or 
a  life-estate,^  even  on  exorbitant  and  oppressive  terms,  against 
which  a  court  of  equity  would  relieve,  still,  it  is  not  a  usurious 
contract,  provided  the  purchase  be  actual,  and  not  a  mere  dis- 
guise. 

So,  one  may  charge  for  services  rendered,*^  for  brokerage,^  or 
for  rate  of  exchange,^  and  may  even  cause  a  domestic  loan  or 
discount  to  be  actually  converted  into  a  foreign  one,  so  as  to 
charge  the  exchange ;  and  this  would  not  be  usurious.^  But 
here,  as  before,  and,  indeed,  throughout  the  law  of  usury,  it  is 
necessary  to  remember  that  the  actual  intention,  and  not  the  ap- 
parent purpose  or  the  form  of  the  transaction,  must  determine  its 
character.  So,  if  one  lends  money  to  be  used  in  business,  and 
lends  it  upon  such  terms  that  he  becomes  a  partner  in  fact  with 

1  Fountain  v.  Grymes,  1  Bulstrode,  36.  The  plaintiff,  in  his  case,  lent  the  defendant 
£100,  wiio  therefore  executed  to  the  plaintiff  a  bond,  which  was  conditioned  for  the 
payment  to  the  plaintiff  of  £20  a  year  for  three  lives,  and  no  mention  was  made  of  the 
return  of  the  principal  sura ;  it  was  held  that  this  was  not  within  the  statute,  and  judg- 
ment was  given  for  the  plaintiff.  See,  also,  Eoberts  v.  Tremoille,  1  Kollc,  47  j  Floyer 
V.  Sherard,  Ambler,  18;  Lloyd  v.  Scott,  4  Pet.  205.  But,  in  Richards  v.  Brown, 
Cowper,  770,  it  was  held  that  an  annuity  u]jon  the  borrower's  life,  with  a  right  to  re- 
deem within  three  months,  was  usurious,  as  involving  only  the  contingency  of  the  bor- 
rower's dying  within  the  three  months.  Murray  v.  Harding,  2  Black.  859  ;  King  r. 
Drury,  2  Lev.  7 ;  White  v.  Wright.  3  B.  &  Cr.  273.  • 

-  Symonds  v.  Cockcrill,  Noy,  157;  Cotterel  v.  Harrington,  Brownl.  Golds.  ISO;  Ful- 
ler's case,  4  Leon.  208;  King  v.  Drury,  2  Lev.  7.  But  see  Doe  v.  Gooeh,  3  B.  &  Aid. 
664. 

■*  Thus,  where  A  received  of  B  a  sum  exceeding  the  lawful  rate  of  interest,  as  com- 
pensation for  obtaining  money  for  him  at  a  bank,  on  A's  own  security,  this  was  held 
not  to  constitute  usury.  Hutchinson  v.  Hosmer,  2  Conn.  341.  See,  also,  Harris  i'. 
Boston,  2  Camp.  348  ;  Ex  parte  Patrick,  1  Mont.  &  Ayr.  385  ;  Brown  v.  Harrison,  17 
Ala.  774;  Rowland  z-.  Bull,  5  B.  Mon.  146;  M'Kesson  v.  M'Dowell,  4  Dev.  &  Bat. 
120;  Auriol  v.  Thomas,  2  T.  R.  52;  Coliot  v.  Walker,  2  Anstruther,  496;  Hammett 
r.  Yea,  1  B.  &  P.  156  ;  Masterman  v.  Cowrie,  3  Camp.  488;  Ex  parte  Jones.  17  Vcsey, 
332 ;  Ex  parte  Henson,  1  Haddock,  112 ;  Ex  parte  Gwynn,  2  Dca.  &  Ch.  12  ;  Kent  v. 
Phelps,  2  Day,  483  ;  Hall  v.  Daggett,  6  Cow.  657  ;  Nourse  v.  Prime,  7  Johns.  Ch.  79  ; 
Trotter  v.  Curtis,  19  Johns.  160;  Suvdam  v.  Westfall,  4  Hill,  211  ;  Suydam  v.  Bartle, 
10  Paige,  94;  Bullock  v.  Boyd,  Hoff.  Ch.  294 ;  Holford  v.  Blatchfor'd,  2  Sand.  Ch. 
149  ;  Seymour  v.  Marvin,  11  Barb.  80.  But  the  amount  so  charged  or  taken  must  not 
exceed  what  is  usually  taken  in  the  course  of  business ;  otherwise,  the  contract  will  be 
usurious.  Kent  v.  Phelps,  2  Day,  483  ;  Bartlett  v.  Williams,  1  Pick.  294  ;  Stevens  v. 
Davis,  3  Met.  211  ;  De  Forest  v.  Strong,  8  Conn.  519. 

*  Brown  v.  Harrison,  17  Ala.' 774.     And  see  cases  cited  in  the  preceding  note. 

^  Merritt  v.  Benton,  10  Wend.  116.  In  this  case,  A  gave  his  promissory  note  to  B, 
which  included  one  per  cent,  above  the  legal  rate  of  interest,  as  the  difference  of  ex- 
change between  the  place  where  B,  the  payee,  resided,  and  the  place  where  the  note 
was  payable ;  and  it  was  held  that  this  did  not  amount  to  usury.  See,  also,  Marvinc 
V.  Hymers,  2  Kern.  223  ;  Leavitt  v.  De  Launy,  4  Comst.  364  ;  Commercial  Bank  v. 
Nolan,  7  How.  (Miss.)  508;  Andrews  v.  Pond,  13  Pet.  65;  Buckingham  v.  McLean, 
13  How.  151;  Merritt  v.  Benson,  10  W^cnd.  116;  Williams  i'.  Hance,  7  Paige,  581; 
Ontario  Bank  v.  Scbermerhorn,  10  Paige,  109:  Cayuga  County  Bank  v.  Hunt,  2  Hill, 
635  ;  Holford  v.  Blatchford,  2  Sandf.  Ch.  149.' 

^  Cuyler  v.  Sandford,  13  Barb.  339, 


264  ELEMENTS    OF   MERCANTILE   LAAV.  [CIL  XIV. 

those  who  use  it,  taking  his  share  of  the  profits,  and  becoming 
liable  for  the  losses,  this  is  not  usurious.^ 

So,  if  one  enters  into  a  partnership,  and  provides  money  for  its 
business,  and  the  other  party  is  to  bear  all  the  losses,  and  also  to 
pay  the  capitalist  more  than  legal  interest  as  his  share  of  the 
profits,  this  is  not  usurious,  because  there  is  no  loan,  if  there  be 
in  fact  a  partnership.^  If,  however,  there  be  only  a  pretended 
partnership,  in  order  to  disguise  the  fact  of  the  loan,  this  would 
be  usurious,  although  very  possibly  the  lender  might,  as  to  a 
third  party,  lay  himself  open  to  a  liability  for  debts  incurred,  by 
reason  of  his  interest  in  the  profits.^ 

The  banks  always  get  more  than  legal  interest  by  their  way 
of  discounting  notes  and  deducting  the  whole  interest  from  the 
amount  they  givep  This  is  perfectly  obvious  if  we  take  an  ex- 
treme case ;  as  if  a  bank  discounted  a  note  of  a  thousand  dollars 
at  ten  years,  in  Massachusetts,  the  borrower  would  receive  four 
hundred  dollars,  and,  at  the  end  of  ten  years,  he  would  pay  back 
the  four  hundred  dollars,  and  six  hundred  dollars  for  the  use  of 
it.  But  this  method  is  now  established  by  usage  and  sanctioned 
by  law.^ 

1  Fcreday  v.  Hordern,  1  Jac.  144  ;  Morisset  v.  King,  2  Burr.  891. 

2  Gilpin  V.  Enderby,  1  D.  &  Ey.  .OTO.  In  this  case,  A,  being  established  in  trade, 
and  wishing  to  increase  his  capital,  entered  into  a  deed  of  copartnership  for  ten  years, 
with  B,  who  advanced  £20,000,  upon  a  covenant  that  he  should  receive  £2,000  a  year 
during  the  partnership,  out  of  the  profits,  if  there  were  any,  and  if  none,  out  of  the 
capital ;  that  he  should  not  be  answerable  for  any  of  the  losses  or  expenses  incident  to 
the  concern,  and  that  the  business  should  be  carried  on  in  the  name  of  A  only ;  that, 
at  the  end  of  the  ten  years,  if  the  partnership  determined  by  efflux  of  time,  he  should 
be  repaid  the  £20,000,  by  instalments,  at  three  months'  date,  bearing  legal  interest; 
and  that,  if  default  should  be  made  in  the  annual  payment  of  £2,000,  or  the  joint 
capital  should  be  at  any  time  reduced  to  £20,000,  then  he  should  be  at  liberty  to  termi- 
nate the  partnership,  and  repay  himself  the  £20,000  advanced,  immediately.  Held, 
that,  upon  the  face  of  the  deed,  A  and  B  were  partners,  and  that  there  was  no  loan  of 
money  within  the  meaning  of  the  statute  of  usury.  And  see  Fereday  v.  Hordern, 
supra. 

3  Huston  V.  Moorhead,  7  Penn.  St.  45 ;   Morse  v.  Wilson,  4  T.  R.  353. 

*  In  Thornton  v.  Bank  of  Washington,  3  Pet.  36,  Mr.  Justice  Story  says  :  "  The  de- 
fence set  up  against  tliis  action  by  the  defendant  is,  that  the  transaction  is  usurious 
within  the  meaning  of  the  statute  of  Maryland  against  usury,  which  (it  is  admitted)  is 
substantially  like  the  English  statute  upon  the  same  subject.  To  sustain  the  defence, 
it  has  been  urged  that  the  receipts  of  the  interest  in  advance  for  sixty-four  days,  upon 
the  discount  of  the  note,  is  usury.  But  we  are  all  of  opinion  that  the  taking  of  interest 
in  advance  upon  the  discount  of  notes,  in  the  usual  course  of  business,  by  a  bank,  is 
not  usury.  The  doctrine  has  been  long  settled,  and  is  not  now  open  for  controversy." 
The  following  cases  hold  the  same  :  Iloyt  r.  Bridgewater  Co.  2  Halst.  Ch.  253,  625 : 
Manhattan  Co.  v.  Osgood,  15  Johns.  162;  Duncan  v.  The  Maryland  Savings  Institu- 
tion, 10  G.  &  J.  31 1 :  Bank  of  Utica  (,'.  Phillips,  3  Wend.  408 ;  Utica  Ins.  Co.  v.  Blood- 
good,  4  Wend.  652;  Bank  of  Utica  v.  Wager,  2  Cow.  712;  Marvine  v.  Hymers,  2 
Kern.  223  ;  Stribbling  v.  Bank  of  the  Valley,  5  Rand.  132;  Sessions  v.  Richmond,  1 
R.  I.  298  ;    Haas  v.  Flint,  8  Blackf.  67  ;   State  Bank  v.  Hunter,  1  Dev.  100;  Ticorno 


CII.  XrV.]  OF  INTEREST   AND   USURY.  265 


SECTION    IV. 

OF    THK    SALE    OF   NOTES. 

There  are,  perhajis,  no  questions  in  relation  to  interest  and 
usury,  of  more  importance  than  those  which  arise  from  the  sale 
of  notes  or  other  securities.  In  the  first  place,  there  is  no  doubt 
whatever  that  the  owner  of  a  note  has  as  good  a  right  to  sell  it 
for  the  most  he  can  get,  as  he  would  have  to  sell  any  goods  or 
wares  which  he  owned.  There  is  here  no  question  of  usury, 
because  there  is  no  loan  of  money,  nor  forbearance  of  debt.  But, 
on  the  other  hand,  it  is  quite  as  certain  that  no  one  has  a  right 
to  make  his  own  note,  and  sell  that  for  what  he  can  get;  for  this, 
while  in  appearance  the  sale  of  a  note,  is  in  fact  the  giving  of  a 
note  for  money.  It  is  a  loan  and  a  borrowing,  and  nothing  else. 
And  if  the  apparent  sale  be  for  such  a  price  that  the  seller  pays 
more  than  legal  interest,  or,  in  other  words,  if  the  note  bear  in- 
terest and  is  sold  for  less  than  its  face,  or  is  not  on  interest,  and 
more  than  interest  is  discounted,  it  is  a  usurious  transaction. 
Supposing  these  two  rules  to  be  settled,  the  question  in  each 
case  is,  under  which  of  them  does  it  come,  or  to  which  of  them 
does  it  draw  nearest. 

We  are  not  aware  of  any  general  principle,  so  likely  to  be 
of  use  in  determining  these  questions,  as  this;  if  the  seller  of  a 
note  acquired  it  by  purchase,  or  if  it  is  his  for  money  advanced 
or  lent  by  him  to  its  full  amount,  he  may  sell  it  for  what  he  can 
get ;  but  if  he  be  the  maker  of  the  note  or  the  agent  of  the  maker, 
and  receives  for  the  note  less  than  its  face  after  a  lawful  discount, 
it  is  a  usurious  loan.  In  other  words,  the  first  holder  of  a  note 
(and  the  maker  of  a  note  is  not,  and  cannot  be,  its  first  holder) 
must  pay  the  face  -of  the  note,  or  its  full  amount.  And  after 
paying  this,  he  may  sell  it,  and  any  subsequent  purchaser  may 


Bank  i>.  Johnson,  31  Maine,  414;  Cole  v.  Lockhart,  2  Cart.  (Ind.)  631;  McGill  v. 
Ware,  4  Scam.  21.  Sec,  also,  Fleckner  r.  United  States  Bank,  8  Wheat.  354  ;  Maine 
Bank  v.  Butts,  9  Mass.  49  ;  N.  Y.  Fireman's  Ins.  Co.  v.  Ely,  2  Cow.  703.  But  this 
practiee  is  strictly  confined  to  negotiable  paper,  having  a  short  time  to  rnn.  Mowry  v. 
Bishop,  5  Paige,  98;  per  Sutherland,  J.,  in  N.  Y.  Fireman's  Ins.  Co.?;.  Ely,  su/3ra  ; 
Eaton  V.  Bell,  5  B.  &  Aid.  40  ;  Caliot  v.  Walker,  2  Anstruther,  496.  And  see  Barnes 
V.  AYorlich,  Cro.  Jac.  25 ;  Grysill  v.  Whichcott,  Cro.  Car.  283. 

23* 


266  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIV. 

sell  it,  as  merchandise.^  The  same  rule  (if  it  be  law,  of  which 
we  cannot  doubt,)  must  apply  to  corporations  and  all  other 
bodies  or  persons  who  issue  their  notes  or  bonds  on  interest.^  If 
sold  by  brokers  for  them,  for  less  than  the  full  amount,  it  is 
usurious.  Nor  can  such  notes  come  into  the  market  free  from 
the  taint  and  the  defence  of  usury,  unless  the  first  party  who 
holds  them,  pays  for  them  their  full  value. 

But  then  comes  another  question.  If  a  note  be  offered  for 
sale,  and  be  sold  for  less  than  its  face,  and  the  purchaser  supposes 
himself  to  buy  it  from  an  actual  holder  and  not  from  the  maker, 
can  the  maker  interpose  the  defence  that  it  was  actually  usu- 
rious, on  the  ground  that  the  seller  was  only  his  agent.  We 
should  say  that  he  could  not;  that  there  can  be  no  usury  unless 
this  is  intended;  and  that  the  guilty  intention  of  one  party  can- 
not affect  another  party  who  was  innocent.  Undoubtedly,  a 
note,  originally  usurious,  is  not  healed,  so  far  as  the  owner  is  con- 
cerned, by  transfer  to  an  innocent  holder.  The  indorsers  may  be 
liable  to  the  holder;  but,  whatever  defence  the  maker  could  have, 
on  the  ground  of  usury,  against  the  first  holder,  he  may  always 
have  against  any  subsequent  holder.  This  is  because  there  was 
actual  usury  at  the  beginning;  that  is,  one  lent  and  the  other 
borrowed,  both  knowing  that  more  than  legal  interest  was  paid. 
But  in  the  case  of  an  innocent  purchaser,  or,  rather,  of  one  who 
supposes,  and  has  a  right  to  suppose,  that  he  is  a  purchaser,  he 
did  not  lend  his  money  at  all ;  he  only  bought  a  security  with  it; 
and,  therefore,  there  is  no  usury .^ 

We  should,  however,  say  that,  when  a  maker  shows,  that  the 
apparent  seller  was  only  his  agent,  as  evidence,  that  the  note 
passed  from  him  usuriously,   he  thereby  casts  upon  the  ]3uyer 

1  The  following  cases  will  be  found  to  uphold  the  principles  laid  down  in  the  text. 
Lloyd  V.  Keach,  2  Conn.  179;  Tuttle  v.  Clark,  4  Conn.  153;  King  v.  Johnson,  3 
McCord,  365;  Musgrove  v.  Gibbs,  1  Dall.  217;  Metcalf  v.  Pilcher,  6  B.  Mon.  529 ; 
Wycoff  u.  Longhead,  2  Dall.  92;  French  v.  Grindle,  15  Maine,  1G3;  Farmer  v.  Sewall, 
16  Maine,  456;  Lane  v.  Steward,  20  Maine,  98;  Hansbrough  v.  Baylor,  2  Munf.  36; 
Shackieford  v.  Morriss,  1  J.  J.  Marsh.  497 ;  Oldham  v.  Turner,  3  B.  Mon.  67 ;  Churchill 
?;.  Suter,  4  Mass.  162;  Ingalls  v.  Lee,  9  Barb.  647;  Nichols  v.  Fearson,  7  Pet.  107; 
Moncure  v.  Dermott,  13  Pet.  345  ;  Powell  v.  Waters,  8  Cow.  685;  Rice  v.  Mather,  3 
Wend.  65 ;  Cram  v.  Hendricks,  7  Wend.  569  ;  Eapelye  v.  Anderson,  4  Hill,  472 ; 
Holmes  v.  Williams,  10  Paige,  326  ;  Holford  v.  Blatchford,  2  Sandf.  Ch.  149. 

2  Saltmarsh  v.  Planters'  and  Merchants'  Bank,  17  Ala.  768;  Munn  u.  Commission 
Co.  15  Johns.  55. 

3  Whitworth  v.  Adams,  5  Rand.  333;  Law  v.  Sutherland,  5  Gratton,  357;  Shackle- 
ford  V.  Morriss,  1  J.  J.  Marshall,  497  :  Hansbrough  v.  Baylor,  2  Munf.  36  ;  Holmes  v. 
Williams,  10  Paige,  326. 


CH.  XIV.]  OF  INTEREST  AND  USURY.  267 

the  burden  of  proving  his  innocence,  or,  in  other  words,  his  belief 
that  he  was  only  a  purchaser. 

As  one  may  sell  the  notes  or  other  securities  which  he  holds 
as  property,  under  no  other  restriction  than  that  which  attends 
the  sale  of  merchandise,  so  we  think  that  a  man  may  sell  his 
credit.  The  cases  which  relate  to  this  question,  are  far  from 
harmonious.  In  the  dread  of  usury,  which  was  formerly  enter- 
tained, and  the  determination  —  so  strongly  expressed  by  Mans- 
field—  that  it  should  not,  by  any  device,  escape  the  law,  it  has 
undoubtedly  been  held  that  the  indorser  of  a  note  should  be  liable 
upon  it  only  for  what  he  received  with  lawful  interest.^  But,  al- 
though we  have  not  much  positive  authority  for  setting  this  rule 
aside,  we  are  quite  confident  that  a  better  understanding  of  the 
nature  of  negotiable  paper,  of  the  contract  of  indorsement,  and, 
perhaps,  of  the  rules  which  properly  belong  to  the  sale  and  pur- 
chase of  money,  would  lead  the  courts  to  a  different  conclusion. 

If  A  holds  the  note  of  B,  and  sells  it  to  C,  without  indorsing 
it,  he  can  certainly  sell  it  for  what  he  pleases ;  if  he  chooses  to 
add  his  indorsement,  he  will  do  so,  and  he  will  probably  do  this 
if  the  additional  value  which  he  thus  imparts  to  it,  exceeds  the 
risk  he  incurs.  If,  then,  he  indorses  the  note,  it  is  to  make  his 
merchandise  more  valuable ;  and  it  would  seem  to  be  little  less 
than  an  absurdity  to  say,  that  a  merchant  may  not  thus  give  a 
paper  he  holds  more  value,  or  that  he  may  give  the  paper  this 
value,  but  must  not  realize  this  value  by  the  sale.  If,  however, 
the  rule  is,  that,  when  called  upon  by  the  indorsee,  he  may  plead 
usury  as  between  them,  and  pay  either  nothing,  or  so  much  only 
as  he  received,  without  regard  to  the  amount  he  agreed  by  his 
indorsement  to  pay,  it  is  obvious  that  the  whole  effect  and  utility 
of  the  indorsement  would  be  very  rriuch  impaired.  We  think 
that  a  seller  with  indorsement  should  be,  and  that  he  now  gen- 
erally would  be,  held  as  liable  for  the  full  amount  of  the  note ; 
at  least  where  the  question  is  still  an  open  one. 

1  Lane  v.  Steward,  20  Maine,  98;  May  v.  Campbell,  7  Humph.  450;  French  v. 
Grindle,  15  Maine,  163;  Metcalf  v.  Pilcher,  6  B.  Mon.  530;  Cram  v.  Hendricks,  7 
Wend.  5G9;  Rapelye  v.  Anderson,  4  Hill,  472  ;  Ingalls  v.  Lee,  9  Barb.  647;  Brock  v. 
Thompson,  1  Bailey,  322 ;  Freeman  v.  Britticc,  2  Harrison,  191.  And  some  of  the 
cases  even  hold  that,  where  the  purchaser  of  the  paper  holds  the  person  to  whom  the 
money  is  advanced,  responsible  for  the  payment  of  the  debt,  this,  ;?er  se,  renders  the 
transaction  usurious.  M'Elwce  v.  Collins,  4  Dev.  &  B.  209;  Ballinger  v.  Edwards,  4 
Ire.  Eq.  449  ;  Cowe/i,  J.,  in  Rapelye  v.  Anderson,  4  Hill,  472. 


268  ELEMENTS    OF  MERCANTILE    LAW.  [CH.  XIV. 

We  should  apply  the  same  reasoning  to  the  case  of  one  who, 
having  no  interest  in  a  note,  indorses  or  guarantees  it  for  a  cer- 
tain premium  ;  thus,  not  adding  his  credit  to  the  value  of  his 
property  and  selling  both  together,  as  where  he  indorses  a  note 
which  he  holds  himself,  but  selling  his  credit  alone.  This  trans- 
action we  should  not  think  usurious.'  And  if  it  was  open  to  no 
other  defence,  as  fraud,  for  example,  and  was  in  fact  what  it 
purported  to  be,  and  not  a  mere  cover  for  a  usurious  loan,  we 
know  no  good  reason  why  such  indorser  or  guarantor  should  not 
be  held  liable  to  the  full  amount  of  his  promise. 


SECTION  V. 

OF   COMPOUND   INTEREST. 

Compound  interest  is  sometimes  said  to  be  usurious;  but  it  is 
not  so ;  and  even  those  cases  which  speak  of  it  as  "  savoring  of 
usury,"  may  be  thought  to  go  too  far,  unless  every  hard  bargain 
for  money  is  usurious.  As  the  authorities  now  stand,  however, 
a  contract  or  promise  to  pay  money  with  compound  interest, 
cannot,  generally,  be  enforced.^  On  the  other  hand,  it  is  neither 
wholly  void,  nor  attended  with  any  penalty,  as  it  would  be  if 
usurious ;  but  is  valid  for  the  principal  and  legal  interest  only,^ 

1  Thus,  where  A,  being  desirous  of  raising  money  upon  a  note,  drawn  by  himself, 
and  indorsed  for  his  accommodation  by  B  and  C,  authorized  a  broker  to  buy  an  addi- 
tional name  or  guaranty,  for  the  pui-pose  of  getting  the  note  discounted,  and  application 
was  accordingly  made  to  D,  who  thereupon  indorsed  the  note,  receiving  a  commission 
of  two  and  one  half  or  three  per  cent,  therefor ;  it  was  lield  that  the  taking  of  the  com- 
mission by  D,  did  not  render  the  transaction  usurious.  Ketchum  v.  Barber,  4  Hill,  224. 
See,  also.  More  v.  Howland,  4  Denio,  264 ;  Dry  Dock  Bank  v.  Am.  Life  Ins.  and 
Trust  Co.  3  Comst.  344;  Dunham  w.  Gould,  16  Johns.  367.  The  earlier  cases,  how- 
ever, seem  to  have  held  that  the  compensation  thus  received  must  not  exceed  the  law- 
ful rate  of  interest  for  the  time  the  paper  has  to  run.  Bullock  v.  Boyd,  Hoff.  Ch.  294; 
Dey  V.  Dunham,  2  Johns.  Ch,  182;  Fanning  v.  Dunham,  5  Johns.  Ch.  122;  Moore  v. 
Vance,  3  Dana,  361. 

2  As  early  as  the  case  of  Davis  v.  Higford,  1  Ch.  Rep.  28,  the  court  laid  down  the 
rule  that  interest  upon  interest  could  not  be  allowed.  And  in  Waring  v.  Cunliffe,  1 
Ves.  Jr.  99,  Lord  Thurloio  said  that  he  had  found  the  court  in  the  constant  habit  of 
thinking  compound  interest  not  allowable,  and  that  he  must  overturn  all  the  proceed- 
ings of  the  court  if  he  gave  it.  And  see,  to  the  same  effect,  Connecticut  v.  Jackson,  1 
Johns.  Ch.  13  ;  Lord  Ossulston  v.  Lord  Yarmouth,  2  Salk.  449  ;  Mowry  v.  Bishop,  5 
Paige,  98;  Hastings  ?;.  Wiswall,  8  Mass.  455;  Ferry  v.  Ferry,  2  Cush.  92;  Doe  v.  War- 
ren, 7  Greenl.  48  ;  Eodes  v.  Blythe,  2  B.  Mon.  336  ;  Childers  v.  Deane,  4  Rand.  406  ; 
contra,  Pawling  v.  Pawling,  4  Yeates,  220.  But  in  the  following  cases  it  was  held  that 
an  express  contract  to  pay  interest  upon  interest,  is  valid  and  enforceable.  Peirce  v. 
Rowe,  1  N.  H.  179  ;  Doig  v.  Barkley,  3  Rich.  125  ;  Kennon  v.  Dickens,  1  Taylor,  231; 
Gibbs  V.  Chisolm,  2  Nott  &  McCord,  38  ;  Singleton  v.  Lewis,  2  Hill,  (S.  C.)  408. 

**  Kellogg  V.  Hickok,  1  Wend.  521 ;  Otis  v.  Lindsey,  1  Fairf.  316;  Wilcox  v.  How- 
land,  23  Pick.  169. 


CII.  XIV.]  OF   INTEREST   AND    USURY.  269 

Nevertheless,  compound  interest  is  sometimes  recognized  as 
due  by  courts  of  law,  as  well  as  of  equity ;  and  sometimes,  too, 
by  its  own  name.  Thus,  if  a  trustee  be  proved  to  have  had  the 
money  of  his  cestui  que  trust  for  a  long  time,  without  accounting 
for  it,  he  may  be  charged  with  the  whole  amount,  reckoned  at 
compound  interest,  so  as  to  cover  his  unlawful  profits.^  If  com- 
pound interest  has  accrued  under  a  bargain  for  it,  and  been 
actually  paid,  it  cannot  be  recovered  back,  as  money  usuriously 
paid  may  be.^  And  if  accounts  are  agreed  to  be  settled  by  an- 
imal rests,  which  is  in  fact  compound  interest,  or  are  actually 
settled  so  in  good  faith,  the  law  sanctions  this.^  Sometimes,  in 
cases  of  disputed  accounts,  the  courts  direct  this  method  of 
settlement. 

Where  money  due  on  interest,  has  been  paid  by  sundry  instal- 
ments, the  mode  of  adjusting  the  amount,  which  has  the  best 
authority  and  the  prevailing  usage  in  its  favor,  seems  to  be  this: 
Compute  the  interest  due  on  the  principal  sum  to  the  time  when 
a  payment,  either  alone  or  in  conjunction  with  preceding  pay- 
ments with  interest  cast  on  them,  shall  equal  or  exceed  the  in- 
terest due  on  the  principal.  Deduct  this  sum,  and  upon  the 
balance  cast  interest  as  before,  until  a  payment  or  payments 
equal  the  interest  due;  then  deduct  again,  and  so  on.* 

1  Thus,  where  a  trustee,  under  a  marriage  settlement,  allowed  the  sum  of  £350  to 
remain  in  the  hands  of  a  trading  firm  for  a  period  exceeding  fifteen  years  after  the 
death  of  the  tenant  for  life,  he  was  held  to  account  for  the  principal  sum,  with  com- 
pound interest.  Jones  i'.  Foxall,  13  Eng.  Law  and  Eq.  140.  And  see  Evertson  v. 
Tappen,  5  Johns.  Ch.  497;  Shieflfelin  v.  Stewart,  1  Johns.  Ch.  620.  And  see  1  Parsons 
on  Contracts,  103,  (b.) 

2  Mowry  v.  Bishop,  5  Paige,  98 ;  Dow  v.  Drew,  3  N.  H.  40. 

^  Stoughton  u.  Lynch,  2  Johns.  Ch.  210;  Bruce  v.  Hunter,  3  Camp.  467;  Ossulston 
V.  Yarmouth,  2  Salk.  449 ;  Childers  v.  Deane,  4  Rand.  406  ;  Tarleton  v.  Backhouse, 
Cooper's  Ch.  231 ;  Fobes  v.  Cantfield,  3  Ham.  18.  But  this  is  only  allowed  under  a 
specific  agreement,  and  after  the  mutual  dealings  of  the  parties  have  ceased.  Von 
Hemert  v.  Porter,  11  Mete.  210;  Denniston  v.  Imbrie,  3  Wash.  C.  C.  396. 

*  See  Connecticut  v.  Jackson,  1  Johns.  Ch.  13;  Story  v.  Livingston,  13  Pet.  371; 
Jones  V.  Ward,  10  Yerger,  170 ;  Smith  v.  Shaw,  2  Wash.  C.  C.  167. 


23' 


ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 


CHAPTER  XV. 
OF   BANKRUPTCY   AND   INSOLVENCY. 

SECTION  I, 

OF   THE    HISTORY   OF    THE    LAW    OF  BANKRUPTCY. 

Centuries  ago,  dealers  in  money,  or  "exchangers,"  as  they 
were  called  in  England,  sat  behind  a  bench,  on  which  lay  heaps 
of  the  coin  they  bought  or  sold ;  and  some  remains  of  this  prac- 
tice may  now  be  seen  in  various  parts  of  the  old  continent. 
This  bench,  or  "  banco,"  in  the  Italian  language,  gave  its  name 
to  the  moneyed  institutions  of  deposit,  or  of  currency,  of  which 
the  earliest  of  great  importance,  if  not  the  first  in  time,  was  the 
"  Bank  "  of  Venice.  W^hen  such  a  trader  became  insolvent,  or 
unable  to  meet  his  engagements,  those  who  had  charge  of  such 
things,  whether  as  a  police  or  as  an  association  or  guild  of  such 
dealers,  broke  his  bench  to  pieces,  as  a  symbol  that  he  could 
carry  on  that  business  no  longer.  In  Italian,  the  words  "  banco 
rotto  "  mean  a  broken  bench  ;  and  from  this  phrase  grew  the  word 
"  bankrupt."  There  are  some  however  who  deny  any  such  prac- 
tice as  that  of  actually  breaking  a  bench,  but  consider  the  phrase 
as  merely  figurative  of  insolvency. 

In  this  we  see  nothing  of  alleged  criminality,  or  of  punish- 
ment. But  the  laws  of  England  went  to  an  earlier  source  than 
the  Italian  commerce  of  the  middle  ages,  and  found  in  the 
Roman  law,  the  principle  which  governed,  and  perhaps  still  gov- 
erns, their  system  of  bankrupt  laws.  This  principle  is,  that  the 
bankrupt  may  be  presumed  to  be  dishonest  and  criminal,  and 
treated  accordingly. 

By  the  English  common  law,  the  body  of  a  freeman  could  not 
be  arrested  for  debt,  whether  he  was  a  trader  or  not.  And  the 
earliest  processes  of  that  law  included  none  for  imprisonment 
for  debt.     This  was  of  later  origin.     In  the  reign  of  Edward  I. 


Cn.*XV.]  OP   BANKRUPTCY   AND    INSOLVENCY.  271 

a  law  was  passed  authorizing  an  arrest  of  a  defendant  in  certain 
cases,  for  the  purpose  of  more  effectually  securing  the  perform- 
ance of  commercial  contracts.  This  was  extended  in  its  opera- 
tion by  a  law  of  Edward  III.  and  sundry  statutes  followed, 
applying  further  regulations  to  this  subject,  until  late  in  the  reign 
of  Henry  VIII.,  (1544,)  a  statute  was  passed  so  nearly  resembling 
a  modern  statute  of  bankruptcy,  that  it  is  generally  considered  the 
first  bankrupt  law.  In  a  statute  of  the  13  Elizabeth,  the  opera- 
tion of  the  law  was  confined  to  traders ;  or,  in  the  words  of  the 
law,  "  to  such  persons  as  had  used  the  trade  of  merchandise  in 
gross  or  in  retail."  And  thus  an  important  principle  was  intro- 
duced which  has  since  been  constantly  adhered  to,  although 
somewhat  liberally  construed. 

In  those,  and  in  still  earlier  days,  there  was  perhaps  more 
reason  for  regarding  a  mercantile  bankrupt  as  a  criminal  than 
there  is  now.  Even  at  present,  many  insolvencies  are  undoubt- 
edly fraudulent,  and  the  innocent  bankrupt  generally,  if  not 
always,  owes  his  failure  to  guilty  intent  or  guilty  imprudence 
in  some  quarter.  But  it  is  also  certain  that  in  the  vast 
complications  of  the  commercial  world,  all  who  engage  in  busi- 
ness are  subject  to  casualties  which  imply  no  crime,  and  which 
no  sagacity  could  avert.  If  the  Roman  law  —  that  the  merchant 
who  failed  in  business  should  be  expelled  from  the  college  (or 
guild)  of  merchants  and  never  suffered  to  trade  again,  —  if  that 
law  prevailed  here,  many  of  our  most  eminent  and  useful 
merchants  would  have  lost  the  opportunity  of  retrieving  their 
affairs  by  ultimate  success,  and  paying  off,  by  the  fruits  of  a 
later  industry,  the  debts  of  an  earlier  insolvency. 

The  community  are  now  sensible  of  this.  And  to  this  con- 
nection we  owe  the  gradual,  but  of  late  years,  rapid,  change  in 
the  spirit  of  our  laws  for  the  collection  of  debt.  Now  the  en- 
deavor is  carefully  to  discriminate  between  an  innocent  and  a 
wrongful  insolvency ;  and  to  treat  the  latter  only  as  criminal. 
That  our  laws  do  not  yet  effect  this  purpose  perfectly,  and  without 
any  injurious  result,  may  be  true ;  but  the  purpose  and  the  prin- 
ciple are  certainly  right. 

The  Constitution  of  the  United  States  authorizes  congress  to 
pass  a  bankrupt  law.  But  not  until  eleven  years  after  the  adop- 
tion  of   the  constitution,  was  a  bankrupt  law  passed  in   1800, 


272  ELEMENTS    OF   MERCANTILE   LAW.  [ciI.  ^V. 

which,  by  its  own  terms,  was  limited  to  five  years,  but  was  in 
fact  repealed  after  it  had  been  in  operation  two  years  and  eight 
months.  Sundry  attempts  were  made  from  time  to  time  for  a 
new  one  ;  and  whenever  the  vicissitudes  of  trade  pressed  more 
heavily  than  usual  on  the  community,  these  efforts  were  more 
urgent.  And  to  the  general  dulness  in  the  country,  or  rather  the 
wide  prevalance  of  actual  insolvency,  was  due  the  law  which 
was  passed  in  1841,  after  an  earnest  but  unsuccessful  endeavor 
in  the  year  previous. 

If  the  amount  or  number  of  applications  for  the  law  is  a  true 
measure  of  its  need  or  its  utility,  this  law  was  not  passed  too 
soon.  In  Massachusetts,  for  example,  there  were  3,389  applicants 
for  relief,  and  the  creditors  numbered  99,619,  more  than  a  third 
of  the  adult  male  population  of  the  State,  and  the  amount  of 
their  claims  exceeded  thirty  millions  of  dollars,  averaging  about 
three  hundred  and  fifty  dollars  to  a  creditor. 

This  law  was  repealed  March  3,  1843,  one  year  six  months 
and  fourteen  days  after  it  was  enacted ;  and  in  this  short  period 
it  affected  more  property,  and  gave  rise  to  more  numerous  and 
more  difficult  questions,  than  any  other  law  has  ever  done,  in  the 
same  period.  It  was  repealed  because  it  had  done  its  work. 
The  people  demanded  it  that  it  might  settle  claims  and  remove 
incumbrances  and  liens  and  sweep  away  an  indebtedness  that 
lay  as  an  intolerable  burden  on  the  community.  "When  it  had 
done  this,  it  began,  or  was  thought  to  have  begun,  to  favor  the 
payment  of  debt  by  insolvency  too  much,  and  the  people  de- 
manded its  repeal. 

We  have  no  national  bankrupt  law  now.  We  shall  probably 
never  have  one  until  another  similar  national  emergency  shall 
arise ;  and  perhaps  not  then,  because  the  state  insolvent  laws 
are  now  so  well  constructed  and  systematized,  that  they  effect, 
though  not  quite  so  well,  nearly  all  the  purposes  of  a  national  law. 

But  these  state  laws  are  entirely  independent  of  each  other ; 
and  their  provisions  are  so  different,  that  it  is  difficult,  or  indeed 
impossible,  to  present  a  view  of  the  bankrupt  law  of  the  United 
States,  which  can  have  the  unity  and  system  of  such  a  view  of 
the  laws  of  any  one  nation,  as  of  England  for  example.  But 
there  is  enough  of  system  and  of  similarity,  and  enough  of 
principle  running  through   the  whole,  to   make  it  expedient  to 


CH.*XV.]                      OF   BANKRUPTCY   AND   INSOLVENCY.  273 

endeavor  to  present  a  general  view   of  the  generally  admitted 

principles,  leaving  local  details  and  peculiarities,  for  the  most 
part,  to  be  learned  elsewhere. 


SECTION  11. 

OF   THE   DIFFERENCE   BETWEEN   BANKRUPTCY  AND   INSOLVENCY. 

This  difference  was  not  perhaps  perfectly  clear  in  its  beginning, 
and  has  gradually  grown  dim  with  time,  until  now,  in  this  coun- 
try at  least,  it  has  become  almost  obliterated.  But  from  it  arose, 
and  upon  it,  in  some  measure,  depends,  our  present  American 
law  of 'insolvency. 

The  earliest  difference  between  these  was  perhaps,  that  insol- 
vent laws  applied  not  only  to  t^-aders,  but  to  all  who  were 
indebted  and  unable  to  pay  their  debts.  The  more  prominent  dis- 
tinction, however,  was  this,  that  the  process  under  the  bankrupt 
law  was  in  invitum  against  the  bankrupt,  by  his  creditors,  in  order 
to  obtain  a  sequestration  of  his  effects,  and  prevent  a  further  waste, 
or  fraudulent  or  unequal  misapplication  t)f  them,  and  secure 
the  payment  of  their  debts  as  far  as  these  effects  would  go.  But 
the  insolvent  laws  were  intended  for  the  relief  of  debtors  who 
sought  to  be  protected  by  the  delivery  of  all  their  property,  from 
further  molestation.  This  distinction  is  now  so  far  lost  sight  of, 
that  the  last  national  bankrupt  law,  and  most  of  the  state  insol- 
vent laws,  provide  separately  for  a  process  in  invitum,  and  also 
for  one  on  the  application  and  request  of  the  insolvent.  It  has 
also  been  supposed  that  another  ground  of  distinction  lay  in  the 
fact  that  the  bankrupt  law  discharged  the  debt,  while  the  insol- 
vent law  left  the  debt  in  full  force,  but  protected  the  debtor  him- 
self from  arrest  or  imprisonment.  But  this  distinction  has  rflso 
faded  away. 

For  a  long  time,  in  England,  these  two  systems  of  law  — 
Bankruptcy  Statutes  and  Insolvency  Statutes  —  ran  along  to- 
gether, those  of  Insolvency  being  the  more  numerous,  but  the 
two  subjects  were  kept  quite  apart.  At  length,  they  began  to 
assimilate,  and  in  the  recent  legislation,  especially  by  the  7  &  8 
Vict.  c.  96,  they  have  continued  to  approach  nearer  and  nearer 


274  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

together,  until  there  is  now  scarcely  any  discrimination  between 
them.' 

In  this  country,  there  has  not  been  any  very  clear  distinction 
between  them,  at  any  time;  but  one  consequence  from  the  nom- 
inal distinction  was  important.  These  colonies,  from  the  earliest 
times,  enacted  insolvent  laws,  but  not  bankrupt  laws.  And 
when  the  Constitution  of  the  United  States  gave  to  congress  the 
power  to  pass  a  bankrupt  law,  it  seems  to  have  been  thought 
that  this  in  no  wise  affected  the  rights  which  the  States  contin- 
ued to  possess,  of  enacting  what  insolvent  laws  .they  chose  to. 
This  right  they  have  continued  to  exercise  to  the  present  day; 
and  always  under  the  name  of  insolvent  laws.  But,  so  far  as 
we  may  affirm  with  much  positiveness  any  conclusions  on  this 
obscure  subject,  we  may  say  that  the  distinction  between  insol- 
vent laws  and  bankrupt  laws  is  now,  in  this  respect  at  least, 
nothing,  and  that  a  State  can  pass  no  law  by  calling  it  an  insol- 
vent law,  which  it  could  not  pass  under  the  name  of  a  bankrupt 
law ;  and  that  the  power  given  to  congress,  to  pass  a  bankrupt 
law,  does  not  take  it  away  from  the  States,  who  may  pass  what 
bankrupt  laws  they  will  for  their  own  citizens,  whenever  there  is 
no  general  bankrupt  law  enacted   by  congress.^     And  even  if 

1 1  Spence's  Equitable  Jurisdiction  of  the  Court  of  Chancery,  202  ;  Stat.  5  &  6  Vict. 
c.  70. 

-  13  Mass.  1,  Bradford  v.  Russell.  The  doctrine  of  the  text  is  admirably  stated  by 
Marshall,  C.  J.,  in  the  leading  case  of  Sturges  i'.  Crowninshield,  4  Wheat.  191.  "  The 
subject  is  divisible  in  its  nature  into  bankrupt  and  insolvent  laws  ;  though  the  line  of 
partrtion  between  them  is  not  so  distinctly  marked  as  to  enable  any  person  to  say,  with 
positive  precision,  what  belongs  exclusively  to  the  one,  and  not  to  the  other  class  of 
laws.  But  if  an  act  of  congress  should  discharge  the  person  of  the  bankrupt,  and 
leave  his  future  acquisitions  liable  to  his  creditors,  we  should  feel  much  hesitation  in 
saying  tliat  this  was  an  insolvent,  not  a  bankrupt  act ;  and,  therefore,  unconstitutional. 
Another  distinction  has  been  stated,  and  has  been  uniformly  observed.  Insolvent  laws 
operate  at  the  instance  of  an  imprisoned  debtor ;  bankrupt  laws  at  tlie  instance  of  a 
creditor.  But  should  an  act  of  congress  authorize  a  co«imission  of  bankruptcy  to 
issue  on  the  application  of  a  debtor,  a  court  would  scarcely  be  warranted  in  saying 

that  tlie  law  was  unconstitutional,  and  the  commission  a  nullity." "  This 

diffifulty  of  discriminating  with  any  accuracy  between  insolvent  and  bankrupt  laws, 
would  lead  to  the  opinion,  that  a  bankrupt  law  may  contain  those  regulations  which 
are  generally  found  in  insolvent  laws;  and  that  an  insolvent  law  may  contain  those 
which  are  common  to  a  bankrupt  law.  If  this  be  correct,  it  is  obvious  that  much 
inconvenience  would  result  from  that  construction  of  the  constitution,  which  should 
deny  to  the  state  legislatures  the  power  of  acting  on  tiiis  subject,  in  consequence  of  a 
grant  to  congress.  It  may  be  tliought  more  convenient  that  much  of  it  should  be 
regulated  by  state  legislation,  and  congress  may  purposely  omit  to  provide  for  many 
cases  to  which  their  power  extends.  It  does  not  appear  to  be  a  violent  construction  of 
the  constitution,  and  is  certainly  a  convenient  one,  to  consider  the  power  of  the  States 
as  existing  over  such  cases  as  the  laws  of  the  Union  may  not  reach.  But  be  this  as  it 
may,  the  power  granted  to  congress  may  be  exercised  or  declined,  as  the  wisdom  of 
that  body  shall  decide.     If,  in  the  opinion  of  congress,  uniform  laws  concerning  bank- 


CH.  XV.]  OF  BANKRUPTCY   AND   INSOLVENCY.  275 

there  be  such  a  law,  any  State  may,  perhaps,  pass  any  bankrupt 
law  which  in  no  way  interferes  with  or  contravenes  the  statute  of 
the  United  States.  This  last  remark,  even  if  admitted  to  be  true, 
cannot  have  much  practical  value,  for  it  can  hardly  be  supposed 
that  congress  will  pass  any  general  bankrupt  law  which  would 
be  so  inadequate  or  incomplete  that  a  State  could  pass  an  insol- 
vent law  of  any  importance,  which  should  not  interfere  with  it. 
Where  cases  had  been  begun  under  the  state  insolvency  laws, 
before  the  bankrupt  law  went  into  force,  it  was  decided  that  they 
might  go  on  to  maturity,  and  were  not  superseded  by  this 
national  law.' 

At  present,  we  have  no  general  bankrupt  law,  but  a  great 
variety  of  state  insolvent  laws.  Of  their  special  provisions,  we 
do  not  propose  to  speak;  but  shall  confine  our  remarks,  princi- 
pally at  least,  to  those  general  principles  which  may  be  supposed 
common  to  them  all,  where  not  specifically  excluded.  And  of 
these,  what  may  be  called  the  fundamental  principle,  is  an  equal 
division  of  the  assets  of  an  insolvent  among  his  creditors. 

At  common  law,  any  person,  whether  a  trader  or  otherwise, 
may  pay  any  debt  at  his  own  pleasure,  whether  he  be  insolvent 

ruptcies  ought  not  to  be  established,  it  does  not  follow  that  partial  laws  may  not  exist, 
or  that  state  legislation  on  the  subjeet  must  cease.  It  is  not  the  mere  existence  of  the 
power,  but  its  exercise,  which  is  incompatible  with  the  exercise  of  the  same  power  by 
the  States.  It  is  not  the  right  to  establish  these  uniform  laws,  but  their  actual  estab- 
ment,  wliich  is  inconsistent  with  the  partial  acts  of  the  States.  It  has  been  said,  that 
congress  has  exercised  this  power ;  and,  by  doing  so,  has  extinguished  the  power  of 
the  States,  which  cannot  be  revived  by  repealing  the  law  of  congress.  We  do  not 
think  so.  If  the  right  of  the  States  to  pass  a  bankrupt  law  is  not  taken  away  by  the 
mere  grant  of  that  power  to  congress,  it  cannot  be  extinguished  ;  it  can  only  be  sus- 
pended by  the  enactment  of  a  general  bankrupt  law.  The  repeal  of  that  law  cannot, 
it  is  true,  confer  the  power  on  the  States  ;  but  it  removes  a  disability  to  its  exercise, 
which  was  created  by  the  act  of  congress."  And  see  Story  on  the  Constitution,  11  ; 
Ogden  V.  Saunders,  12  Wheat.  213  ;  2  Kent,  394,  and  note. " 

1  Ex  parte  Eames,  2  Story,  322,  and  5  Law  Rep.  325,  S.  C;  5  Law  Rep.  360.  Judd 
I'.  Ives,  4  Met.  401.  In  this  case,  the  rule  was  stated  with  the  limitation  only  that  the 
bankrupt  law  did  not  suspend  the  operation  of  the  insolvent  law  in  cases  where  the 
proceedings  under  the  state  law  had  been  commenced  previously  to  the  existence  and 
operation  of  the  bankrupt  law.  And  the  same  limitation  is  sustained  in  the  cases  above 
cited,  and  in  Griswoldr.  Pratt,  9  Met.  16.  Bui  in  Ziegenfuss'  case,  2  Ired.  463,  it  was 
held,  in  the  opinion  delivered  by  Mr.  Justice  Battle,  and  concurred  in  by  the  full  bench 
of  the  Supreme  Court  of  North  Carolina,  that  a  state  insolvent  law  may  exist  and 
operate  with  full  vigor  until  the  bankrupt  law  attaches  itself  upon  the  person  or  prop- 
erty of  the  debtor  by  proceedings  instituted  in  bankruptcy ;  and  it  was  further  held 
that  no  case  of  conflict  could  arise  until  after  the  proceedings  in  bankruptcy  had 
reached  that  stage  in  wiiich  the  debtor  had  been  judicially  declared  a  bankrupt.  The 
doctrine  of  the  court  is  maintained  with  great  abilitj',  and  the  objections  to  it  arc  met 
and  answered.  Yet  it  has  not  met  with  subsequent  favor,  and  it  is  certainly  opposed  to 
the  contemporaneous  authorities,  and  is  the  only  case  we  have  met  with  where  the  view 
is  adopted.  See,  as  sustaining  the  doctrine  of  the  cases  above  cited,  a  case  in  the 
District  Court  of  New  York,  reported  1  New  York  Legal  Observer,  211. 


276  ELEMENTS   OP   MERCANTILE   LAW.  [CH.  XV. 

or  not;  and  if  such  payment  exhaust  his  means,  so  that  he  can 
pay  no  other  creditor,  the  common  law  makes  no  objection.  In 
other  words,  it,  permits  a  preference  among  creditors,  to  any  ex- 
tent and  in  any  form.  Nor  does  the  statute  of  fraudulent  con- 
veyance affect  this  question,  because,  although  no  debtor  may 
"  hinder,  delay,  or  defraud  a  creditor,"  it  is  not  considered  that 
he  does  this  by  paying  one  more  than  another,  or  paying  to  some 
of  his  creditors  all  their  debts,  and  to  others  nothing,  provided  his 
reason  for  paying  them  nothing  is,  that  he  had  nothing  left  for 
them. 

At  this  right  of  preference,  the  bankrupt  system  was  directly 
aimed.  Since  the  reign  of  Elizabeth,  it  has  been  restrained  and 
almost  suppressed  in  England.  But  in  this  country,  where,  as 
has  been  said,  the  English  bankruptcy  system  was  never  intro- 
duced, and  this  whole  matter  was  regulated  by  common  law,  a 
system  of  voluntary  assignment,  with  preferences  of  all  kinds, 
prevailed  extensively.  The  frauds  and  mischiefs  resulting  from 
this,  gradually  produced  a  conviction  that  both  expediency  and 
justice  imperatively  demanded  an  equal  distribution  of  the  assets 
of  an  insolvent  among  all  his  creditors.  In  Maine,  New  Hamp- 
shire, Massachusetts,  Connecticut,  New  Jersey,  Delaware,  Penn- 
sylvania, Ohio,  Missouri,  Georgia,  and  Louisiana,  special  assign- 
ments, with    preferences,  are  no   longer    permitted.^      In    other 

1  Buffum  V.  Green,  5  N.  H.  79.  Richardson,  C.  J. :  "  It  is  very  clear  that  an  insol- 
vent debtor  may  give  a  preference  to  one  creditor  by  paying  his  debt  in  full,  to  the  ex- 
clusion of  all  the  rest  of  the  creditors,  provided  it  be  done  in  good  faith."  Stevens  v. 
Bell,  6  Mass.  342.  Parsons,  C.  J. :  "At  common  law,  every  man  might  prefer  any 
creditor,  and  might  pledge  his  property  and  convey  it  in  trust,  so  that  no  fraud  resulted 
to  others ;  and  if  he  stripped  himself  of  all  his  property  in  favor  of  any  one  creditor, 
leaving  himself  quite  destitute,  no  other  creditor  had  legal  cause  of  complaint,  if  the 
transaction  was  honest  and  for  a  valuable  consideration.  This  right  in  a  debtor  is 
founded  on  the  acknowledged  principle  that  he  may  prefer  or  secure  any  one  creditor, 
in  a  way  that  is  not  a  fraud  on  another."  And  to  the  same  point,  Tompkins  v.  Wheeler, 
16  Pet.  106;  Twy'ne's  case,  3  Co.  80;  Marbury  v.  Brooks,  7  Wheat.  556;  Estwick  r. 
Caillaud,  5  T.  H.  420;  Brooks  v.  Marbury,  11  Wheat.  78;  Cadogan  v.  Kennet,  Cowp. 
432 ;  Hull  v.  Jeffrey,  8  Ham.  (Ohio  R.)  390 ;  M'Cullough  v.  Sommerville,  8  Leigh,  415  ; 
Ex'or  of  Skipwith  v.  Cunningham,  8  id.  271;  Hickley  i;.  Farmers'  and  Merchants' 
Bank,  5  Gill  &  J.  377;  Crawfords  v.  Taylor,  6  id.  323;  McMenomy  v.  Roosevelt,  3 
Johns.  Ch.  446;  Bell  v.  Thompson,  3  Mis.  84  ;  Pearson  v.  Rockhill,  4  Ben.  Mon.  296. 
In  New  York,  it  seemed,  for  some  time,  to  be  doubted  whether  the  right  of  preference 
of  creditors  was  maintainable  at  the  common  law,  and  the  expediency  of  allowing  it 
was  greatly  doubted.  In  Riggs  v.  Murray,  2  Johns.  Ch.  577,  it  is  said,  by  Chancellor 
Kent:  "As  we  have  no  bankrupt  system,  the  right  of  the  insolvent  to  select  one  credi- 
tor and  to  exclude  another,  is  applied  to  every  case,  and  the  consequences  of  such 
partial  payments  are  extensively  felt,  and  deeply  deplored.  Creditors  out  of  view,  and 
who  reside  abroad  or  at  a  distance,  are  usually  neglected.  This  checks  confidence  in 
dealing,  and  hurts  tlie  credit  and  character  of  the  country.  These  partial  assignments 
are,  no  doubt,  founded,  in  certain  cases,  upon  meritorious  considerations,  yet,  the  temp- 


en.  XV.]  Of  bankruptcy  and  insolvency.  277 

States,  jaarticularly  in  New  York,  there  seems  to  be  a  growing 
disposition  to  encourage  an  equal  division,  by  providing  not  only, 
as  is  now  generally  done,  that  the  insolvent  shall  be  discharged 
only  when  his  effects  are  equally  divided,  but  that  all  preferences 
shall  be  void.  This  system  is  found  to  operate  so  well  wherever 
it  is  tried,  we  cannot  doubt  that  it  will  be,  at  no  distant  day,  uni- 
versal.    We  are  not  aware  that  any  State  which  has  suppressed 


tation  leads  strongly  to  abuse,  and  to  tlie  indulgence  of  improper  motives.  'The  Master 
of  tbe  Rolls,  in  Small  v.  Dudley,  2  T.  Wms.  427,  and  the  Lord  Chancellor,  in  Cock  v. 
Goodfellow,  10  Mod.  489,  admit  that  such  preferences,  by  a  sinking  debtor,  may,  and 
in  certain  cases  ought  to  be  given,  and  are  called  for  by  gratitude  and  benevolence ; 
yet,  at  the  same  time  it  is  acknowledged  that  the  power  may  be  abused,  and  be  rendered 
subservient  to  fraud.  Experience  shows  that  preference  is  sometimes  given  to  the  very 
creditor  wiio  is  the  least  entitled  to  it,  because  he  lent  to  the  debtor  a  delusive  credit, 
and  that,  too,  no  doubt,  under  assurances  or  a  well-grounded  confidence  of  priority  of 
payment,  and  perfect  indemnity,  in  case  of  failure,  liow  often  has  it  happened  that  the 
creditor  is  secured  who  was  the  means  of  decoying  others,  while  the  real  business  cred- 
itor, who  parted  with  his  property  on  liberal  terms,  and  in  manly  confidence,  is  made 
the  victim.  Perhaps  some  influential  creditor  is  placed  upon  the  privileged  list,  to  pre- 
vent disturbance,  while  those  who  are  poor,  or  are  minors,  or  are  absent,  or  want  the 
means  or  the  spirit  to  engage  in  litigation,  are  abandoned.''  Whether  an  assignment 
for  the  benefit  of  such  creditors,  as  should  sign  a  release  to  all  claims  against  the  debtor, 
was  good  at  common  law,  has  been  the  subject  of  much  judicial  controversy^  In  Riggs 
V.  Murray,  2  Johns.  Ch.  565,  it  was  held  that  a  reservation  of  a  similar  nature  rendered 
the  assignment  fraudulent  and  void.  In  this  case,  the  assignment  was  of  all  the  prop- 
erty of  the  debtor  in  trust,  to  pay  the  trustees  and  such  other  creditors  as  the  debtor  in 
one  year,  by  deed,  might  direct  and  appoint,  &c.,  reserving  a  power  to  appoint  new 
trustees,  and  to  revoke,  alter,  add  to,  or  vary  the  trusts,  at  his  pleasure,  is  void.  This 
judgment  was  reversed  in  error,  15  Johns.  571  ;  and  the  cases  are  reviewed  at  length 
by  Mr.  Chief  Justice  Thompson.  But  in  Grover  w.  Wakeman,  11  Wend.  187,  the 
doctrine  of  15  Johns.  571,  was  denied;  and  it  was  held  that  a  provision  making  the 
preference  depend  upon  the  execution  by  the  preferred  creditors  of  a  release  to  the 
debtor  of  all  claims  against  him,  is  void.  And  the  doctrine  is  laid  down,  which  seems 
to  be  the  law  at  this  day  when  preferences  arc  allowed,  that  an  assignment,  to  be  valid, 
must  be  absolute  and  unconditional,  and  must  contain  no  reservation  or  condition  for 
the  benefit  of  the  debtor,  and. that  it  must  not  extort  from  the  fears  or  apprehensions  of 
the  creditors  an  absolute  discharge  as  a  consideration  for  a  partial  dividend.  An  as- 
signment containing  a  stipulation  for  a  release,  was  sustained  in  Lippincott  v.  Barker, 
2  Binn.  174,  and  by  AVashington,  J.,  in  Pearpoint  v.  Graham,  4  Wash.  C.  C.  Rep.  232. 
In  Ingraham  v.  Wheeler,  6  Conn.  277,  such  a  provision  was  held  to  invalidate  an  as- 
signment. And  the  same  point  was  decided  in  Atkinson  v.  Jordan,  5  Hammond,  293. 
In  Halsey  v.  Whitman,  4  Mason,  230,  Storij,  J.,  though  admitting  the  weight  of  author- 
ity to  be,  on  the  whole,  in  favor  of  the  validity  of  such  a  clause  in  an  assignment, 
declared  that,  if  the  question  were  entirely  new,  and  many  estates  had  not  passed  on 
the  strength  of  such  assignments,  the  strong  inclination  of  his  mind  would  be  against 
their  validity.  The  authorities  are  reviewed  in  the  learned  opinion  of  Ware,  J.,  in  the 
District  Court  of  Maine,  in  Lord  v.  Brig  Watchman,  and  the  validity  of  an  assignment 
with  a  clause  providing  for  a  release,  is  denied.  8  Am  Jiir.  284.  The  same  doctrine 
is  maintained  in  Eamsdell  v.  Sigerson,  2  Gilman,  78 ;  Sheppards  v.  Turpin,  3  Gratt. 
372;  Stevenson  v.  Agry,  7  Hammond,  pt.  2,  247.  xVnd  in  those  States  where  an  in- 
solvent law  is  in  force,  and  assignments  with  preferences  are  not  forbidden,  such  assign- 
ments must  conform  to  the  provisions  of  the  Insolvent  Act.  and  a  conflict  vitiates  the 
assignment.  Rcpplier  v.  Orrich,  7  Hammond,  pt.  2,  246  ;  Hickley  v.  Farmers'  and  Mer- 
chants' Bank,  5  Gill  &  J.  377;  Harsliman  v.  Lowe,  9  Hammond,  92.  But  in  later 
decisions,  and  previous  to  the  enactment  of  the  provisions  mentioned  in  the  text,  the 
right  was  fullv  vindicated.  See  Murray  v.  Riggs,  15  Johns.  571 ;  Grover  v.  Wakeman, 
11  Wend.  187'. 

24 


278  ELEMENTS    OF    MERCANTILE    LAAV.*  [CIL  XV. 

special    assignments   with    preferences,    has    ever    returned    to 
them.' 


SECTION    III. 

OF    THE    TRIBUNAL   AND   JURISDICTION. 

The  bankrupt  law  of  the  United  States  gave  the  jurisdiction 
of  all  cases  to  the  District  Court;  and  the  reasojis  for  this  are  so 
obvious,  that  it  would  undoubtedly  be  so  provided  in  every  future 
law.  The  state  insolvent  laws,  for  the  most  part,  provide  com- 
missioners of  insolvency,  and  among  these  the  judges  of  probate 
are  sometimes  placed  ex  officio;  but  there  is  no  uniformity  on 
this  point.  There  is,  certainly  in  general,  and  we  think  always, 
a  supervisor  power  in  the  Supreme  Court,  or  in  the  Court  of 
Chancery. 

If  a  creditor's  claim  be  doubted,  the  assignees  may  have  the 
question  decided  by  a  jury ;  and  so  may  the  creditor,  if  his  claim 
be  disallowed ;  by  the  provisions  of  many  States.^ 

As  to  the  manner  of  initiating  the  proceedings  in  bankruptcy, 
the  national  law  contained  some  provisions,  copied  substantially 
from  the  English  laws ;  and  in  the  short  time  during  which  the 
law  was  in  force,  various  rules  were  made  by  the  courts,  or  re- 
sulted from  adjudication.  At  present,  each  board  of  commis- 
sioners, or  each  commissioner,  seems  to  have  the  power  of  fram- 
ing their  own  rules  of  practice,  always,  however,  subordinate  to 
the  principles,  first,  that  each  case  shall  begin  with  an  applica- 
tion, either  from  the  creditor  (where  that  is  permitted)  or  the 
debtor,  under  oath,  and  then  full  notice,  by  advertisement  or 


1  N.  H.  Rev.  Stat.  c.  134;  Beard  v.  Kimball,  11  N.  H.  471;  Mass.  Rev.  Stat, 
c.  238,  §  3;  Mann  v.  Huston,  1  Gray,  250;  Conn.  Stat,  of  1828;  Bates  v.  Coe,  10 
Conn.  280 ;  Laws  of  Penn.,  ed.  of  1847,  c.  592.  No  preference  among  creditors  allowed, 
except  for  wages  of  labor,  provided  tbat  tbe  claims  of  laborers  thus  preferred  shall  not 
severally  exceed  the  sum  of  fifty  dollars.  Rev.  Stat,  of  New  Jersey,  tit.  9,  c.  1,  §  1. 
All  preferences  of  one  creditor  over  another,  or  whereby  any  one  or  more  shall  be  first 
paid,  or  have  a  greater  proportion  in  respect  of  his  or  their  claim  than  another,  shall  be 
deemed  fraudulent  and  void,  excepting  mortgage  and  judgment  creditors  when  the 
judgment  has  not  been  by  confession  for  the  purpo.'je  of  preferring  creditors.  Ohio 
Rev.  Stat.  c.  57,  (69.)  §  1.     So  in  Iowa.     Code  of  Iowa,  1851,  c.  62,  §  977. 

2  And  in  like  manner  it  was  provided,  by  the  7th  section  of  the  U.  S.  Act,  of  1841, 
that  "  as  well  the  assignee  as  the  creditor  shall  have  a  right  to  a  trial  by  jury,  upon  an 
issue  to  be  directed  by  such  court  to  ascertain  the  validity  of  such  debts  or  other 
claims. 


CH.  XV.]  OF  BANKRUPTCY  AND  INSOLVENCY.  279 

otherwise,  to  all  interested,  with  sufficient  delay,  and  convenient 
arrangement  as  to  time  and  place.  And,  secondly,  all  the  facts 
material  to  any  party,  are  to  be  proved  before  the  proper  tribunal, 
by  proper  evidence,  verified  by  oath,  and  subject  to  cross-exami- 
nation, and  generally  governed  by  the  law  of  evidence. 

There  is  also  introduced  into  most  of  these  codes  a  rule  derived 
from  equity  practice,  by  which  the  debtor  may  be  compelled  to 
answer,  under  oath,  upon  the  interrogatories  put  to  him  by  the 
commissioners,  or  by  one  or  more  creditors;  especially  upon 
matters  bearing  on  the  question  whether  he  has  made  any  fraud- 
ulent or  favoring  assignments  of  property,  with  a  view  to  bank- 
ruptcy, or  while  actually  insolvent.'  Bui  the  common-law 
privilege  would  in  most  cases  still  be  allowed  him,  of  refusing  to 
answer  any  question,  if  the  question  could  expose  him  to  punish- 
ment for  a  crirae.2 

1  It  was  provided,  in  the  U.  S.  Bankrupt  Act  of  1841,  that  the  bankrupt  should  be 
subject  to  examination  under  oath,  "  in  all  matters  relating  to  such  bankruptcy  and  his 
acts  and  doings,  and  his  property  and  rights  of  property,  \'riiich,  in  the  judgment  of 
such  court,  are  necessary  and  proper  for  the  purposes  of  justice."  And  in  the  Act  12  & 
13  Vict.  c.  106,  §§  117,  260,  a  similar  provision  occurs ;  and  the  bankrupt  may  be  com- 
pelled, under  pain  of  committal,  to  disclose  any  secret  grant,  conveyance,  or  conceal- 
ment of  his  lands,  tenements,  goods,  money,  or  debts,  and  to  reduce  his  answers  into 
writing,  which  examination,  so  reduced  into  writing,  the  said  bankrupt  shall  sign  and 
subscribe.    Ex  parte  Page,  1  B.  &  Aid.  568. 

2  Archbold  on  Bankruptcy,  277;  Ex  parte  Cossens,  Buck's  Cases,  531.  In  the 
matter  of  Worrall.  This  rule  may,  however,  require  some  qualification ;  for,  in  the 
case  above  cited,  it  is  said,  by  Lord  Chancellor  Eldon :  "  I  conceive  that  there  is  no 
doubt  that  it  is  one  of  the  most  sacred  principles  in  the  law  of  this  country,  that  no 
man  can  be  called  on  to  criminate  himself,  if  he  chose  to  object  to  it;  but  I  have  al- 
ways understood  that  proposition  to  admit  of  a  qualification  with  respect  to  the  juris- 
diction in  bankruptcy,  because  a  bankrupt  cannot  refuse  to  discover  his  estate  and 
effects,  and  the  particulars  relating  to  them,  though,  in  the  course  of  giving  information 
to  his  creditors  or  assignees  of  what  his  property  consists,  that  information  may  tend 
to  show  he  has  property  which  ho  has  not  got,  according  to  law ;  as  in  the  case  of 
smuggling,  and  the  case  of  a  clergyman  carrying  on  a  farm,  which  he  could  not  do 
according  to  the  act  of  parliament,  except  under  the  limitation  of  the  late  act;  and  the 
case  of  persons  having  the  possession  of  gunpowder  in  unlicensed  places,  whereby  they 
become  liable  to  great  penalties,  whether  the  crown  takes  advantage  of  the  forfeitures 
or  not;  in  all  these  cases  the  parties  are  bound  to  tell-their  assignees,  by  the  examina- 
tion of  the  commissioners,  what  their  property  is.  and  where  it  is,  in  order  that  it  may 
be  laid  hold  of  for  the  purposes  of  the  creditors."  And  in  1  Rose's  Cases  in  Bank- 
ruptcy, 407,  in  Ex  parte  Oliver,  seven  years  before  the  case  in  Buck  was  decided,  it 
was  held,  by  Lord  Eldon,  that  the  court  had  power  to  punish  a  bankrupt  for  contempt, 
who  refused  to  answer  any  questions  regarding  his  estate,  even  though  the  answer 
would  criminate  himself.  2  Ves.  &  Beame,  244,  S.  C.  In  Pratt's  case,  1  Glyn  &  J. 
58,  and  Montague  &  Bligh,  203,  the  doctrine  was  broadly  stated  that  the  bankrupt  was 
bound  to  disclose  all  circumstances  respecting  his  property,  be  the  consequences  what 
they  might.  And  see  Ex  parte  Meymot,  1  Atk.  200;  Ex  parte  Nowlan,  11  Ves.  514. 
But  in  Ex  parte  Kirby,  1  Mont.  &  McA.  229,  Lord  Lyndhurst  was  unwilling  to  admit 
that  the  commissioners  could  dispense  with  the  general  rule  of  law,  that  no  person  can 
be  compelled  to  criminate  himself.  The  rule,  however,  in  view  of  later  cases,  which 
went  to  a  great  extent  upon  the  opinion  of  Lord  Eldon,  above  quoted,  we  think  may 
be  stated  as  follows :  The  bankrupt  may  be  compelled  to  answer  any  question  relating 


280 


ELEMENTS    OF   MERCANTILE   LAW. 


[CIL  XV. 


The  power  to  compel  an  answer  is  given  to  the  commissioners, 
by  authorizing  them  to  issue  a  capias,  and  commit  a  recusant  for 
contempt,  as  a  common-law  court  could  do.^ 

At  common  law,  any  kind  or  amount  of  preference  of  one  or 
more  creditors  over  others,  was,  as  we  have  seen,  valid.  That  is, 
the  law  required  of  a  debtor  to  pay  his  debts;  but  permitted  him 
to  pay  any  debt  at  his  own  election,  although  by  such  an  appro- 
priation of  his  means,  he  could  pay  no  part  of  any  other.^  As, 
however,  the  general  purpose  of  the  insolvent  laws  is  to  secure 
an  equal  division  of  all  the  assets  among  all  the  creditors,  for 
this  purpose  they  avoid  any  payment,  assignment,  or  transfer 
which  would  have,  or  was  intended  to  have,  the  effect  of  favoring 
a  part  of  the  creditors  at  the  expense  of  the  others. 

There  is,  however,  an  obvious  difficulty  in  applying  this  rule. 
If  a  trader,  as  is  usually  the  case,  passes  gradually  into  a  state 
of  insolvency,  almost  any  creditor,  who  has  the  good  fortune  to 
be  paid  in  full,  gains  an  advantage  over  the  rest,  and  reduces  the 
means  of  the  insolvent  to  their  injury.  A  line,  however,  must 
be  drawn  somewhere.  If  an  assignment  or  appropriation  of 
property  be  made  with  fraudulent  intent  at  any  time,  and  this 
fraud  is  known  to  the  assignee,^  the  assignment  itself  is  void  at 


to  the  disposition  of  his  property,  even  though  the  answer  may  tend  to  criminate  him. 
The  principle  of  the  rule  is  well  illustrated  in  the  case  put  by  Ershine,  C.  J.,  in  2  Dea. 
&  Chit.  214,  In  re  Heath :  "  Now,  with  respect  to  the  proposition  put  by  Mr.  IMontague, 
I  agree  with  him  that  you  could  not  ask  a  man  whether  he  had  not  robbed  another  of 
a  sum  of  money ;  because,  if  he  had  so  robbed,  the  money  would  not  be  the  property 
of  the  assignees,  but  of  the  party  robbed ;  it  would  be,  in  fact,  no  discovery  of  the 
estate  of  the  bankrupt.  But  I  can  see  no  objection  to  this  cjuestion,  (unless  it  might  be 
regarded  as  a  chain  in  evidence,  to  convict  the  party  of  robbery,)  namely:  'Had  you 
not  on  such  a  day,  and  at  such  a  place,  £100? '  And,  according  to  the  answer,  you 
might  then  interrogate  what  he  had  done  with  it.  In  the  present  case,  the  question  is, 
'  What  have  you  done  with  this  property,'  not,  '  How  did  you  obtain  \tV  And  I  think 
all  the  cases  have  been  decided  in  that  way  of  looking  at  the  question."  And  the  same 
doctrine  is  maintained  In  re  Smith,  2  Dea.  &  Chit.  230;  In  re  Peaks,  2  ib.  226. 

'  Kimball  v.  Morris,  2  Met.  573,  Archbold,  278.  . 

-  In  relation  to  the  matter  of  preference,  see  cases  above  cited,  p.  276,  n.  4. 

'^  In  Cook  V.  Caldecott,  Moody  &  Malkin,  525,  the  law  is  clearly  stated  by  Lord 
Tenterden,  C.  J.:  "All  other  proof  of  any  act  of  bankruptcy  previous  to  the  sales  in 
question  having  failed,  the  only  question  is,  whether  the  transactions  in  themselves,  or 
either  of  them,  are  to  be  considered  as  acts  of  bankruptcy  within  the  6  G.  4,  c.  16,  s.  3. 
The  words  of  the  clause  are  '  fraudulent  gift,  delivery,  or  transfer,'  the  word  '  fraudu- 
lent '  of  course  applying  to  each  of  those  which  follow  it.  Now  the  sale  is  a  '  trans- 
fer,' and  therefore  may  come  within  the  provisions  of  the  statute  as  a  'fraudulent 
transfer.'  But  though  it  may  do  so,  it  is  not,  from  its  nature,  a  transaction  exposed 
to  the  same  suspicion  as  some  of  those  which  would  be  comprehended  under  the  for- 
mer words  ;  and  I  think  that  a  sale  cannot  in  reason  be  held  to  be  a  fraudulent  transfer, 
unless  it  takes  place  under  such  circumstances  that  the  buyer,  as  a  man  of  business  and 
understanding,  ought  to  suspect  and  believe  that  the  seller  means  by  it  to  get  money 
for  himself  in  fraud  of  his  creditors,  and  that  the  sale  is  made  for  that  purpose.    The 


CII  XV.]  OF   BANKllUPTCY   AND    INSOLVENCY.  281 

common  law.  But,  as  was  said,  the  mere  intention  of  giving  to 
a  creditor  priority  or  preference,  is  not  fraudulent.  And  the  na- 
tional law  contained,  and  most,  if  not  all,  our  insolvent  laws  con- 
tain a  provision  defining  a  period  of  time  prior  to  which  an 
assignee  of  property  from  a  bankrupt,  unless  there  be  a  fraud  at 
law  on  his  part  with  the  knowledge  and  connivance  of  the  as- 
signee, is  valid;  but  any  assignment  or  transfer  or  payment 
after  it,  if  made  by  the  bankrupt  in  contemplation  of  bankruptcy 
or  insolvency,  is  void,  however  innocent  or  ignorant  the  assignee.' 
In  the  national  law  this  was  two  months;  it  differs  in  the  differ- 
ent States,  but  is  about  the  same  time  generally.^ 


question,  therefore,  for  the  jury  is,  whether  they  think  that  the  defendant,  as  a  man  of 
business,  ought  to  have  known  that  Doa-n  must  have  effected  these  sales,  or  either  of 
them,  for  the  purpose  of  putting  the  proceeds  in  his  own  pocket  and  defrauding  his 
creditors  ?  If  so,  the  verdict  should  be  for  the  plaintiifs,  for  all  goods  comprised  in  that 
transaction  or  delivered  subsequently  to  it." 

1  The  clause  "in  contemplation  of  bankruptcy"  has  received  judicial  construction  in 
sev6ral  cases.  In  Arnold  v.  Maynard,  2  Sto.  349,  it  was  held  by  Judge  Story  that  the 
claim  docs  not  necessarily  mean  in  contemplation  of  his  being  declared  a  bankrupt 
within  the  statute,  but  in  contemplation  of  his  actually  stopping  his  business,  because 
of  his  insolvency  and  incapacity  to  carry  it  on.  In  this  case,  the  English  authorities 
are  reviewed,  and  the  conclusion  reached  is,  that  if  when  the  party  "  is  deeply  involved 
in  debt,  and  intending  to  fail  and  break  up  his  whole  business  at  once,  he  makes  a  con- 
veyance to  a  particular  creditor  to  give  him  a  preference  over  all  the  rest,  it  seems  to 
me  irresistible  evidence  that  l;e  does  the  act  in  contemplation  of  bankruptcy.  I  do  not 
think  that  it  is  necessary  for  this  purpose  that  he  should  contemplate  the  conveyance  as 
an  act  of  bankruptcy,  or  that  he  should  make  it  with  a  present  and  immediate  intention 
to  take  the  benefit  of  that  statute.  And  in  8  Met.  385,  Jones  v.  Rowland,  it  was  held 
that,  though  insolvency  in  fact  exists,  yet  if  the  debtor  honestly  believes  he  shall  be 
able  to  go  on  in  his  business,  and  with  such  belief  pays  a  just  debt,  without  design  to 
give  a  preference,  such  payment  is  not  fraudulent,  though  bankruptcy  subsequently 
ensue.  And  the  same  doctrine  was  held  in  the  District  Court  of  Vermont  by  Prentiss, 
J.,  6  Law  Rep.  261,  In  re  Pearce,  and  in  Mitchell  v.  Gazzam,  12  Ohio,  325.  But  con- 
fession of  a  judgment  is  valid,  in  view  of  this  provision,  if  it  be  not  voluntary,  but  the 
effect  of  measures  taken  by  the  creditor,  or  in  his  power  to  take.  Haldeman  v.  Mi- 
chael, G  Watts  &  S.  128,  though  the  confession  be  but  ten  days  before  the  filing  of 
the  petition.  Taylor  v.  Whitthorn,  5  Humph.  340.  And  security  given  to  a  creditor  in 
contemplation  of  batdvruptcy,  with  a  view  to  prefer,  is  not  void,  if  the  act  be  not  strictly 
voluntary.  Phoenix  u.  Assignees  of  Ingraham,  5  Johns..  412;  M'Mechen's  Lessee  v. 
Grundy,  3  Harris  &  J.  185.  As  to  the  effect  of  a  discharge  obtained  after  such  trans- 
fer, in  contemplation  of  bankruptcy,  see  Brereton  v.  Hull,  1  Den.  75;  Beekman  v.  Wil- 
son, 9  Met.  434.  The  English  cases  on  the  construction  of  this  clause  are  numerous. 
Wedge  V.  Nevvlyn,  4  B.  &  Ad.  831 ;  Newton  v.  Chantler,  7  East,  138  et  seq. ;  Pulling  v. 
Tucker,  4  B.  &  Aid.  382 ;  Fidgeon  v.  Siiarpe,  5  Taunt.  539  ;  Flook  v.  Jones,  4  Bing. 
20 ;  Poland  v.  Glyn,  4  Bing.  22,  n. ;  Ridley  v.  Gyde,  9  Bing.  344  ;  Morgan  v.  Brundrett, 
5  B.  &  Ad.  289  ;  Baxter  v.  Pritchard,  1  Ad.  &  Ell.  456 ;  Abbott  v.  Burbage,  2  Bing. 
N.  C.  444  ;  Compton  v.  Bedford,  1  W.  Bl.  362  ;  Carr  v.  Burdiss,  1  C.  M.  &  R.  447  ; 
Hartshorn  v.  Slodden,  2  B.  &  P.  582  ;  Gibbins  v.  Phillips,  7  B.  &  C.  529  ;  Atkinson  v. 
Brindall,  2  Bing.  N.  C.  225  ;  Belcher  v.  Prittic,  10  Bing.  408. 

-  The  clause  of  the  late  national  law  was  :  •'  Provided  that  all  dealings  and  transac- 
tions by  and  with  any  bankrupt  bona  fide  made  and  entered  into  more  than  two  months 
before  the  petition  filed  against  him  or  by  him,  shall  not  be  invalidated  or  affected  by 
this  act."  And  a  similar  provision  occurs  in  the  English  Bankrupt  Law.  1  Moody  v. 
Malkin,  141  ;  Cowie  v.  Harris.  In  this  case,  the  commission  in  bankruptcy  was  issued 
on  the  14th  of  May,  1825.     Goods  of  the  bankrupt  had  been  deposited  with  a  pawn- 

24* 


■f 


282     '  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV.     'jjj 

In  computinj^  this  time,  it  is  said  that  the  day  on  which  the 
transaction  took  place,  or  the  day  on  which  the  petition  is  filed, 
must  be  excluded.'  In  legal  computations  of  time,  generally,  the 
law  knows  no  fractions  of  a  day.  But  in  the  application  of  the 
insolvent  laws,  the  very  hour  is  inquired  into.  The  reason  of 
this,  or  at  least  its  justice  is  obvious.  If  one's  rights  depend 
upon  whether  he  has  lain  in  prison  two  months,  or  whether  a 
certain  thing  was  done  more  or  less  than  two  months  before 
another,  or  whether  a  petition  was  filed  under  a  law  before  that 
law  was  repealed  or  not,  it  is  as  proper  to  ascertain  the  exact 
time,  as  it  is  when  there  is  a  question  whether  an  attachment  of 
land  or  a  record  of  a  conveyance  was  first  made.  This  has  been 
denied  in  some  cases,  but  not,  we  think,  on  good  grounds.^ 

It  would  seem  that  this  question  of  fraudulent  preference  should 
stand  upon  the  same  footing,  as  questions  of  fraud  generally.  It 
is  a  mixed  question  of  fact  and  of  law;  and  so  far  as  it  depends 
upon  law,  or  upon  construction,  the  court  may  decide  it,  a'nd 
the  parties  have  a  right  to  have  it  decided  by  the  court.  But  so 
far  as  it  rests   upon  proof,  or  is  to  be  inferred  from  evidence 

broker  on  the  14tli  of  March,  1825.  The  Attorney-General  for  the  plaintiffs,  did  not 
contend  that  they  were  deposited  witliin  the  two  month's,  and  Lord  Tenterden,  C.  J., 
said:  ''  With  respect  to  the  goods  deposited  on  tlie  14th,  the  right  of  the  plaintiffs  will 
depend  upon  the  validity  of  the  transaction,  as  between  the  bankrupt  and  the  creditor ; 
for  both  days  cannot  be  reckoned  inclusively,  so  as  to  make  March  the  14th  not  more 
than  two  calendar  months  before  May  the  14th,  the  date  of  the  commission."  S.  P. 
Ex  parte  Farquhar,  1  Mont.  &  McA.  7. 

1  Thomas,  assignee  of  Houlbrooke  v.  Dcsanges,  2  B.  &  Aid.  586.  In  this  case  the 
facts  were,  tliat  the  bankrupt  was  surrendered  in  discharge  of  his  bail,  on  June  1st, 
1818,  between  six  and  eight  o'clock  in  the  evening,  and  on  the  same  day  between  one  and 
two  o'clock  in  the  afternoon,  a  writ  oi  fieri  facias  .was  delivered  to  the  defendants,  who,  by 
their  officer,  entered  into  tlie  bankrupt's  premises  and  seized  the  goods.  The  bankrupt 
lay  in  prison  more  tlian  two  months  afterwards.  The  plaintiffs  insisted  that  the  act  of 
bankruptcy  having  been  committed  on  the  same  day  that  the  goods  were  taken  in  exe- 
cution, the  plaintiffs  must  in  law  be  considered  as  having  the  property  of  the  goods 
vested  in  them  during  the  whole  of  that  day,  because  there  can  be  no  fraction  of  a  day. 
Abbott,  C.  J.,  thought  that  the  court  might  notice  the  fraction  of  a  day  in  this  case,  and 
nonsuited  the  plaintiffs,  and  a  rule  to  set  aside  the  nonsuit  was  refused.  In  the  mat- 
ter of  Richardson,  2  Story,  571,  Stori/,  J.,  said:  "I  am  aware  that  it  is  often  laid  down 
that  in  law  there  is  no  fraction  of  a  day.  But  this  doctrine  is  true  only  sub  modo,  and 
in  a  limited  sense,  where  it  will  promote  the  right  and  justice  of  the  case.  It  is  a 
mere  legal  fiction,  and  therefore,  like  all  other  legal  fictions,  is  never  allowed  to 
operate  against  the  right  and  justice  of  the  case.  S.  P.  Sadler  v.  Leigh,  4  Camp, 
195;  Ex  parte  Farquhar,  1  Mont.  &  McA.  7  ;  Ex  parte  D'Obrce,  8  Ves.  82;  Wy- 
down's  case,  14  Ves.  80.  We  are  aware  of  no  cases  where  the  technical  rule  of 
the  law  that  no  fraction  of  a  day  can  be  allowed,  has  been  adhered  to  in  bankruptcy, 
save  The  matter  of  David  Howes,  6  Law  Reporter,  297  ;  and  In  the  matter  of 
Wellman,  7  ib.  25,  wliere  the  doctrine  laid  down  in  the  first  case  is  maintained  and 
defended.  The  authorities  are  reviewed  in  the  opinion  of  the  court  at  some  length, 
and  the  views  of  the  judge,  though  savoring  of  technicality,  are  ably  sustained. 

-  See  cases  cited  in  the  preceding  note. 


en.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  283 

direct  or  circumstantial,  it  would  seem  to  be  a  question  of  fact, 
upon  which  a  jury  might  pass. 

It  may  be  remarked  in  this  connection,  although  true  without 
any  reference  to  the  laws  of  bankruptcy  or  insolvency,  that  if 
one  purchases  of  another  property,  either  real  or  personal,  for  its 
full  value,  and  pays  the  price  in  money,  it  is  still  a  fraudulent 
transaction,  provided  the  purchaser  did  it  with  intent  to  aid  the 
seller  in  defrauding  his  creditors.  And  in  this  case  the  sale  is 
wholly  void,  and  the  assignee  of  the  seller,  if  he  goes  iutO  bank- 
ruptcy, will  recover  the  property,  although  the  sale  take  place 
before  the  limited  period  above  referred  to.^ 

The  very  important  influence  of  bankruptcy  or  insolvency  in 
extending  the  lien  of  a  seller,  so  that  he  may  reclaim  his  goods, 
unless  they  have  come  into  the  actual  possession  of  the  insolvent, 
or,  in  other  words,  the  right  which  insolvency  gives  to  the  seller, 
of  stopping  the  goods  in  transitu,  is  fully  considered  in  the  chap- 
ter on  Stoppage  in  Transitu.  This  right  depends  of  course  upon 
insolvency,  but  not  necessarily  upon  legal  and  formal,  or,  as  it  is 
sometimes  called,  notorious  insolvency .^ 


SECTION  IV. 

WHO    MAY    BE   INSOLVENTS.   . 

The   statutes  provide  with  much  minuteness,  as  to  who  may 
become,  or  m.ay  be  made  bankrupt.^     In  England,  the  statute  of 

1  Arnold  v.  Maynard,  2  Sta  350  ;  Fidgeon  v.  Sliarpe,  5  Taunt.  539  ;  liassels  v.  Simp- 
son, 1  Doug.  89  ;  Worsley  v.  de  Mattos,  1  Burr.  467  ;  Newton  v.  Chantler,  7  E.  138  ; 
Chase  v.  Goble,  2  M.  &  Gr.  930 ;  Carr  v.  Burdiss,  1  C.  M.  &  R.  443 ;  Siebert  v.  Spooner, 
1  M.  &  W.  714;  Cook  v.  Caldecott,  4  C.  &  P.  315  ;  Baxter  v.  Pritchard,  1  Ad.  &  El. 
456,  460;  Graham  v.  Chapman,  11  E.  L.  &  E.  498;  Newnham  v.  Stevenson,  3  Eng. 
Law  and  Eq.  512;  Butler  v.  Hildreth,  5  Met.  49. 

-  See  the  chapter  on  Stoppage  in  Transitu  and  cases  cited  there.  . 

^  Thus  in  the  late  National  Banlcrupt  Law,  provision  was  made  for  voluntary  and 
involuntary  bankrupts.  In  the  first  section  of  the  act  it  was  provided  that :  "  All 
persons  whatsoever,  residing  in  any  State,  district,  or  territory  of  the  United  States, 
owing  debts,  which  shall  nut  have  been  created  in  consequence  of  a  defalcation  as  a 
public  officer;  or  as  executor,  administrator,  guardian,  or  trustee,  or  while  acting  in 
any  other  judiciary  capacity,  who  shall,  by  petition,  setting  forth  to  the  best  of  his 
knowledge  and  belief,  a  list  of  his  or  their  creditors,  their  respective  places  of  residence, 
and  the  amount  due  to  each,  together  with  an  accurate  inventory  of  his  or  their  property, 
rights,  and  credits,  of  every  name,  kind,  and  description,  and  the  location  and  situation 
of  each  and  every  parcel  and  portion  thereof,  verified  by  oath,  or  if  conscientiously  scrupu- 
lous, of  taking  an  oath,  by  solemn  affirmation,  apply  to  the  proper  court,  as  hereinafter 
mentioned,  for  the  benefit  of  this  act,  and  therein  declare  themselves  to  be  unable  to 


284  ■        ELEMENTS    OF   MERCANTILE^  LAW.  [CH.  XV. 

Geo.  III.  c.  16,  §  2,  collects  in  one  clause  the  various  kinds  of 
persons  whom  the  bankrupt  law  considered  as  traders,'  and  some- 
meet  their  debts  and  engapjemcnts,  shall  be  deemed  bankrupts  within  the  provisions  of 
this  act.  and  may  be  so  declared  accordin^^^ly  by  a  decree  of  sucii  court ;  all  persons 
bcinr;  merchants,  or  using  the  trade  of  merchandise,  all  retailers  of  merchandise,  and 
all  Ininkers,  factors,  brokers,  underwriters,  or  marine  insurers,  owing  debts  to  the 
amount  of  not  less  than  two  thousand  dollars,  shall  be  liable  to  become  bankrupts 
within  the  true  intent  and  meaning  of  this  act,  and  may  uj)on  the  petition  of  one  or  more 
of  their  creditors,  to  whom  they  owe  debts  amounting  in  tiie  whole  to  not  less  than 
five  hundred  dollars,  to  the  appropriate  court,  be  so  declared  accordingly,  in  tlie  follow- 
ing cases,  to  wit:  whenever  such  person  being  a  merchant,  or  being  a  retailer  of  mer- 
chandise, or  actually  using  the  trade  of  mercliandise,  or  being  a  banker,  factor, 
broker,  underwriter,  or  marine  insurer,  shall  depart  from  the  State,  district,  or  territory, 
of  which  he  is  an  inhabitant,  with  intent  to  defraud  his  creditors ;  or  shall  conceal  him- 
self to  avoid  being  arrested ;  or  shall  willingly  or  fraudulently  procure  himself  to  be 
arrested,  or  his  goods  and  chattels,  lands  or  tenements,  to  be  attached,  distrained,  or 
sequestrated,  or  taken  in  execution ;  or  shall  remove  his  goods,  chattels,  and  effects,  or 
conceal  them  to  prevent  their  being  levied  upon,  or  taken  in  execution,  or  by  any  other 
process ;  or  make  any  fraudulent  conveyance,  assignment,  sale,  gift,  or  other  transfer 
of  his  lands,  tenements,  goods,  or  chattels,  credits,  or  evidence  of  debt."  And  similar 
provisions  occur  in  other  statutes. 

1  In  this  note  we  give  the  enumeration  which  occurs  in  the  English  Statute  of  Con- 
solidation of  the  Bankrupt  Laws,  12  &  13  Vict.  c.  106,  ()  6.5.  We  cite  important  cases 
upon  the  construction  the  courts  have  put  upon  several  of  their  classes  of  traders. 
They  will  be  mostly  found  collected  in  the  notes  of  Chitty's  Statutes  of  Practical 
Utility,  but  which  may  not  be  accessible  to  the  general  reader.  "  That  all  alum 
makers,  apothecaries,  auctioneers,  bankers :  Ex  parte  Wilson,  1  Atk.  218;  Ex  parte 
Wyndham,  1  M.  Y).&.  D.  146;  Ex  parte  Hall,  3  Deac.  405;  Ex  parte  Brundrett,  2 
Deac.  219;  Ex  parte  Brown,  2  M.  D.  &  D.  752.  Bleachers,  brokers  :  Pott  i^.  Turner, 
6  Bing.  702;  Highmore  v.  Molloy,  1  Atk.  206  ;  Kawlinson  z;.  Pearson,  5  B.  &  Aid.  124  ; 
Ex  parte  Stevens,  4  Madd.  256  ;  Ex  parte  Phipps,  2  Deac.  487 ;  Ex  parte  Harvey,  1  Deac. 
570 ;  2  M.  &  Ayr.  593  ;  Hankey  v.  Jones,  Cowp.  745  ;  Ex  parte  Gem,  2  M.  D.  &  D.  99  ; 
^.r  parte  Moore,  2  Deac.  287.  Brickmakers  :  Wells  v.  Parker,  1  T.  R.  34;  Sutton  v. 
Weelev,  7  East,  442;  Ex  parte  Harrison,  1  Bro.  C.  C.  173.  Builders:  Ex  parte  Nei- 
rinckx",  2  M.  &  Ayr.  384  ;  Ex  parte  Edwards,  1  INI.  D.  &  D.  3  ;  Ex  parte  Stewart,  18  L.J, 
Bankr.  14;  Stuart  v.  Sloper,  3  Ex.700.  Calenderers,  Carpenters  :  Cooke,  B.  L.  49  ; 
Chapman  w.  Lamphire,  3  Mod.  155;  Kirney  w.  Smith,  1  Ld.  Raym.  741.  Carriers, 
cattle  or  sheep  salesmen:  Ex  parte  Newall,  3  Deac.  333.  Coach  proprietors:  Ex 
parte  Walker,  2  M.  &  Ayr.  267  ;  Martin  v.  Nightingale,  1 1  Moo.  305.  Cow-keepers  : 
Carters.  Dean,  1  Swanst.  64;  Ex  parte  Deering,  De  Gex,  398.  Dyers,  fullers,  keepers 
of  inns:  Smith  v.  Scott,  9  Bing.  14;  Ex  parte  Birch,  2  M.  D.  &  D.  659  ;  see  also. 
Ex  parte  Willes,  2  Deac.  1 ;  Ex  parte  Bowers,  2  Deac.  99  ;  Gibson  v.  King,  10  M.  &  W. 
667  ;  King  v.  Simmonds,  12  Jur.  903  ;  Ex  parte  Daniell,'7  Jur.  334.  Taverns,  hotels, 
or  coffee-houses,  lime-burners,  livery  stable  keepers:  Ex  parte  Lewis,  2  Dea.  318; 
Caunau  v.  Denew,  10  Bing.  292.  Market  gardeners:  Ex  parte  Hammond,  1  De  G. 
93 ;  also  Carter  v.  Dean,  1  Swanst.  64.  Millers,  packers,  printers,  ship-owners  :  Ex 
parte  Bowes,  4  Ves.  168;  £j:  parte  Wiswould,  Mont.  263.  Shipwrights,  victuallers, 
warehousemen,  whai'fingers,  persons  using  the  trade  or  profession  of  scrivener  receiving 
other  men's  moneys  or  estates  into  their  trust  or  custody :  Adams  i'.  Malkin,  3  Camp. 
534;  Let  v.  Melville,  3  Man.  &  G.  52;  Hamson  v.  Harrison,  2  Esp.  555;  Be  Lewis, 
2  Rose,  59  ;  Kurd  v.  Brydges,  1  Holt,  N.  P.  654.  In  re  Warren,  2  Sch.  &  Lef.  414  ; 
Hutchinson  v.  Gascoigne,  Holt,  N.  P.  507  ;  Ex  parte  Bath,  Mont.  82  ;  Ex  parte  Gem, 
2  M.D.  &  D.  99.  Persons  insuring  ships  or  their  freight,  or  other  matters,  against  perils 
of  the  sea,  and  all  persons  using  the  trade  of  merchandise  by  way  of  bargaining, 
exchange,  bartering,  commission,  consignment,  or  otherwise,  in  gross  or  by  retail,  and 
all  persons  who,  either  for  themselves  or  as  agents  or  factors  for  others,  seek  their 
living  by  buying  and  selling  :.  Ex  parte  Herbert,  2  Rose,  248  ;  Hale  v.  Small,  2  Bro.  & 
B.  25  ;  Parker  v.  Wells,  Cooke,  58 ;  Summcrsett  v.  Jarvis,  3  Bro.  &  B.  2 ;  Bolton  v. 
Sowerby,  1 1  East,  274  ;  Patten  v.  Browne,  7  Taunt.  409  ;  Ex  parte  Salkeld,  3  M.  D.  & 
D.  125  ;  Ex  parte  Atk.  1  M.  D.  &  D.  300;  Dally  v.  Smith,  4  Burr.  2148;  Heanny  v. 
Birch,  3  Camp.  233  ;  Port  v.  Turton,  2  Wils.  169 ;  Paul  v.  Dowling,  3  C.  &  P.  500; 


CII.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  285 

what  enlarged  the  provisions  of  former  statutes  in  this  particular. 
But  still  the  operation  of  the  law  was  confined  to  traders.  It 
will  be  remembered,  however,  thftt  the  insolvent  laws  originally- 
differed  from  the  bankrupt  laws,  in  the  fact  that  they  were  not " 
confined  to  traders  ;  that  is,  only  a  trader  could  be  proceeded 
against  in  inviliim^  and  being  so  proceeded  against,  his  debt  was 
discharged.  But  any  debtor  liable  to  arrest  migi|>  seek  relief 
under  the  insolvent  laws,  and  would  be  by  them  protected  from 
imprisonment.^  Now,  all  our  present  statutes  are  called  insolvent 
laws;  and  t^eir  operation  is  very  wide.  In  England^  for  ex- 
ample, no  feme  covert  could  be  a  bankrupt  who  was  not  lawfully 
a  sole  trader; 2  but  here,  it  may  be  presumed,  that  any  woman, 
whether  married  or  not,  who  by  the  present  or  any  future  law  of 
a  State,  should  be  liable  to  suit  upon  a  debt,  could  go  into  insol- 
vency.^ (^ 

An  infant  cannot  be  made  a  bankrupt ;  *  but  we  do  not  know 
why  he  may  not  be  declared  insolvent  on  his  own  petition  ;  for 
the  modern  rule  is,  that  none  of  his  debts  are  absolutely  void, 

Ex  parte  Burgess,  2  G.  &  J.  183;  Heane  v.  Eogers,  9  B.  &  C.  577  ;  Ex  parte  Bowers, 
2  Deac.  99;  Ex  parte  Wiswoukl,  Mont.  2G3  ;  Patman  r.  Vaughan,  1  T.  E.  572; 
Ex  parte  Cromwell,  1  M.  D.  &  D.  158;  Ex  parte  Blackmore,  6  Ves.  3;  Hankey  v. 
Jones,  Cowp.  748  ;  Bolton  v.  Sowerby,  11  East,  274 ;  Gale  v.  Half  knight,  3  Stark.  56  ; 
Ex  parte  Lavender,  4  D.  &  Ch.  484  ;  Valentine  v.  Vaughan,  Pea.  76  ;  iS"ewton  v.  Trigg, 
1  Salk.  109  ;  Mayo  v.  Archer,  1  Stra.  513  ;  Stewart  v.  Ball,  2  N.  R.  78 ;  Cobb  v.  Symonds, 
5  B.  &  Aid.  516;  Saunderson  v.  Bowles,  4  Burr.  2066  ;  Ex  parte  Meymot,  1  Atk.  196  ; 
Millikin  v.  Brandon,  1  C.  &  P.  380  ;  Colt  v.  Nettervill,  2  P.  Wms.  308.  Or  by  buying 
and  letting  for  hire,  or  by  the  workmanship  of  goods  or  commodities,  shall  be  deemed 
traders  liable  to  become  bankrupt ;  provided  that  no  farmer,  grazier,  common  laborer, 
or  workmen  for  hire,  receiver-general  of  the  taxes,  or  member  of,  or  subscriber  to  any 
incorporated  commercial  or  trading  company  established  by  charter  or  act  of  parlia- 
ment, shall  be  deemed  as  such  a  trader  liable  to  become  bankinipt."  And  in  this 
country  it  was  held,  that  a  distiller  whose  business  consisted  in  the  purchase  and  sale  of 
grain  and  the  conversion  of  it  into  alcohol ;  and  the  sale  of  alcohol,  and  in  the  purchase 
of  domestic  animals  and  the  sale  of  them,  or  of  their  flesh  after  being  fattened,  was  of 
such  an  occupation  as  subjected  him  to  the  operation  of  the  bankrupt  act,  on  the 
petition  of  a  creditor.  In  the  matter  of  Eeles,  5  Law  Reporter,  273.  And  see  the 
instructive  opinion  of  Conlding,  J.,  in  this  case. 

1  Upon  this  distinction  beWcen  bankrupt  and  insolvent  laws,  which  prevailed  till 
recently,  see  Shee  v.  Hale,  13  Ves.  404;  and  Rochford  v.  Hackman,  10  E.  L.  &  E.  64. 

■^  La  Vie  v.  Philips,  1  Wm.  Black.  570  ;  Ex  parte  Carrington,  1  Atk.  206.  And  the 
wives  of  convicts  may  be  decreed  bankrupts.     Ex  parte  Pranks,  7  Bing.  762. 

3  Thus  in  Magrath  v.  Robertson,  1  Desau.  445,  it  was  held  that  a  wife  may  become 
a  sole  trader  or  dealer  by  permission  of  her  husband,  even  without  deeds ;  and  she 
becomes  entitled  to  all  her  earnings  as  her  separate  estate.  King  v.  Paddock,  18  Johns. 
141  ;  Baker  V.  Barney,  8  Johns.  72. 

*  'Ex  parte  Adam,  1  Ves.  &  B.  494;  Stevens  v.  Jackson,  4  Campb.  164:  6  Taunt. 
106  ;  S.  C.  Ex  parte  Moule,  14  Ves.  603  ;  O'Brien  v.  Currie,  3  C.  &  P.  283 ;  Bclton 
V.  Hodges,  9  Bing.  365 ;  Thornton  v.  lUingworth,  2  B.  &  C.  826 ;  Mason  v.  Denison, 
15  Wend.  64.  But  when  he  had  held  himself  out  as  an  adult,  and  traded  as  such 
two  years,  it  was  held  that  he  might  be  decreed  a  bankrupt.  Ex  parte  Watson,  16  Ves. 
265  ;  Ex  parte  Bates,  2  M.  D.  &  D.  337. 


286  ELEMENTS    OF  MERCANTILE   LAW.  [CIL  XV. 

but  only  —  if  not  for  necessaries  —  voidable  by  him.  And  there- 
fore unless,  or  until,  they  are  avoided,  he  is  the  same  as  any  other 
debtor.'  • 

A  lunatic,  while  insane,  could  perhaps  incur  no  debt  for  which 
he  could  be  held  responsible  ;  unless,  possibly  for  his  own  benefit, 
it  was  permitted  to  him  to  make  a  valid  contract  for  necessaries.^ 
In  such  casijlhe  could  become  insolvent  for  that,  and  he  certainly 
could  be  declared  insolvent  on  the  petition  of  a  guardian,  for 
debts  contracted  before  insanity,  or  in  a  lucid  interval.^ 

If  a  debtor  attempts  to  place  his  property  in  %ie  hands  of 
assignees,  for  the  benefit  of  his  creditors,  this,  where  there  is  a 
bankrupt  law,  is  an  act  of  bankruptcy.  That  is,  the  debtor  may 
be  proceeded  against  as  a  bankrupt,  and  his  voluntary  assign- 
ment is  void,  and  the  assignee  appointed  under  the  bankrupt 
commission,^takes  all  his  effects.  And  this  is  applied,  even 
where  there  is  no  intention  to  defraud ;  and  even  where  the 
debtor  provided  by  the  express  terms  of  the  assignment,  that  his 
effects  should  be  applied  and  distributed  according  to  the  provis- 
ions of  the  bankrupt  law.'^     This   would   now  be  true  in  this 

1  Upon  this  point  see  the  cases  cited  in  the  Cliapter  on  Infancy,  on  the  modern  doc- 
trine of  contracts  void  and  voidable. 

■-^  See  Gore  v.  Gibson,  13  M.  &  W.  627  ;  Niell  v.  Morley,  9  Ves.  478  ;  McCrillis  v. 
Bartlett,  8  N.  H.  569  ;  Richardson  v.  Strong,  13  Ired.  106  ;  Baxter  v.  Earl  of  Ports- 
mouth, 5  B.  &  C.  170. 

3  Molton  I'.  Camroux,  4  Exch.  17,  Anon.  13  Ves.  590;  Ex  parte  Vriddey,  Archb. 
Banliruptcy,  56 ;  Ex  parte  Layton,  6  Ves.  440 ;  Jackson  dem  Caldwell  v.  King, 
4  Cow.  207. 

*  JMann  v.  Huston,  1  Gray,  253.  Provision  is  usually  made  in  the  bankrupt  laws, 
that  all  assignments  or  conveyances  shall  be  void,  which  are  made  within  a  certain 
time  before  petition  filed,  and  shall  constitute  in  themselves  acts  of  bankruptcy. 
Stats.  12  &  13  Vict.  c.  106,  §  68.  In  Barton  w.  Tower,  5  Law  Reporter,  214,  an  assign- 
ment of  their  property  had  been  made  by  two  partners,  with  a  direction  that  it  should 
be  distributed  among  their  creditors  by  the  assignees,  "  in  the  same  manner  as  if  the 
same  were  in  the  hands  of  an  assignee  under  the  bankrupt  act  of  the  United  States,  by 
virtue  of  proceedings  duly  had  in  bankruptcy."  This  assignment  was  held  an  act  of 
bankruptcy  and  void.  And  Cunkling,  J.,  delivering  the  opinion  of  the  court,  said : 
"  There  arc  three  descriptions  of  fraudulent  conveyances,  assignments,  &c.,  which  bring 
a  merchant,  banker,  factor,  &c.,  within  the  operation  of  the  first  section  of  the  bankrupt 
act.  1.  Such  as  are  fraudulent,  or  against  the  common  law,  or  the  provision  of  such 
English  statutes  as  have  been  incorporated  into  the  jurisprudence  of  this  country.  2.  (As 
I  am  now  well  satisfied,  whatever  doubts  I  may  have  originally  entertained,)  such  as 
are  voluntarily  made,  in  contemplation  of  bankruptcy,  and  for  the  purpose  of  giving 
a  preference  to  one  or  more  of  the  creditors  of  the  debtor  over  his  other  creditors.  The 
making  of  a  conveyance  of  the  description  lias  always  been  lield  to  be  an  act  of  bank- 
ruptcy under  the  English  bankrupt  law,  as  being  contrary  to  the  policy  of  law,  without 
any  express  words  in  the  statute.  But  in  our  act  they  are  expressly  declared  to  be 
'  utterly  void,  and  a  fraud  upon  this  act.'  3.  Assignments  of  all  the  effects  of  the 
debtor,  whether  upon  trust  for  the  benefit  of  his  creditors  or  not,  on  the  ground,  first, 
that  the  debtor  necessarily  deprives  himself,  by  such  an  act,  of  the  power  of  carrying 
on  his  trade;  and  secondly,  that  he  endeavors  to  put  his  property  under  a  course  of 
application  and  distribution  among  his  creditors,  different  from  that,  which  would  take 


CH.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  287 

country,  only  where  the  state  statutes  expressly  or  by  implication 
supersede  all  voluntary  assignnients,  and  do  not  merely  odor  the 
relief  they  provide,  to  those  who  seek  it,  leaving  them  at  liberty 
to  assign  their  effects  for  their  debts,  if  they  choose  to  do  so.i 


SECTION  V. 

OF    THE   PROOF    OF    DEBTS. 

As  the  insolvent  laws  purpose  to  divide  all  the  assets  of  the 
debtor  ratably  among  all  the  creditors,  it  follows  that  they  open 
the  way  very  widely  to  all  pt^rsons  who  have  claims  to  pre- 
sent and  prove  them.  This  proof  is  made,  in  the  first  place,  by 
the  oath  of  the  creditor,  and  if  further  proof  be  required,  by  such 
evidence  as  would  be  admissible  and  appropriate  under  the  gen- 
eral rules  of  the  law  of  evidence.^ 

The  presentation  and  proof  may  be,  in  some  degree  at  least, 
by  agent  or  attorney;  and  this  is  usually  provided  for  in  the 
statutes.  In  some  cases  it  can  only  be  by  an  agent  or  attorney  ; 
as,  when  a  corporation  is  a  creditor.  In  such  case,  the  corpora- 
tion should  act  by  an  attorney  specially  appointed  and  author- 
ized in  their  behalf.^ 

If  trustees  hold  claims  against  a  bankrupt,  and  present  them, 
it  has  been  said  that  the  cestui  que  trust  should  join  with  the 
trustee.'*     This  may  be  proper  in  many  cases,  but  in   some  it 

place  under  the  bankrupt  law.  It  is  unnecessary  to  cite  authorities  to  show  that  such 
an  assignment  is  an  act  of  bankruptcy  in  England,  because  it  has  been  a  well  settled 
and  familiar  rule.  It  is  a  sound  and  useful  rule;  and  there  is  nothing  whatever  in  the 
language  of  our  act  which  requires  a  different  construction  in  this  respect."  Ex  paHe 
Brenerman,  Crabbe,  456. 

1  See  cases  cited  above  on  the  subjects  of  assignments  at  common  law. 

2  This  is  matter  for  statute  provision,  and  occurs  in  the  bankrupt  and  insolvent  acts 
generally.  The  point  came  before  Judge  Story,  in  a  case  arising  under  the  National 
Bankrupt  Act  of  1S41.  Foster  v.  Remick,  5  Law  Reporter,  406.  '-Under  the  particu- 
lar circumstances,  I  am  satisfied  that  the  oatii  of  the  petitioning  creditors  is  not  suffi- 
cient to  establish  the  existence  of  their  debt.  In  tlie  ordinary  course  of  proceedings  of 
this  sort,  the  oath  of  the  petitioner  is  a  sufficient  proof  of  the  debt  to  sustain  his  right; 
but  it  is  liable  to  be  rebutted  by  countor  proofs,  and  may  be  overcome  by  such  proofs. 
In  this  case,  I  think  tlie  prima  facie  evidence  of  the  debt,  from  the  oath  of  the  peti- 
tioners, is  completely  overcome  by  the  proofs  on  the  otlier  side  ;  and  therefore  the  bur- 
den of  proof  is  on  the  petitioners,  to  establish  by  evidence  beyond  the  oath,  that  the 
debt  is  a  true  and  subsisting  one. 

3  1  Cooke,  124  ;  AlbanyExchange  Bank  v.  Johnson,  5  Law  Reporter,  313. 

*  In  A'-r parte  Dubois,  1  Cox,  310,  the  Lord  Chancellor  said:  "The  reason  why  a 
trustee  is  not  permitted  to  prove  the  debt  alone  under  the  commission  is,  that  he  must 
swear  to  the  debt  being  due  to  him.     Now  the  debt  being  only  due  to  him  in  trust  for 


288  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 

would  be  obviously  impossible,  as  where  the  cestui  que  trust  is  a 
young  child,'  or  a  lunatic,''^  or  out  of  the  country.  And  if  she 
were  a  married  woman,  we  should  doubt  the  propriety  of  her 
joining,  unless  under  some  particular  provision  or  peculiar  char- 
acter of  the  trust. 

If  the  creditor  be  himself  bankrupt,  so  that  his  claim  has 
passed  into  the  hands  of  his  assignee,  it  would  seem  that  the 
assignee  alone  might  present  and  prove  it  in  case  of  necessity, 
but  the  practice  appears  to  be  to  require  the  creditor's  own  oath, 
whenever  it  can  be  had.^  And  this  is  founded  on  obvious  reasons. 
We  think  they  apply  equally  to  the  case  of  a  claim  assigned, 
but  not  by  a  bankrupt.  The  recovery  is  for  the  benefit  of  the 
assignee  ;  but  at  common  law  he  must  do  everything  in  the 
name  of  the  assignor.  And  in  such  a  case,  if  the  assignor  alone 
presents  and  proves,  it  might  accrue  to  the  benefit  of  the  assignee, 
and  be  sufficient.  But  the  more  correct  way  would  be  for  as- 
signor and  assignee  to  join. 

If  a  bankrupt  holds  claims,  of  which  the  legal  title  is  in  him, 
but  the  beneficiary  interests  are  in  others,  as,  if  he  be  for  any 
purpose  a  trustee  for  others,  and  a  balance  is  due  to  him  in  that 
capacity,  or  to  the  fund  which  he  holds  representatively,  from 
his  general  assets,  he  may  present  and  prove  this  claim  against 
his  own  estate.* 

another,  it  is  rather  too  great  a  refinement  for  him  to  take  such  an  oath ;  and  if  he 
swear  the  debt  is  due  to  him  as  trustee  only,  that  is  not  sufficient,  for  it  does  not  appear 
within  certainty  that  the  debt  has  not  been  paid  to  the  cestui  que  trust.  The  cestui  que 
trust  must  therefore  join  the  trustee  in  swearing  that  no  part  of  the  debt  has  been  paid 
or  secured." 

1  Ex  parte  Belton,  1  Atk.  251. 

2  Ex  parte  Maltby,  1  Rose  Cases,  387,  In  the  matter  of  Simmons. 

3  Owen  on  Bankruptcy,  198,  who  cites  Cooke,  153.  The  practice  certainly  would  seem 
to  be  as  stated  in  the  text;  yet  it  seems  it  might  be  well  held,  that  where  the  title  has 
accrued  to  the  assignees  at  such  a  time  as  to  enable  them  to  sue  the  action  for  the  debt, 
in  their  jown  names,  and  without  naming  themselves  assignees,  if  the  debtor  of  the 
estate  they  represent  were  solvent,  they  may  prove  such  debt  against  the  estate  of  the 
debtor  when  insolvent,  without  the  necessity  of  the  oath  of  the  creditor  himself.  There 
seems  to  be  no  principle  on  which  to  found  a  distinction  between  these  two  cases.  See 
the  cases  upon  the  distinction  as  to  the  form  of  declaration,  where  property  is  acquired 
after  or  before  decree. 

*  Ex  parte  Shaw,  1  Glyn  &  J.  \21  ■,  Ex  parte  Watson,  2  V.  &  B.  414  ;  Ex  parte  Marsh, 
1  Atk.  158;  Cooke,  408,  S.  C. ;  Ex  parte  Eichardson,  3  Maddock,  138;  Buck,  202,  S. 
C.  But  it  has  been  also  held,  that  when  such  debts  are  proved  by  the  bankrupt,  and 
the  dividend  paid,  the  amount  shall  not  go  into  the  hands  of  the  bankrupt  himself,  but 
be  deposited  to  the  account  of  the  estate,  or  paid  into  court.  Ex  parte  Brooks,  Cooke, 
137 ;  Ex  parte  Leeke,  2  Bro.  Ch.  596.  In  this  case,  and  on  this  point,  the  Lord  Chan- 
cellor said  :  "  I  apprehend,  in  strictness,  the  bankrupt  ought  to  be  admitted  a  creditor 
for  that  whicli  he  has,  as  executor,  against  his  own  estate  ;  but  it  would  be  evidently 
improper  to  suffer  the  money  to  come  into  the  hands  of  the  bankrupt.     In  the  present 


en.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  28l> 

Debts  not  yet  payable  can  be  proved.'  If  they  become  due  be- 
fore a  dividend,  there  is  no  deduction  from  them.  If  not,  interest 
is  deducted.  In  general,  in  order  to  equalize  the  claims,  inter- 
est is  cast  upon  all  the  claims  proved  to  a  certain  day;  and  if  a 
debt  is  then  paid,  in  whole  or  in  part,  interest  must  be  deducted 
to  put  it  on  an  equal  claim  with  others.  If  interest  is  cast  for 
many  years,  compound  interest  is  never  allowed  as  such.  But 
we  presume  that  an  account  would  be  cast  by  commissioners  of 
insolvency  with  annual  rests,  if  it  were  one  which  could  be  so 
calculated  in  a  suit  against  the  insolvent.^ 

So,  persons  holding  annuities  payable  by  the  bankrupt,  have 
been  permitted  to  come  in,  and  have  the  value  of  the  whole  an- 
nuity reduced  by  computation  to  a  single  sum,  and  present  and 
prove  that  as  a  debt.^  In  several  instances,  a  wife  has  been  per- 
mitted to  prove  debts  against  her  husband's  estate.  As,  where  she 
held  a  bond  or  other  legal  instrument  from  him,  payable  at  his 
death.  Or,  if  there  were  a  settlement  made  upon  her  before  mar- 
riage, and  a  sum  due  to  her  from  her  husband's  estate  under  that 
settlement;  and  a  settlement  made  after  marriage,  in  good  faith, 
and  before  the  husband  became,  or  expected  to  be,  insolvent, 
would  have  the  same  effect.'^ 

The  assignees,  who  for  many  purposes  represent  the  bankrupt, 


case,  there  is  nothing  but  money  in  the  liands  of  the  assignees,  and  the  creditor  has 
such  an  interest  in  it  as  to  entitle  him  to  have  it  retained  in  court.  See  also  Ex  parte 
Llewellyn,  Cooke,  B.  L.  152;  Ex  parte  Ellis,  1  Atk.  101 ;  Ex  parte  Shakeshaft,  3  Bro. 
Ch.  198;  Ex  parte  Moody,  2  Eose,  413. 

1  Parslow  V.  Dearlove',  4  East,  438  ;  The  leading  case  of  Utterson  v.  Vernon,  4  T. 
E.  570;  Ex  parte  King,  8  Ves.  334;  Ex  parte  Marc,  id.  335;  Hancock  v.  Entwisle,  3 
T.  E.  435;  Ex  parte  Grome,  1  Atk.  115;  Ex  parte  Winchester,  id.  116;  Hammond  v. 
Toulman,  7  T.  R.  612;  Ex  parte  Minet,  14  Ves.  189. 

■^  See  the  preceding  chapter  on  Interest. 

3  Ex  parte  Le  Compte,  I  Atk.  251 ;  Ex  parte  Belton,  id.  251  ;  2  W.  Black.  1106 ; 
Perkins  v.  Kcmpland  ;  Wyllie  v.  Wilkes,  Uougl.  519  ;  Cooke's  Bankrupt  Law,  138. 

*  Tims  it  is  said,  that  if  a  bond  or  covenant  is  given  by  the  husband,  to  pay  the  -wife 
or  her  trustees  during  his  life,  a  sum  of  money  for  the  benefit  of  the  wife  or  issue  after 
his  death,  such  a  bond  may  be  proved  in  bankruptcy  against  his  estate.  Ex  parte 
Winchester,  1  Atk.  116;  Ex  parte  Dickon,  Buck.  115;  Ex  parte  Campbell,  16  Ves. 
244  ;  Ex  parte  Gardner,  11  Ves.  40  ;  Ex  parte  Brown,  Cooke,  240  ;  Ex  parte  Granger, 
10  Ves.  349  ;  Montefiori  v.  Montefiori,  1  W.  Bl.  363  ;  Shaw  v.  Jakeman,  4  East,  201. 
See  also  Ex  parte  Smith,  Cooke,  238;  Brandon  v.  Brandon,  2  Wils.  Ch.  14;  Ex 
parte  Elder,  2  Haddock,  282 ;  Ex  parte  Brenchley,  2  Glynn  &  J.  174.  But  it  is  said 
that  a  bond  given  by  the  husband  to  pay  money  for  the  use  of  the  wife,  with  a  condi- 
tion by  way  of  defeasance,  that  tlie  bond  sliall  not  be  enforced,  unless  upon  the  bank- 
ruptcy of  the  obligor,  will  be  void  as  a  fraud  upon  the  creditors  of  the  husband,  and 
cannot  be  proved  against  his  estate.  Lockyer  v.  Savage,  2  Stra.  947  ;  Higinbotham 
V.  Holme,  19  Ves.  88;  Stratton  v.  Hale,  2  Bro.  Ch.  490;  Ex  parte  Hodgson,  19 
Ves.  206  ;  Ex  parte  Young,  3  Maddock,  124 ;  J^.r  parte  Hill,  Cooke,  251  ;  Id.  Ex  parte 
Bennett. 

25 


290  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XV. 

or  insolvent,  may  make  any  defence  to  a  claim  which  he  could 
make.     Hence,  a  debt  for  gaming,  or  one  ojien  to  objection  as 
usurious,  or  one  without  consideration,  may  be  repelled.^     So, 
also,  the  assignees  may  make  some  defences  which  the  bankrupt 
could  not  make.     As,  if  one  presented  a  claim  for  damages  for  a 
tort,  this  may  be  rejected  ;  at  least,  a  claim  for  damages  for  a  per- 
sonal tort,  may  always  be ;  and  the  reason  seems  to  be,  that  the 
insolvent  would  not  pay  them  if  they  were  recovered,  but  that 
his  other  creditors  would.    This,  however,  is  equally  true  of  every 
other  claim  or  debt,  if  the  whole  fund  belongs  to  all  the  creditors, 
and  cannot  pay  all  in  full.     The  true  distinction,  on  principle, 
seems  to  be  this : — that,  so  far  as  the  sum  recoverable  for  tort  is 
only  an  unliquidated  compensation  for  personal  harm,  to  be  as- 
certained by  a  jury,  and  savors  of  punishment  to  the  wrongdoer, 
the  claim  for  it  cannot  be  proved  as   a  debt.     But  when  judg- 
ment has  been  recovered  for  the  tort,  this  takes  the  place  of  the 
original  cause  of  action  ;  and  it  is  a  debt  which  can  be  proved 
like  any  other.^     In  some  of  the  statutes  it  is  expressly  provided, 
that  if  the  claim  be  for  goods  or  chattels  wrongfully  obtained  by 
the  debtor,  it  may  be  proved. 

If  the  claim  be  merely  contingent,  that  is,  if  it  is  to  be  valid 
and  fixed  if  a  certain  event  occur,  and  otherwise  not,  it  may  still 
be  proved, — and  not  like  an  annuity,  &c.,  by  reduction  to  its 
present  value,  but  at  its  full  value — the  payment  of  the  dividend 


1  See  the  cases  cited  infra,  to  the  pohit  that  the  assignees  take  subject  to  the  same 
equities  as  the  bankrupt,  and  are  entitled  to  the  same. 

^  In  Goodtitle  v.  North,  Dou;^.  584,  Lord  Mansfield  seemed  to  consider  the  chief  dis- 
tinction as  between  unliquidated  damages,  and  a  certain,  definite  amount,  as  would  be 
the  case  when  a  judgment  had  been  rendered.  The  case  was  an  action  of  trespass  for 
the  mesne  profits  against  several  defendants — plea  by  two  of  them  (husband  and  wife) 
— that  the  husband  became  a  bankrupt  after  the  cause  of  action  accrued.  To  this  there 
was  a  general  demurrer,  and  in  support  of  the  demurrer,  it  was  argued  that  the  statute 
only  speaks  of  debts  due  before  the  bankruptc)',  and  an  injury  by  entering  the  plain- 
tiflfs'  close  cannot  constitute  a  debt.  It  was  said  that  a  party  cannot,  in  any  case  of  a 
tort,  liquidate  his  damages,  and  swear  to  it  before  tlie  commissioners.  It  could  only 
be  ascertained  by  the  intervention  of  a  jury.  Therefore  no  debt  for  this  cause  of 
action  could  have  been  proved  ;  and  therefore  the  bankruptcy  was  no  bar.  In  reply, 
it  was  admitted  that  bankruptcy  is  no  bar  to  demands  for  torts  in  general.  But  it 
was  urged,  that  though  in  this  case  {Ixafoiin  of  the  action  was  trespass,  yet  the  demand, 
in  substance,  was  for  a  debt,  viz.,  the  annual  value  of  the  land,  and  might  have  been 
the  subject  of  an  action  for  use  and  occupation,  in  bar  to  which  the  bankruptcy  would 
be  clearly  pleadable.  Lord  Mansfield  said  :  "  The  form  of  the  action  is  decisive.  The 
plaintiff  goes  for  tlie  whole  damages  occasioned  by  the  tort,  and  when  damages  are  un- 
certain, they  cannot  be  proved  under  a  commission  of  bankruptcy."  And  Buller,  J., 
added :  "  The  damages  here  are  as  uncertain  as  in  an  action  of  assault."  Parker  v. 
Norton,  6  T.  E.  695  ;  Parker  v.  Crole,  5  Bing.  63;  S.  C  2  Moore  &  Payne,  150  ;  Shoe- 


I 


en.  XV.]  OP   BANKRUPTCY   AND   INSOLVENCY.  291 

depending,  however,  upon  the  happenhig  of  the  event  which  is 
to  make  the  claim  valid. ^ 

If  a  party  holds  a  note  which  the  bankrupt  has  indorsed,  or 
made  only  to  accommodate  the  holder,  as  there  is  no  considera- 
tion for  it,  it  cannot  be  proved.  And,  on  the  other  hand,  if  the 
bankrupt  holds  a  note  made  or  indorsed  to  him  without  considera- 
tion, and  for  accommodation  only,  this  note  would  not  pass  to 
the  assignee  as  part  of  the  bankrupt's  assets.^  We  should  apply 
the  same  principle  to  the  case  of  two  promissory  notes,  both  ac- 
commodation in  so  far  as  they  were  given  for  each  other,  that  is, 
exchanged  notes.  Here,  if  at  the  time  of  the  bankruptcy  neither 
party  had  used  his  note,  we  should  say,  that  each  should  be  re- 
turned, and  not  that  the  holder  of  the  bankrupt's  note  should 
take  his  dividend,  and  pay  the  whole  of  the  note  given  by  him 


maker  v.  Keelv.  2  Dall.  213;  S.  C.  1  Yeates,  245;  Williamson  u.  Dickens,  5  Ired. 
(Law)  259;  Comstock  v.  Grout,  17  Vt.  (2  Waslib.)  512. 

_  1  Trovision  for  contingent  debts  is  made  in  the  Statutes  of  Bankruptcy  and  Insol- 
vency, both  in  England  and  America.  A  distinction  was  taken  in  England  under  this 
provision,  between  debts  payable  on  a  contingency,  and  contingent  liabilities,  which 
might  never  become  debts,  and  it  was  held  that  only  the  former  could  be  proved  under 
the  statute.  Ex  parte  Marshall,  1  M.  &  Ayr.  145  ;  S.  C.  3  Dea.  &  Chit.  120;  Abbott 
V.  Hicks,  5  Bing.  N.  C.  578 ;  Hinton  v.  Acraman,  2  C.  B.  (M.  G.  &  S.)  367  ;  Ex  parte 
Harrison,  3  M.  D.  &  D.  350.  On  the  subject  of  proof  of  contingent  debts,  and  what 
are  provable  as  such,  see  Ex  parte  Marshall,  2  Dea.  &  Chit.  589  ;  S.  C.  1  M.  &  B.  242  ; 
Ex  parte  Tindal,  1  Moore  &  Scott,  607  ;  S.  C.  Mont.  375,  462 ;  8  Bing.  402 ;  Atwood 
V.  Partridge,  12  Moore,  431 ;  4  Bing.  209,  S.  C. ;  Boorman  v.  Nash,  9  B.  &  C.  145; 
Green  v.  liicknell,  8  Ad.  &  Ell.  701  ;  Ex  parte  Lancaster  Coal  Co.  Mont.  27  ;  Ex  parte 
Fairlee,  JMont.  17  ;  Ex  parte  Myers,  Mont.  &  B.  229  ;  S.  C.  2  Dea.  &  Ch.  251  ;  Abbott 
V.  Hicks,  7  Scott,  715  ;  Hope  v.  Booth,  1  B.  &  Ad.  498  ;  Ex  parte  Simpson,  1  M.  &  Ayr. 
541 ;  S.  C.  3  Dea.  &  Ch.  792.  Debt  defeasible  on  a  contingency  provable.  Staines  v. 
Planck,  8  T.  R.  389 ;  Yallop  v.  Ebers,  1  B.  &  Ad.  698 ;  Filbey  v.  Lawford,  4'  Scott, 
N.  R.  208;  Ex  parte  Eyre,  1  Phil.  C.  C  227;  Lane  v.  Burghart,  1  Q.  B.  (Ad.  & 
Ell.  N.  S.)  933,  4  Scott,  N.  R.  287  ;  3  M.  &  G.  597,  S.  C.  Ex  parte  Littlejohn,  3  M.  D. 
&  D.  182;  Ex  parte  Hope,  id.  720;  Taylor  v.  Young,  3  B.  &  Aid.  521 ;  Ex  parte 
Hooper.  3  Dea.  &  Ch.  655;  Ex  parte  Turpin,  1  Dea.  &  Ch.  120  ;  Lyde  v.  Mynn,  1 
Myl.  &  K.  683  ;  In  re  Willis,  19  L.  J.  Exch.  30  ;  In  re  Foster,  19  L.  J.  C  P.  274.  See 
1  Cooke's  Bankrupt  Law,  190  ;  Owen  on  Bankruptcy,  179  ;  Stat.  12  &  13  Vict.  c.  106, 
^§  77,  78  ;   Act  of  Congress,  1841,  §  5. 

2  It  seems  that  the  same  principles  will  govern  the  case  of  accommodation  paper, 
when  proof  of  it  is  attempted  against  a  bankrupt's  estate,  which  would  apply  if  suit  had 
been  brought  upon  it  against  the  bankrupt ;  and  the  same  reasons,  hold  when  the  bank- 
rupt has  given  accommodation  notes  or  acceptances.  It  is  clear  on  the  authorities, 
that  no  action  could  be  maintained  in  either  of  the  above  cases.  Smith  v.  Knox,  3 
Esp.  46;  Fentum  v.  Pocock,  5  Taunt.  192;  Thompson  v.  Shepherd,  12  Met.  311  ; 
Brown  v.  Mott,  7  Johns.  361  ;  Grant  v.  Ellicott,  7  Wend.  227  ;  Charles  v.  Marsden,  1 
Taunt.  224;  Carrutliers  v.  West,  11  Q.  B.  (Ad.  &  Ell.  N.  S.)  143;  Renwick  v.  Wil- 
liams, 2  Maryl.  356 ;  IMolson  v.  Hawlcy,  1  Blatch.  409.  If  the  accommodation  bill  is 
in  the  hands'of  a  third  party,  who  took  it  bona  fide,  even  with  notice  of  its  being  an 
accommodation  bill,  he  may  prove  against  the  estate  of  cither  party  to  it,  and  recover 
a  dividend  on  it  to  the  amount  due  him.  Smith  v.  Knox,  above  cited,  and  5  Taunt. 
192;  Ex  parte  Bloxham,  6  Ves.  449,  600;  Ex  parte  Bloxham,  8  Ves.  531 ;  Bank  of 
Ireland  v.  Beresford,  3  Dowl.  238  ;  Ex  parte  King,  Cooke,  111 ;  Ex  parte  Lee,  1  P.  Wms. 
782.     Sec  Jones  v.  Hibbert,  2  Stark.  304. 


292  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XV. 

to  the  bankrupt.'  Each  note  was  a  good  legal  consideration  for 
the  other;  but  the  principle  of  accommodation  paper  should 
apply  to  both.  If,  however,  either  of  the  notes  had  been  used 
and  transferred  to  a  third  party,  this  principle  would  no  longer  be 
applicable. 

At  common  law,  if  one  guarantees  a  debt  for  another,  in  any 
form,  as  a  surety,  or  as  an  indorser,  he  has  no  legal  claim  against 
that  other  until  he  pays  the  debt.  Therefore  he  cannot,  before 
such  payment,  compel  the  party  for  whom  he  is  surety,  to  give 
him  security  or  indemnity;  all  he  can  do  is,  to  pay  the  debt,  and 
then  bring  his  action  for  damages.  It  is  not  so,  however,  under 
the  bankrupt  or  insolvency  law.  Here,  the  fact  of  the  debtor's 
insolvency  carries  with  it  the  inference  that  the  surety  will  have 
to  pay  the  debt  he  has  guaranteed.  The  surety  is,  therefore,  per- 
mitted to  come  in  and  prove  as  his  claim  the  whole  amount  for 
which  he  is  surety.  But  it  is  in  the  nature  of  a  contingent  claim. 
And  no  dividend  is  paid  to  him  excepting  on  the  sum  which  he 
has  actually  paid  under  his  obligation  as  surety .^ 


1  See  with  reference  to  this  point,  Ex  parte  Walker,  4  Ves.  373 ;  Ex  parte  Earle,  5 
Ves.  833  ;  Ex  parte  Eeacl,  1  Glynn  &  J.  224  ;  Ex  parte  Bloxham,  above  cited  ;  Stedman 
V.  Martinnant,  13  East,  427.  "A  similar  principle  is  adopted  with  regard  to  mutual 
credits — the  object  in  view  being,  that  when  two  persons  have  dealt  together  on  mutual 
credits,  and  one  of  them  becomes  bankrupt,  the  account  shall  be  settled  between  them, 
and  the  balance  only,  payable  on  either  side,  shall  be  claimed  or  paid ;  and  this  was 
the  practice  long  before  any  statutory  provision  on  the  subject.  Anonymous,  1  Mod. 
215;  Chapman  v.  Derby,  2  Vern.  117;  Tinclal,  C.  J.,  in  Gibson  v.  Bell,  1  Bing.  N.  C. 
753;  Bolland  v.  Nash,  8  B.  &  C.  105  ;  Boyd  v.  Mangles,  16  M.  &  W.  337;  Hewison 
V.  Guthrie,  3  Scott,  298  ;  Ilussell  v.  Bell,  1  Dowl.  N.  S.  107  ;  Hulme  v.  Mugglestone, 
3  M.  &  W.  30 ;  Yoimg  v.  Bank  of  Bengal,  1  Deac.  622  ;  Rose  v.  Hart,  8  Taunt.  499. 
See  the  learned  note  on  this  case,  2  Smith's  L.  C.  172,  wherein  the  cases  upon  this 
point  are  collected  and  discussed.  Rose  ?;.  Sims,  1  B.  &  Ad.  521  ;  Abbott  v.  Hicks,  7 
Scott,  715;  Groom  r.  West,  8  Ad.  &  Ell.  758;  Tamplin  v.  Diggins,  2  Camp.  312; 
Ridout  V.  Brough,  Cowp.  133.  The  debts  must  be  due  in  the  same  riglit.  Forster  u. 
Wilson,  12  M.  &  W.  191  ;  Ex  parte  Blagdcn,  2  Rose,  249  ;  Yates  v.  Sherrington,  1 1  M. 
&  W.  42  ;  12  id.  855  ;  Belcher  v.  Lloyd,"  10  Bing.  310. 

2  Vansaudan  v.  Corsbie,  3  B- &  Aid.  13;  Young  v.  Taylor,  2  Moore,  326;  S.  C.  8 
Taunt.  315.  It  is  said,  in  1  Cooke's  Bankrupt  Law,  210,  that  "the  surety  is  held  to 
have  an  equitable  right  to  stand  in  tlie  place  of  the  original  creditor,  and  receive  divi- 
dends upon  his  proof."  Ex  joarfe  Findon  Cooke,  170;  Ex  parfe  Brown,  id.  (cited  in 
Owen  on  Bankruptcy,  180) ;  Toussaint  v.  Martinnant,  2  T.  R.  100;  Martin  v.  Breck- 
nell,  2  M.  &  Selwyn,  39.  It  seems  that  in  England,  prior  to  the  statute  of  49  Geo.  3, 
c.  121,  §  8,  the  surety  had  no  power  to  come  in  and  prove  his  claim  against  the  estate 
of  his  bankrupt  principal,  before  being  called  on  himself  to  pay  the  debt.  See  Cooke's 
Banki-upt  Law,  above  cited,  and  passim;  Eden  on  Bankruptcy,  158-177,  and  the  cases 
cited  above,  of  an  earlier  date  than  1808.  But  the  provision  then  enacted  has  been  con- 
tinued to  this  day,  and  may  be  considered  part  of  the  common  law  of  bankruptcy  in 
this  country.  Ex  parte  Young,  in  the  matter  of  Slaney,  2  Rose  Cases,  40 ;  Aflalo  v. 
Eourdrinier,  6  Bing.  306 ;  Wood  v.  Dodgson,  2  Maule  &  S.  195.  Bayleij,  J.,  in  deliv- 
ering his  opinion,  said,  with  reference  to  this  point :  "  The  intention  of  the  legislature, 
at  the  same  time  that  they  relieved  the  bankrupt,  was  to  confer  a  benefit  also  on  the 


CII.  XV.]  OP   BANKRUrTCY   AND   INSOLVENCY.  293 

Tliere  is,  however,  a  limitation  to  this  right  of  the  surety.  He 
can  prove  his  claim  only  when  the  debt  already  exists,  although 
it  may  not  now  be  payable.  Thus,  a  surety  for  rent  may  prove 
for  the  rent  due  and  unpaid,  but  not  for  any  future  rent.  For 
this  may  never  become  due ;  as  the  tenant  may  be  ousted,  or 
something  else  occur  to  defeat  the  claim  for  rent.i 

There  seems  to  be  no  way  in  which  a  surety  may  compel  the 


surety  or  person  wlio  wai5  liublc  for  the  debt  of  the  bankrupt.  The  jirincipal  creditor 
might  liave  iirovcd  u:uler  tlic  comniission,  or  miglit  have  resorted  to  the  surety  without 
proving  under  the  commission  ;  therefore,  before  the  act,  he  might  have  compelled  the 
surety  to  pay  tiic  whole  amount  without  the  surety's  having  any  benefit  under  the  com- 
mission. This  clause,  therefore,  Avas  intended  to"  remove  that  inconvenience,  and  to 
give  to  the  surety  the  power  of  obtaining  a  dividend  in  respect  of  his  debt."  The  Su- 
preme Court  of  the  United  States,  in  the  construction  of  the  similar  section  of  the  late 
national  bankrupt  law,  unhesitatingly  adopted  the  same  view.  Mr.  Justice  McLean, 
delivering  the  opinion  of  the  court,  said  :  "  Wells,  as  surety,  was  within  this  section, 
and  might  have  jiroved  his  demand  against  the  bankrupt.  lie  had  not  paid  the  last 
note,  but  he  was  liable  to  pay  it  as  surety,  and  that  gave  him  a  right  to  prove  the  claim 
under  the  fifth  section.  And  the  fourth  section  declares  that  from  all  such  demands 
the  bankrupt  shall  be  discharged.  This  is  the  whole  case.  It  seems  to  be  clear  of 
doubt.  The  judgment  of  the  State  court  is  reversed."  Mace  v.  Wells,  7  How.  272. 
(The  judgment  of  the  Supreme  Court  of  Vermont  in  this  case  will  be  found  ;  AVells  v. 
Mace,'l7  Vt.  [2  Washb.]  503.)  The  view  of  the  later  English  cases,  and  of  the  Su- 
preme Court  of  the  United  States,  will  be  found  adopted  in  Morse  v.  Hovey,  1  Sandf. 
Ch.  187;  Butcher  v.  Forman,  6  Hill,  583;  Crafts  r.  Mott,  4  Comstock,  G03,  decided  as 
late  as  1851;  Dunn  v.  Sparks,  1  Carter,  (Ind.)  397;  and  recognized  in  Holbrook  v. 
Foss,  27  Maine,  441 ;  Pike  v.  McDonald,  32  id.  418  ;  Leighton  v.  Atkins,  35  id.  118. 
These  were  cases  where  the  foundation  of  the  plaintiffs'  claims  was  payment  of  certain 
judgments  recovered  against  the  defendants  and  their  sureties  (of  which  number  were 
the  plaintiffs)  after  the  discharge  of  the  defendants,  which  judgments,  therefore,  were 
not  provable  in  bankruptcy.  The  distinction  taken  by  the  court,  admitting  the  author- 
ity of  I\Iacc  V.  AVells,  &c.,  was,  as  laid  down  by  Shepley,  J.,  in  one  of  the  cases,  that  the 
contract  upon  which  a  judgment  at  law  has  been  recovered,  is  merged  in  and  extin- 
guished by  the  judgment  which  constitutes  a  new  debt,  having  its  first  existence  at  the 
time  of  its  recovery.  So  that,  where  a  judgment  had  been  recovered  on  a  promissory 
note,  (27  Me.  441,)  the  note,  by  virtue  of  which  it  had  been  recovered,  no  longer  con- 
tinued to  be  a  debt  due  from  the  defendant  to  the  plaintiff.  The  judgment  not  being  a 
debt  due  from  the  defendant  at  the  time  when  his  petition  was  filed,  could  not  have 
been  proved  in  bankruptcy  against  him.    Comfort  v.  Eisenbeis,  11  Penn.  State,  13. 

1  The  cases  cited  in  the  preceding  note.  Also,  Welsh  v.  Welsh,  4  Maule  &  S.  333. 
In  M'Dougal  v.  Paton,  8  Taunt.  584,  this  precise  question  came  before  the  court.  It 
was  an  action  of  assumpsit  for  money  paid ;  the  defendant  pleaded  his  bankruptcy  and 
certificate,  and  that  the  plaintiff,  before  the  issuing  of  the  commission,  was  surety  for 
the  defendant's  debt,  and  that  the  money  paid  was  paid  by  the  plaintiff,  as  his  surety, 
after  the  issuing  of  the  commission,  and  before  a  final  dividend.  Kcplication  that  the 
plaintiff,  before  issuing  the  commission,  was  surety  to  J.  for  the  defendant,  that  the  de- 
fendant should  perform  articles  of  agreement  by  which  an  annual  rent  was  to  be  paid  . 
by  the  defendant;  that,  after  his  bankruptcy,  rent  became  due  by  the  defendant,  and 
that  the  money  was  paid  by  the  plaintiff,  as  the  defendant's  surety,  by  reason  of  the 
defendant's  non-payment,  and  for  the  costs  of  an  action  by  J.  against  the  plaintiff,  as 
surety.  Demurrer :  and  Pell,  Sergt.,  argued  that  this  was  a  debt  within  49  Geo.  3, 
c.  121.  Dallas,  C.  J.,  said  :  "  We  will  consider  this  case.  For  myself,  I  have  no  doubt 
that  a  debt,  to  fall  within  the  statute,  must  be  a  debt  existing  at  the  time  of  the  com- 
mission. But  though  to  me  the  case  is  clear,  I  have  no  objection  to  the  case  standing 
over  for  a  further  consideration  of  the  authorities  by  the  court."  At  a  later  day,  Dallas, 
C.  J.,  informed  Pell  that  the  court  saw  no  reason  to  change  the  opinion  they  had  ex- 
pressed in  this  case.     S.  C.  2  Moore,  C44.     Sec  Ex  parte  Minet,  14  Ves.  189. 

25* 


294  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 

party  whom  he  guarantees,  to  prove  his  claim  and  take  his  divi- 
dend from  the  assets  of  the  debtor.^  This  would,  of  course, 
diminish  the  liability  of  the  surety  just  so  far;  and  the  surety 
ought  to  have  the  power  of  requiring  this.  In  practice,  a  surety 
can  only  pay  the  debt,  whether  due  or  not,  and  is  then  subro- 
gated to  all  the  rights  of  the  principal  creditor.^  This  prevents, 
probably,  any  practical  mischief.  And  if  the  creditor,  relying  on 
his  surety,  and  at  tlie  same  wishing  to  distress  his  surety,  refused 
the  payment  tendered  to  him,  and  also  refused  to  prove  his  debt, 
undoubtedly  such  conduct  would  be  considered  as  a  negligence 
or  fraud,  which  would  discharge  the  surety.  For,  to  all  surety- 
ship there  must  be  attached  the  general  condition  that  the  cred- 
itor shall  do  all  that  can  reasonably  be  asked  of  him  to  secure 
the  debt  from  the  principal,  or  permit  the  surety  to  do  it. 


SECTION   VI. 

OF   CREDITORS   WITH   SECURITY. 

A  creditor  who  holds  security  as  collateral  to  his  debt,  may 
prove  the  balance  due  to  him,  after  deducting  the  value  of  the 
security.  This  value  may  be  ascertained  by  the  creditors'  selling 
it,  or,  under  our  bankrupt  law,  by  having  it  appraised,  and  taking 
it  at  its  appraised  value.  In  general,  if  he  has  any  liens  what- 
ever for  his  debt,  he  must  make  them  reduce  his  debt  as  far  as 
possible,  or  otherwise  make  them  available  to  the  assets,  as  by 
surrendering  them  to  the  assignees.^ 

Our  act  of  1841,  section  2,  expressly  provided  that  it  should  in 
no  wise  impair  "  any  liens,  mortgages  or  other  securities  on  prop- 
erty real  or  personal  which  might  be  valid  by  the  laws  of  the 
States  respectively.  This  clause  was  necessary,  not  only  for 
other  reasons,  but  because  of  the  great  diversity  in  our  state  laws 

1  See  Owen  on  Bankruptcy,  182. 

'^  Tlie  cases  cited  supi-a. 

3  This  matter  is  usually  provided  for  by  statute.  The  English  bankrupt  law,  12  & 
13  Vict.,  and  the  late  national  bankrupt  law  of  the  United  States,  have  provisions  to 
this  general  effect.  Act  of  Congress,  1841 ;  Owen  on  Bankruptcy,  193.  English  cases 
on  this  subject:  E.r-  parte  Prescott,  3  Dea.  &  Ch.  218  ;  Ex  parte  Rufford,  1  Glynn  &  J. 
41 ;  Ex  parte  Dickson,  2  M.  &  Ayr.  99  ;  Ward  v.  Dalton,  7  C.  B.  (M.  G.  &  S.)  643 ; 
and  Ex  parte  Goodman,  3  Madd.  373;  Ex  parte  Parr,  1  Rose,  76,  18  Vcs.  Jr.  65  ;  Ex 
parte  De  Tasted,  1  Rose,  324;  Ex  parte  Wildman,  1  Atk.  109;  Ex  parte  Bennet,  2 
Atk.  527. 


ClI.  XV.]  OF   BANKllUPTCY   AND   INSOLVENCY.  295 

as  to  liens.  In  some,  an  action  commenced,  seems  to  operate  as 
a  lien  on  the  defendant's  property.'  In  others  there  is  no  lien 
until  the  property  is  attached  ;  and  this  is  regulated  in  many 
different  ways;  in  some,  for  example,  being  permitted  on  mesne 
process,  and  in  others  not.^  Judge  Story  even  held  that  an  at- 
tachment on  real  estate,  at  the  commencement  of  the  suit,  in  a 
State  in  which  it  was  permitted  bylaw,  and  every  day's  practice, 
and  had  been  always  spoken  of  by  the  courts  as  a  "  lien,"  was 
nevertheless  none  under  the  bankrupt  law,  and  that  such  attach- 
ment was  superseded  and  avoided  by  that  law.  He  however 
conceded  that  a  lien  by  a  judgment  was  recognized  by  the  stat- 
ute and  valid  against  it.-^  The  same  or  a  similar  question  corn- 
ing before  other  judges  of  the  United  States  courts  was  decided 
in  different  ways.  It  afterwards  came  up  before  the  Supreme 
Court  of  New  Hampshire,  which  —  Chief  Justice  Parker  deliver- 
ing the  opinion  —  elaborately  and  fully  sustained  the  doctrine 
that  such  attachment  was  a  lien,  to  be  respected  by  the  bankrupt 
law.  And  so  far  as  subsequent  adjudication  instructs  us,  we  are 
satisfied  that  the  New  Hampshire  view  is  adopted  not  only  by 
the  state  courts,  but,  substantially,  by  those  of  the  United  States.* 


1  "Watson  V.  Wilson,  2  Dana,  406;  Ncwdigate  v.  Lee,  9  Dana,  17;  Eobertson  v. 
Stewart,  2  B.  Mun.  321.     See  Hodges  v.  Ilolcman,  1  Dana,  50. 

-  Wliccler  ?-.  Fisk,  3  Fairf.  241  ;  Robinson  v.  Mansfield,  13  Pick.  139 ;  Pomroy  v. 
Kingsley,  1  Tyler,  294  ;  Carter  v.  Champion,  8  Conn.  549  ;  Dunklee  v.  Tales,  5  N.  H. 
528';  Kittredge  v.  Bellows,  7  id.  427;  Fettyplaee  w.  Dutch,  13  Pick.  392;  Arnold  z;. 
Brown,  24  Pick.  95  ;  Grosvenor  v.  Gold,  9  Mass.  210. 

3  In  the  matter  of  Cook,  2  Story,  380.  "I  have  never  doubted  that  the  lien  of  a  judg- 
ment at  the  common  law  upon  real  estate  since  the  Statute  of  Westminster,  13  Edward 
1,  Stat.  1,  c.  18,  which  has  been  adopted  in  many  States  in  the  Union,  is  within  the 
proviso  of  the  second  section  of  the  Bankrupt  Act  of  1841,  and  saved  thereby,  and  is 
wholly  unaffected  by  the  proceedings  in  bankruptcy,  when  it  has  been  obtained  in  tlie 
regular  course,  before  any  petition  or  decree,  or  discharge  in  bankruptcy.  See  to  the 
point,  that  a  judgment  is  a  lien  on  the  property  of  a  defendant.  Conard  v.  Atlantic 
Ins.  Co.  I  Pet.  386  ;  Cathcart  v.  Potterfield,  5  Watts,  163  ;  Van  Renssalaer  v.  Sheriff 
of  Albany,  1  Cow.  501  ;  Ridge  v.  Prathcr,  1  Blackf.  401  ;  United  States  v.  Morrison, 
4  Pet.  124  ;  Porter  v.  Cocke,"Peck.  30  ;  Molicre  v.  Noe,  4  Dall.  450  ;  Kerpcr  v.  Hoch, 
1  Watts,  9  ;  Codwise  v.  Gelston,  10  Johns.  507  ;  Coutts  v.  Walker,  2  Leigh,  268;  Mut. 
Assurance  Soc.  v.  Stanard,  4  Munf.  539  ;  Roads  v.  Symmes,  1  Ham.  140  ;  Towner  v. 
Wells,  8  id.  136  ;  Talbcrt  v.  Melton,  9  Sm.  &  M.  9  ;  Buckingham  v.  McLean,  13  How. 
151 ;  Pollard  v.  Cocke,  19  Ala.  188  ;  Byers  v.  Fowler,  7  Eng.  (Ark.)  218. 

*  Tlic  cases  upon  this  conflict  of  laws,  with  regard  to  the  effect  of  an  attachment  in 
creating  a  lien,  are  cited  in  this  note.  They  are  more  fully  considered  in  the  notes  to 
the,  chapter  on  Bankruptcy  and  Insolvency,  in  tlic  2nd  vol.  of  Parsons  on  Contracts. 
The  principal  conflict  arose  between  the  Circuit  Court  of  the  United  States  for  the  first 
circuit,  and  the  Superior  Court  of  Judicature  in  Now  Hampshire.  The  doctrine  which 
is  referred  to  in  the  text  as  emanating  from  Judge  Story,  was  first  laid  down  in  the 
case  of  E.r  parte  Foster,  2  Story,  131,5  Law  Reporter,  55,  S.  C  This  case  was  cited  and 
considered  in  Kittredge  v.  Warren,  14  N.  H.  509  ;  and  an  opposite  opinion  on  this 
point  was  adopted  by  the  court.    It  was  held  that  an  attachment  of  property  upon 


296  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 


SECTION  VII. 
OF    THE   ASSIGNEE. 

The  assignee  is  usually  selected  or  chosen  by  the  creditors,  at 
their  first  meeting;  a  majority  in  value  of  the  creditors  choosing, 
with  some  restrictions,  that  such  a  number  must  concur  in  the 
choice,  in  order  to  prevent  one  or  two  very  large  creditors  from 
deciding  the  question.  If  the  creditors  fail,  or  decline,  to  choose, 
usually  the  judge  or  commissioner  presiding  may  appoint.  The 
assignee,  or  assignees,  thus  chosen,  must  signify  their  assent 
within  a  certain  time,  which  is  usually,  a  short  one.^ 

mesne  process,  hondjide  made  before  any  act  of  bankruptcy  was  a  lien  or  security  upon 
property,  valid  by  the  laws  of  New  Hampshire,  and  within  the  proviso  of  the  second 
section  of  the  bankrupt  act.  In  tlie  matter  of  Bellows  v.  Peck,  5  Law  Eeportcr,  119, 
this  matter  came  again  before  the  Circuit  Court,  Judge  Story  presiding,  and  tlie  au- 
thorities and  especially  Kittredge  v.  Warren,  considered  at  length.  The  opinion  of 
the  court  in  Ex  parte  Foster,  was  reaffirmed,  and  going  further,  it  was  held,  that  where 
an  attachment  on  mesne  process  was  made,  and  the  defendant  subsequently  obtained 
his  discharge  in  bankruptcy,  and  a  state  court  where  the  case  was  pending  should,  as 
in  Kittredge  and  Warren,  hold  that  the  attachment  prevailed  as  against  the  subse- 
quent proceedings ;  and  tlie  discharge  invalid  as  against  creditors  who  had  secured 
their  rights  by  such  attachment ;  it  would  be  the  duty  of  the  District  Court  to  grant  an 
injunction  against  the  creditor,  his  agent  and  attorneys,  and  the  sheriif  who  had  charge 
of  the  property  attached,  to  restrain  the  creditor  from  proceeding  to  judgment,  or  if  the 
suit  had  been  prosecuted  to  judgment,  to  restrain  him  from  levying  his  execution  on 
the  property  attached,  or  if  tlic  property  had  been  sold  under  the  execution,  to  compel 
the  sherilT  to  bring  the  money  into  court.  In  Kittredge  v.  Emerson,  15  N.  H.  227, 
which  came  before  the  court  of  New  Hampshire  subsequent  to  the  decision  in  Bellows 
V.  Peck,  the  doctrines  of  that  case  were  assailed,  and  that  of  Kittredge  v.  Warren, 
affirmed,  with  conspicuous  ability,  by  Mr.  Chief  Justice  Parker,  in  an  opinion  of  great 
length,  in  which  the  cases  are  reviewed,  both  with  regard  to  the  matter  of  attachment, 
and  the  power  of  the  courts  of  the  United  States  to  grant  injunctions  to  restrain  plain- 
tiff's in  the  state  courts  from  pursuing  their  rights  and  remedies  in  those  tribunals. 
And  denying  this  power,  and  in  order  to  be  clearly  understood,  the  court  say  that  if 
such  plaintiifs  shall  ask  their  interference,  it  will  be  their  duty  to  enjoin  and  prohibit 
any  person  from  attempting  to  procure  any  process,  from  any  court  not  acting  under 
the  authority  of  the  State  of  New  Hampshire,  with  a  view  to  prevent  the  entry  of  judg- 
ments in  such  suits,  or  to  prevent  the  execution  of  the  final  process  issued  upon  those 
judgments,  when 'obtained.  This  matter  is  considered  also  by  Prentiss,  J.,  in  the  Dis- 
trict Court  of  Vermont.  Downer  v.  Brackett,  .5  Law  Reporter,  392,  where  a  view  is 
adopted  like  that  of  the  court  of  New  Hampshire  above  cited.  Houghton  v.  Eustis, 
5  Law  R.  505.  The  view  adopted  by  Mr.  Justice  Story  was  concurred  in  by  Conk- 
ling,  J.  In  the  matter  of  Allen,  5  Law  Reporter,  362.  The  following  cases  are  cited 
in  verification  of  the  last  paragi'aph  of  the  text  on  this  subject.  Tyrell's  Heirs  v. 
Rountree,  1  M'Lean,  95 ;  S.  C.  in  Error,  7  Peters,  464  ;  Wallace  v.  M'Connell,  13  Pet. 
151  ;  Beaston  v.  Farmers'  Bank  of  Delaware,  12  Pet.  128;  Savage  v.  Best,  3  Ebw. 
Ill;  Peck  v.  Jenness,  7  How.  612;  Colby  u.  Ledden,  id.  626;  Shawhan  v.  Wherritt, 
id.  627;  Downer  n.  Brackett,  21  Vt.  599 ;  Shaff'er  w.  McMakin,  1  Smith,  148;  S.  C. 
1  Carter,  (Ind.)  274 ;  Langford  v.  Raiford,  20  Ala.  532  ;  Kilborn  v.  Lyman,  6  Met.  299; 
Hubbard  v.  Hamilton  Bank,  7  Met.  340;  Davenport  v.  Tilton,  10  Met.  320. 

1  But  by  the  provisions  of  some  of  the  bankrupt  and  insolvent  laws,  the  power  of 
appointment  is  vested  in  the  court.     See  §  3  of  the  late  National  Law.    And  where 


CII.  XV.]  OF  BANKRUPTCY   AND   INSOLVENCY.  297 

It  is  his  duty  to  act  as  a  faithful  trustee  for  all  concerned  ;  and 

such  power  is  vested  in  tlie  court,  no  person  will  ordinarily  bo  appointed  who  is  inter- 
ested in  the  bankrupt  estate.  Nor  any  person  who  has  an  interest  hostile  to  that  of  the 
creditors.  E.c  parte  Uc  Tasted,  1  l\ose,  ^24;  AV  ])arte  Surtces,  12  Ves.  Jr.  10.  And 
if  accidentally  a  large  projiortion  of  the  creditors  have  been  absent  at  the  choice  of  the 
assignee,  a  new  choice  may  be  ordered.  Ex  parte  Grcignier,  1  Atk.  91 ;  Ex  parte 
Hawkins,  Buck.  520  ;  Ex  parte  Dechapeaurouge,  1  ^l.  &  McA.  174  ;  Ex  parte  Edwards, 
Buck,  411.  And  if  after  choice  made,  the  commissioner  should  decide  that  the  person 
chosen  is  for  any  reason  unfit  for  tiic  discharge  of  the  duties,  and  refuse  to  admit  him 
to  the  care  of  the  estate,  an  appeal  lies  to  the  Supreme  Court  of  bankruptcy.  Ex  parte 
Candy,  1  AI.  &  McA.  197.  And  the  court  also  iu  general  has  power  to  remove  an 
assignee  who  proves  incompetent  from  any  reason,  to  discharge  his  ofhcc ;  or  if  there 
has  been  a  fraud  in  procuring  the  appointment.  In  Ex  parte  Shaw,  1  Glynn  &  J.  157, 
Lord  Eldon  said  :  "Assignees  owe  a  duty  to  every  creditor,  and  each  creditor  owes  a 
duty  to  the  other  creditors.  Witli  respect  also  to  the  solicitors  under  the  commission, 
I  can  only  say,  that  it  sometimes  happens  that  the  best  men  arc  employed  for  parties 
having  adverse  interests,  yet  I  cannot  permit  ray  observations  to  be  closed,  without 
saying  that  it  is  the  duty  of  the  solicitor  employed  by  the  bankrupt,  if  he  find  that  he  is 
employed  by  the  assignees,  to  see  that  he  can  do  his  duty  to  every  creditor,  as  well  as 
to  the  bankrupt.  If  he  is  the  agent  of  all  he  must  do  his  duty  to  each  and  all  of  them, 
however  difficult  it  may  be  to  discharge  that  duty.  I  must  say,  that  I  never  saw  pro- 
ceedings in  any  bankruptcy  in  which  there  was  a  necessity  for  the  interference  of  the 
court  more  imperious  than  in  this,  for  whether  Carroll  can  or  cannot  prove  the  rest  of 
his  debt  (and  it  would  be  improper  in  me  to  express  an  opinion  on  that  part  of  the  sub- 
ject, even  if  I  had  formed  an  opinion  upon  the  merits  of  it),  yet  I  cannot  read  the  pro- 
ceedings without  observing,  that  the  case  calls  for  much  adverse  examination.  I  take 
into  consideration  all  the  other  circumstances  that  have  occurred,  and  without  saying 
whether  if  I  were  bound  to  decide  this  question  merely  upon  the  interposition  of  the 
bankrupt,  I  could  get  satisfactorily  to  the  conclusion  what  were  the  motives  which 
induced  the  nomination  of  these  parties  ;  after  a  laborious  research  into  the  evidence  I 
have  no  difficulty  in  stating,  that,  taking  the  case  altogether,  if  the  nomination  had 
been  carried  into  execution  by  assignment,  I  should  have  been  of  opinion  that  Carroll 
stands  under  circumstances,  in  which  he  should  not  be  assignee."  The  case  was,  a 
petition  to  remove  assignees  under  a  commission  of  bankruptcy,  and  to  charge  interest 
for  money,  part  of  the  bankrupt's  estate,  i-eeeived  by  one  of  the  assignees,  paid  in  at 
his  banker's,  to  his  own  account,  and  used  as  his  own  property.  The  Lord  Chancellor 
said:  "Under  these  circumstances,  therefore,  the  former  assignees  having  been  actu- 
ally discharged  for  this  very  reason,  using  money,  part  of  the  bankrupt's  estate,  as  their 
own,  the  new  assignees  chosen  in  execution  of  the  principle  respecting  such  use  of  the 
property,  no  substantial  reason  appearing  for  not  having  made  this  money  the  subject 
of  dividend,  being  taken  by  this  person,  one  of  the  new  assignees,  placed  by  him  at  his 
banker's,  used  as  his  own  money,  his  clerk  furnished  with  authority  to  draw  it  out,  as 
he  pleased,  and  actually  doing  so,  I  must,  by  enforcing  this  rule,  if  possible,  convince 
persons,  standing  in  the  situation  of  trustees,  as  assignees  in  bankruptcy,  that  they  are 
not  to  make  use  of  the  bankrupt's  estate  for  their  own  private  purposes.  Tor  that  rea- 
son alone  I  shall  direct  a  meeting  to  be  called  for  the  purpose  of  choosing  an  assignee 
instead  of  that  one,  who  has  made  this  use  of  the  property."  And  in  an  early  case, 
Ex  parte  Hal^day,  7  Vin.  Abr.  77,  where  the  commissioners  of  the  bankrupt's  estate  had 
charged  more  than  20s.  apiece  at  each  meeting,  and  likewise  ordered  great  snms  to  be 
charged  for  their  eating  and  drinking,  the  Lord  Chancellor  declared  them  incapable  of 
longer  holding  their  office.  Ex  parte  Eeynolds,  5  Vcs.  Jun.  707.  So  if  the  assignee 
remove  from  the  State  in  which  the  decree  issued,  or  beyond  the  jurisdiction  of  the 
court  by  which  the  decree  was  issued.  In  Ex  parte  Grey,  13  Ves.  274,  the  Lord  Chan- 
cellor said :  "  I  am  clearly  of  opinion  that  the  assignee  ought  to  be  removed.  He  is 
trustee  for  the  bankrupt  and  the  creditors.  Yet,  whilst  he  is  resident  in  Scotland,  I 
have  no  hold  over  him,  and  can  reach  him  with  no  process."  Belchicr  v.  Parsons,  1 
Kenyon  &  Hanmer,  44.  "  I  am  of  opinion  that  there  are  no  grounds  to  make  Mrs. 
Parsons  answerable  in  this  cause  for  any  more  of  the  money  than  what  she  actually 
received.  Were  it  once  to  be  laid  down,  as  a  rule  in  this  court,  that  an  assignee  or 
trustee,  should  be  answerable  in  all  events  for  the  people  they  employ,  no  man  in  his 
senses  would  ever  undertake  those  offices.  In  the  case  of  executors  and  administra- 
tors, the  common  law  does,  in  most  cases,  consider  the  persons  receiving  by  their  direc- 


298  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XV. 

with  impartial  justice  to  alU  It  would  be  impossible  to  enu- 
merate all  ills  duties.  The  principal  among  them  are,  to  ascer- 
tain the  regularity  and  sufliciency  of  the  proceedings  thus  far;  to 
take  immediate  possession  of  all  the  assets  of  the  insolvent,  and 
demand  and  take  any  necessary  steps  to  collect  all  outstanding 
assets  of  every  kind.^     And  he  must  take  due  care  of  the  prop- 

tious  only  as  the  liands  by  whieh  tlicy  receive ;  and  this  court  likewise,  to  preserve 
some  consistency  with  the  common  law,  does  confine  them  to  stricter  rules,  and  what 
is  a  devastavit  at  law,  must  be  so  here.  But  in  the  case  of  trustees  and  assignees 
particularly,  wlio  are  acting  immediately  under  the  authority  of  this  court,  it  has 
always  admitted  of  greater  latitude;  nay,  in  the  former  case,  this  court,  and  sometimes 
even  the  courts  of  law,  have  dispensed  with  that  rigor.  In  cases  of  this  kind,  it  is  not 
to  be  expected  that  the  assignees  will  themselves  attend  to  the  disposition  of  the  bank- 
rupt's efiects,  and  less  so  still  in  the  present  case,  for  the  son  of  the  person  whom  the 
creditors  have  thought  proper  to  clioosc  assignee;  nor  would  it  indeed  be  for  the  ben- 
efit of  the  creditors,  if  they  did;  brokers,  and  such  sort  of  people,  being  more  conver- 
sant with  the  effects  to  be  disposed  of,  better  judges  of  their  value,  and  more  capable  of 
disposing  of  them  to  advantage." 

1  And  the  duties  of  an  assignee  are  spoken  of  in  the  books  as  closely  resembling 
those  of  trustees.  Belchier  v.  Parsons,  1  Kenyon  &  Hanmer,  44  ;  Lord  Eldon  held, 
that  an  assignee  or  trustee  is  not  liable  for  accidental  losses  without  blamable  negli- 
gence. S.  C.  Ex  parte  Belchier,  Amb.  218;  Primrose  v.  Bromley,  1  Atk.  89;  Ex  parte 
Lane,  ib.  90.  And  if  the  assignee  appoint  an  agent,  he  must  exercise  the  care  that  is 
required  of  a  trustee  in  such  selection.  Belchier  r.  Parsons,  (above  cited) ;  1  Atk.  87. 
In  the  matter  of  the  Earl  of  Litchfield,  where  Lord  Hardwicke  held  an  assignee  liable 
for  loss  who  had  appointed  as  clerk  "  a  person  of  very  little  credit,"  and  "  did  not  con- 
sult the  body  of  the  creditors  who  are  his  cestui  que  trusts."  Knight  v.  Plimouth,  3 
Atk.  480;  Adams  v.  Claxton,  6  Ves.  Jun.  226.  And  the  same  doctrine  is  laid  down  by 
Tindal,  C.  J.,  in  Raw  v.  Cutten,  9  Bing.  96.  But  the  general  authority  of  assignees 
cannot  be  delegated.     Montagu's  Cases  in  Bankruptcy,  93 ;  Douglas  v.  Browne. 

*  And  to  enable  him  to  do  so  it  is  usually  provided,  that  the  clerk  or  other  officer  of  the 
coui't  of  bankruptcy  shall  on  the  day  of  the  issuing  of  the  decree,  deliver  to  the  assignee 
a  certified  copy  of  the  decree.  Late  U.  S.  National  Bankrupt  Law.  But  a  discretionary 
power  is  vested  in  the  assignee  in  this  respect,  and  any  property,  the  possession  of 
which  would  be  a  burden  rather  than  a  benefit  to  the  estate,  may  be  declined.  Nias  v. 
Adamson,  3  B.  &  Aid.  225 ;  Wheeler  v.  Bramah,  3  Camp.  340  ;  Turner  v.  Richardson, 
7  East,  335  ;  Copelaud  v.  Stephens,  1  B.  &  Aid.  593  ;  Bourdillon  v.  Dalton,  1  Esp.  233. 
In  Smith  v.  Gordon,  6  Law  Rep.  313,  Ware,  J.,  said:  "By  the  Bankrupt  Act  all  the 
property  and  rights  of  property  of  the  bankrupt,  by  force  of  the  decree  of  bankruptcy, 
pass  to  the  assignee  by  operation  of  law,  and  become  vested  in  him  as  soon  as  he  is 
appointed.  But  though  the  legal  title  passes,  he  is  not  bound  to  take  possession  of  all. 
It  is  perfectly  well  settled  with  respect  to  leasehold  estates,  under  the  Englisli  bankrupt 
laws,  that  the  assignee  is  not  bound  to  take  the  lease  and  charge  the  estate  with  the 
payment  of  rent.  Copcland  v.  Stephens,  (I  Barn.  &  Alderson,  573).  The  rent  may 
be  greater  than  the  value  of  the  lease,  and  thus  the  estate  may  be  burdened  instead  of 
being  benefited  by  taking  the  lease,  and  in  such  a  case  tlie  clamnosa  hercditas  may  be 
abandoned  by  the  assignee.  I  have  had  occasion  to  consider  this  question  in  another 
case,  and  I  came  to  the  conclusion  that  this  doctrine  equally  holds  under  our  bankrupt 
law.  Ex  parte  Whitman,  December,  1842.  And  I  take  tlic  principle  to  be  a  general 
one,  that  the  assignee  is  not  at  least  ordinarily  bound  to  take  into  his  possession  pi-op- 
erty,  wl^icli  will  be  a  burden  instead  of  a  benefit  to  the  estate.  If  the  assignee  elects  a 
right  not  to  take,  the  property  remains  in  the  bankrupt,  and  no  one  has  a  right  to  dis- 
pute his  possession.  His  possessory  title  is  good  against  all  the  world  but. his  assignee. 
Webb  V.  Fox,  (7  Term  R.  391);  Fowler  v.  Down,''(l  Bos.  &  Pull.  44).  Thus  in  this 
case  if  the  assignee  elected  not  to  take  the  right  of  the  bankrupt,  and  charge  the  estate 
with  the  costs  of  a  suit  in  equitj',  the  issue  of  which  was  uncertain,  the  right,  whatever 
it  was,  remained  in  the  bankrupt,  and  might  be  pursued  by  any  creditor  who  had  not 
proved  under  the  bankruptcy."  But  if  he  accepts  such  property,  he  is  liable  for  the 
covenants  in  the  lease.     Holford  v.  Hatch,  Doug.  183. 


en.  XV.]  OF   BAXKRUrTCY   AND    IXSOLVEXCY.  299 

erty  thus  collected.  In  general,  lie  is  clothed  with  the  power  and 
is  subject  to  the  responsibilities  and  disabilities  of  a  trustree.' 
Thus,  if  he  sells  any  property  of  the  insolvent,  he  cannot  buy  it 
himself.  He  niay  compound  debts  due,  or  otherwise  arrange  for 
them,  but  on  his  own  responsibility,  unless  under  order  of  the 
supervising  court,  which  it  is  always  prudent,  and  perhaps  neces- 
sary, to  obtain,  previous  to  any  action  of  the  kind.  And  the  same 
thing  is  true  of  any  temporary  investment,  or  any  change  of  in- 
vestment of  the  assets.  Generally,  he  should  deposit  all  moneys 
as  soon  as  collected,  in  some  bank  of  perfectly  good  credit,  and  to 
the  special  account  of  the  fund  of  the  assignment.^  He  may  re- 
deem mortgages  or  pledges ;  but  here,  also,  he  should  obtain  the 
sanction  of  the  court.^  So  he  may  transfer  notes  payable  to  the 
insolvent  by  indorsing  them  in  his  own  name.  And  where  a  note 
was  actually  transferred  before  insolvency,  by  the  insolvent,  to  a 
bond  fide  holder,  and  the  insolvent  intended  to  indorse  the  same, 
but  neglected  to  do  so,  the  assignee  may  indorse  it  for  the 
holder.-i 

It  is  undoubtedly  the  rule  that,  when  the  assignee  acts  in  the 
discharge  of  simple  and  ordinary  duties,  he  is  liable  only  for 
want  of  ordinary  skill  and  care.'^  But,  as  he  may  have  the  order 
of  the  court  in  all  extraordinary  cases,  if  he  does  not  obtain  this, 
but  acts  on  his  own  judgment,  he  is  held  to  a  more  stringent 
responsibility.     It  is  not  always  easy  to  draw  the  line  between 


1  Aiul  his  responsibility  as  tmstee  has  liecn  so  strictly  construed,  that  an  assignee, 
who  was  an  accountant,  was  not  allowed  to  charge  for  his  services  in  that  capacity. 
See  Ex2>arte\lQA([,  1  Glynn  &  J.  7J;  Ex  parte  Turner,  1  Mont.  &  McA.  52. 

-  Ex  parte  Reynolds,  .5  Ves.  Jun.  707  ;  Ex  parte  Beaumont,  3  Dca.  &  Chit.  549. 
The  elaborate  and  learned  opinion  of  Lord  Eldon,  in  Ex  parte  Lacey,  6  Ves.  Jun.  625, 
where  the  close  resemblance  in  the  liability  of  an  assignee  to  that  of  a  trustee  is  fully 
set  forth.  Ex  parte  James,  8  Ves.  337  ;  Ex  parte  Alexander,  2  Mont.  &  Ayr.  492  ;  Ex 
parte  Turvill,  3  Dea.  &  Ch.  346  ;  Ex  parte  Bage,  4  Mad.  459  ;  In  re  Salisbury,  Buck, 
245 ;  Davis  v.  Simpson,  5  Har.  &  John.  147  ;  De  Caters  r.  Lc  Ray  De  Charmant,  3 
Paige,  178  ;  Davoue  v.  Fanning,  2  Johns.  Ch.  256  ;  Richardson  v.  Jones,  3  Gill  &  J. 
163.  Tlic  duties  and  responsibilities  of  the  assignee  are  well  set  forth  in  Owen  on 
Bankruptcy,  p.  235  et  seq. 

**  As  to  right  of  redemption  of  a  mortgage,  see  Pope  i\  Onslow,  2  Vern.  286. 

*  Ex  parte  Mowbray,  jac.  &  W.  428.  This  was  a  petition  praying  that  assignees 
might  be  ordered  to  indorse  a  bill  of  excliange  which  had  been  transferred  before  the 
bankruptcy  for  valuable  consideration,  I)ut  witliout  indorsement ;  if  the  bill  was  not 
indorsed,  the  jictitioner  claimed  to  be  a  creditor  for  tlie  amount.  Lord  Chancellor  El- 
don :  "  The  difticulty  is,  to  frame  an  order  which  shall  provide  for  a  special  indorse- 
ment, that  will  prevent  the  assignees  from  being  personall}"  liable.  But  if  a  special 
indorsement  is  made,  and  the  petitioner  will  be  content  with  it,  I  see  no  reason  why  I 
should  not  make  the  order;  if  he  is  not  satisfied  with  that,  he  must  apply  again."' 

^  Ex  parte  Belchier,  Amb.  218,  above  cited. 


300  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 

these  two  classes  of  cases.     The  statutes  provide  for  some  of 
them  ;  practice,  or  the  obvious  reason  of  the  thing,  for  more  ;  and 
where  there  is  any  doubt,  it  is  always  in  the  power  and  always 
prudent  for  the  assignee  to  have  the  direction  and  authority  of, 
the  court. 

The  assignee  is,  in  general,  subject  to  the  same  equities  as  the 
insolvent ;  where  title  to  any  thing  is  not  confirmed  by  passing 
to  the  hands  of  the  assignee,  even  where  it  would  be  so  by  trans- 
fer for  value  to  a  third  party .^  Thus,  if  a  negotiable  note  were 
held  by  an  insolvent,  under  circumstances  which  would  give  to 
the  promisor  a  good  defence  if  he  were  sued  by  the  insolvent 
himself,  but  not  if  he  were  sued  by  a  third  party,  the  same  de- 
fence may  be  made  to  the  action  if  it  be  brought  by  the  assignee. 

We  have  said  that  the  assignee  is  bound  to  take  possession  of 
the  whole  estate  of  the  insolvent.  But  here  also  he  has,  and 
should  exercise,  a  discretion.  If  the  property  be  incumbered  by 
liens,  or  obligations,  which  would  reduce  its  value  to  nothing, 
and  for  which  the  assignee  makes  himself  or  his  fund  responsible 
by  taking  possession,  he  may  and  should  decline  the  possession. 
Leasehold  property,  for  example,  may  be  held  by  the  insolvent 
on  terms  which  require  him  to  pay  more  than  it  is  worth ;  and  if 
the  assignee  takes  possession  of  this  property  under  the  assign- 
ment, he  would  be  liable  for  the  rent.  This  he  should  avoid.^ 
But  here  also,  we  repeat,  he  would  be  safest  in  acting  under  the 
direction  of  the  court. 

The  assignee  may  sue  in  his  own  name,  even  upon  covenants 
made  with  the  insolvent.-^     And  all  the  assignees  should  join  in 


1  Ex  parte  Hanson,  12  Ves.  34G.  Lord  Cliancellor  ErsJdne:  "There  is  a  clear 
principle  that  decides  this  case,  that  assignees  in  bankruptcy  take,  subject  to  all  equi- 
ties, attaching  upon  the  bankrupt;  and  as  the  condition  of  the  bankrupts,  if  they  had 
continued  solvent,  would,  as  between  them  and  these  persons,  be  such  as  I  have  repre- 
sented, tliat  must  be  the  condition  of  the  assignees."  Ex  parte  Herbert,  13  Ves.  188. 
"  The  proposition  that  the  assignees  take  subject  to  all  the  equities  under  which 
the  bankru])t  stood,  is  unquestionable."  Mitford  v.  Mitford,  9  Ves.  100;  Pope  v. 
Onslow,  2  Vern.  286;  Brown  v.  Hcathcote,  1  Atk.  160-162;  Scott  v.  Surnam,  Willes, 
402.  And  cases  collected  in  the  reporter's  note.  Leslie  v.  Guthrie,  1  Bing.  N.  C.  697; 
Ex  parte  Ncwhall,  2  Sto.  360  ;  Fletcher  v.  Morej',  id.  55.5  ;  Mitchell  v.  Winslow,  id. 
630 ;  Humphreys  v.  Blight's  Assignees,  1  Wash.  C.  C.  44 ;  Stouffer  v.  Coleman,  1 
Yeates,  399  ;  In  the  matter  of  McLcllan,  6  Law  Rep.  440  ;  Tallcott  v.  Dudley,  4  Scam. 
427.  And  it  seems  that  the  only  exception  to  this  rule  arises  in  cases  of  fraud,  which, 
indeed,  forms  an  exception  to  every  general  rule.  Story,  J.,  in  the  cases  above  cited 
from  2  Story's  Reports,  and  in  6  Law  Ilep.  440. 

-  See  the  cases  cited  on  this  point,  p.  298,  n.  2. 

3  Parker  v.  Manning,  7  T.  II.  537 ;  Bedford  v.  Brutton,  1  Bing.  N.  C.  399. 


Cir.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  301 

bringing  any  suit.^  And  if  the  promisees  of  a  joint  note  become 
several  bankrupts,  with  several  assignees,  these  should  join  in 
suing  it.2  If  an  assignee  or  assignees  die,  or  are  removed,  pend- 
ing any  suit  which  they  bring,  or  which  is  brought  against  them, 
the  action  survives  or  continues  over  until  the  substituted  as- 
signee takes  the  place  of  the  original.^  It  is  said  that,  if  the 
cause  of  action  arise  before  the  bankruptcy,  the  assignee  may 
sue,  but  must  declare  as  assignee;  but  if  it  arises  after  the  bank- 
ruptcy, he  may  not  only  sue  in  his  own  name,  but  in  his  own 
right,  and  need  not  describe  himself  as  assignee.*     So,  it  is  said 

1  A  leading  case  upon  tliis  point  is  Sneligrove  v-  Hunt,  1  Chit.  71.  The  case  was 
an  action  of  usfiumpsit  on  a  bill  of  exchange  drawn  on  the  16th  of  January,  1818,  pay- 
able four  months  after  date,  for  £100,  to  the  order  of ,  the  bankrupt,  and  accepted 

by  the  defendant.  The  declaration  alleged  the  promises  to  be  made  to  the  assignees 
of  the  bankrupt.  It  appeared  at  a  previous  trial,  that,  after  the  commission  issued 
against  the  lumkrupt,  the  bill  of  exchange  in  question  became  due;  that  there  were 
three  assignees  appointed  under  the  commission,  two  only  of  which  joined  in  the  pres- 
ent action.  It  was  argued  at  length  by  F.  Pollock.  But  Bayley,J.,  said:  "The  decla- 
ration in  this  case  is  I'ounded  entirely  upon  the  promises  to  the  assigiiees,  and,  there- 
fore, they  ouglit  all  to  join."  And //o/zw/cA  J. :  "In  the  case  of  bonds  and  deeds,  it 
has  been  held  that  the  oliligees  or  covenantees,  if  alive,  ougiit  to  join  in  the  action,  and 
if  dead,  tliat  fact  should  be  averred  in  the  declaration."  And  to  the  same  point  is 
Bloxam  v.  Hubbard,  5  East,  407. 

-  But  in  such  case,  the  declaration  must  set  forth  in  what  capacity  each  sues,  and 
the  assignees  ought  to  state  their  several  and  respective  interests  in  the  declaration. 
Sneligrove  v.  Hunt,  above  cited. 

^  Bloxham  v.  Hubbard,  5  East,  407.  And  it  is  said  that,  in  case  of  the  removal  of 
an  assignee,  wliether  lie  was  plaintitf  of  record  in  an  action  relating  to  the  estate  or  not, 
the  action  may  be  continued  in  his  name  by  his  successor.  Page  v.  Baner,  4  B.  &  Aid. 
345.  And  if  an  assignee  die,  before  the  collection  of  the  debts  due  the  bankrupt,  it  is 
said  that  the  executor  of  the  assignee  may  sue  for  a  debt  due  the  bankrupt.  Richards 
V.  The  Maryland  Insurance  Co.  8  Cranch,  84.  But  see  Hall  r.  Gushing,  8  Mass.  521, 
where  it  was  iield  that  an  action  against  the  assignee  of  a  bankrupt  docs  not  survive 
against  the  administrator  of  such  assignee.  And  if  the  assignee  of  a  bankrupt  himself 
become  a  bankrupt,  and  make  an  assignment  as  such,  neither  his  assignees,  nor  his 
personal  representatives,  are  entitled  to  a  debt  outstanding,  due  the  bankrupt,  but  it 
must  go  to  a  new  assignee  of  the  original  bankrupt.     Merrick's  Estate,  5  Watts  &  S.  9. 

*  The  case  of  Evans  v.  Mann,  Cowp.  569,  is  decisive  in  recognizing  this  distinction, 
and  has  never,  as  we  are  aware,  been  doubted.  The  facts  were  briefly,  that  the  bunk- 
rapt,  after  his  bankruptcy,  and  before  he  had  obtained  his  certificate,  carried  on  his 
trade  as  a  lighterman,  and  both  built  and  sold  lighters.  He  sold  one  to  the  defendant, 
who  paid  him  part  of  the  purchase-money;  after  which  the  assignees  apply  to  the  de- 
fendant for  the  value  of  the  lighter ;  and  so  far  affirm  the  contract  as  to  enter  into 
an  agreement,  by  which  the)'  are  content  to  be  paid  the  residue  of  the  purciiase-money, 
after  deducting  what  the  bankrupt  had  received;  and  for  tiiis  residue,  tliey  have  brought 
the  action.  The  objection  to  the  form  of  the  action  was,  that  the  plaintitl's,  being  as- 
signees under  a  commission,  did  not  state  themselves  to  be  assignees  in  the  declara- 
tion. Lord  Manf^Jield  said:  "On  consideration,  there  seems  to  be  this  distinction:  if 
the  assignees  bring  an  action  on  a  contract  made  by  the  bankrupt,  before  his  bank- 
ruptcy, they  must  state  themselves  in  the  declaration  to  be  assignees.  But  liere,  the 
contract  was  after  bankruptcy,  when  the  bankrupt  could  have  no  |)roperty  of  his  own. 
The  lighter  was  the  property  of  the  assignees;  and,  consequently,  the  sale  by  him  was 
a  contract  as  their  agent,  by  operation  of  law,  and  on  their  account.  Tiierefore,  it  was- 
not  necessary  that  they  sliould  state  themselves  to  be  assignees  in  tiie  declaration;, 
though,  in  respect  of  the  evidence  in  support  of  the  action,  it  might  be  incumbent  on 
them  to  prove  the  trading,  bankruptcy,  &c.,  in  short,  the  whole  case."  Kiggil  v.  Player, 
I  Salk.  Ill,  and  cases  cited  to  this  point.     Thomas  v.  llideing,  Wightwick,  65. 

26 


302  ELEMENTS   OF  MERCANTILE   LAW.  [CIL  XV. 

that,  if  one  partner  of  a  firm  becomes  insolvent,  the  assignee 
should  join  with  the  remaining  partners  in  an  action  for  a  part- 
nership debt.^ 


SECTION  VIII. 

WHAT    PROPERTY    THE    ASSIGNEE   TAKES. 

It  has  been  already  intimated,  that  what  the  bankrupt  holds 
in  the  right  of  another,  does  not  pass  to  the  assignee.^  If,  there- 
fore, the  bankrupt  has  collected  a  debt  for  another,  and  has  kept 
the  sum  so  collected  apart,  it  belongs,  generally  speaking,  to  him 
for  whom  it  was  collected.  But  if  it  is  merged  indistinguishably 
into  the  general  assets  of  the  bankrupt,  the  owner  has  only  a 
claim  for  it  to  be  proved  like  other  debts.  So,  if  the  bankrupt 
sold  goods  for  his  principal,  and  they  are  not  paid  for,  the  prin- 
cipal can  collect  the  debt,  and  sue  in  his  own  name.  Or,  if  the 
bankrupt  has  received  payment  of  the  goods,  and  has  kept  that 
payment  apart,  the  owner,  generally,  could  reclaim  it;  but  not  if 
it  were  merged  in,  and  mingled  with,  his  assets.^ 

1  Thomason  v.  Frere,  10  Enst,  418. 

2  Carpenter  v.  Marnell,  3  B  &  F.  40;  Copeman  v.  Gallant,  1  P.  Wms.  314;  Ex 
parte  Gillett;  Ex  parte  Bacon,  3  Mad.  2S  ;  Joy  v.  Campbell,  1  Sth.  &  Lcf.  328;  Winch 
V.  Keeiy,  1  T.  R.  619  ;  Ex  parte  Martin,  19  Ves.  491 ;  Gardner  v.  Kowe,  2  Sim.  &  Stu. 
346  ;  Ex  parte  Cliion,  3  P.  Wms.  187,  n.  (a.) 

3  As  to  ^oods.  or  even  moneys  collected  by  a  factor,  if  they  can  be  distinguished, 
Godfrey  v.  Eurzo,  3  P.  Wms.  185  ;  Rowton,  ex  parte,  17  Ves.  426  ;  Sellers,  ex  jnirte,  18 
Ves.  229.  In  Willcs,  400,  Scott  v.  Surman,  it  was  held,  recognizing  the  doctrine  of 
the  text,  that,  if  goods  be  consigned  to  a  factor  for  sale,  and  he  sell  and  receive  the 
money  before  his  bankruptcy,  and  do  not  purchase  with  it  any  specific  thing,  capable 
of  being  distinguished  from  the  rest  of  his  property,  the  consignors  cannot  recover  the 
whole  money  from  the  assignees,  but  must  come  in  under  the  commission.  But  that, 
if  the  goods  remain,  in  specie,  in  the  factor's  hands  at  the  time  of  the  bankruptcy,  the 
consignors  may  recover  the  goods  in  trover  from  the  assignees.  Or,  if  a  factor  sell 
goods  for  his  principal,  and  become  bankrupt  before  payment,  and  his  assignees  after- 
wards receive  the  money  for  them,  tlie  principal  may  recover  it  from  them  in  an  action 
for  money  had  and  received.  Tiic  court,  with  regard  to  the  particular  facts  before 
them,  held  that  the  money,  which  had  been  received  by  the  factor  in  payment  of  goods 
sold,  could  not  be  recovered  in  full,  because  here,  it  could  not  be  distinguished  from 
other  money  of  the  bankrupt  factor.  "  Money  has  no  e;irmark,  and  therefore  cannot 
be  followed."  Willes,  C.  J.,  in  tliis  case.  But  in  the  modern  practice  of  fiictors,  when 
money  is  deposited  to  the  particular  account  of  each  consignor,  it  is  conceived  that  such 
money  may  well  be  held  to  possess  an  earmark.  And  to  the  same  point  arc,  Burdett 
V.  Wiilett,  2  Vern.  638;  Tooke  v.  HoUingworth,  5  T.  K.'21.5.  Lord  Kemjon,  C  J.:  '"If 
goods  be  sent  to  a  factor  to  be  disposed  of,  who  afterwards  becomes  a  bankrupt,  and 
the  goods  remain  distinguishable  from  the  rest  of  his  property,  the  principal  may  re- 
cover the  goods  in  specie,  and  is  not  driven  to  the  necessity  of  proving  his  debt  under 
the  commission  of  bankruptcy;  nay,  if  the  goods  be  sold  and  reduced  to  money,  provided 
that  money  be  in  separate  bags,  and  distinguishai)le  from  the  factor's  other  property, 
the  lavsr  is  the  same."    Price  v.  Ralston,  2  Dall.  60 ;  Taylor  v.  Plumer,  3  M.  &  S.  502 ; 


« 


en.  XV.]  OF    BANKRUPTCY    AND    INSOLVENCY.  303 

The  insolvent  laws  generally  exempt  from  their  operation  the 
same  or  similar  property  wiih  that  excepted  by  statute  from  at- 
tachment or  levy.'  Among  these,  is  wearing  apparel;  but  under 
this  clause  in  the  national  act,  it  was  held  that  articles  of  jewelry, 
belonging  to  the  bankrupt,  passed  to  his  assignee.^  In  New 
York,  however,  it  was  held  that  jewelry  and  ornaments  which 
belonged  to  the  wife  before  marriage,  or  were  given  to  her  after- 
wards,—  even  if  given  by  the  husband,  provided  he  was  not  then 
insolvent,  and  gave  the  articles  in  good  faith,  —  belonged  to  the 
wife,  and  not  to  the  assignee.^  In  a  case  which  occurred  in 
Boston,  Judge  Story  differed  somewhat  from  Judge  Betts,  apply- 
ing the  principles  of  equity  and  trust  to  the  question,  and  allow- 
ing to  the  wife  only  such  things  as  the  husband  must  be  regarded 
as  holding  in  trust  for  her.  So  as  to  gifts  to  the  children  of  an 
insolvent;  if  made  by  himself,  and  in  good  faith,  before  insol- 
vency, we  know  no  reason  why  they  should  not  remain  the 
property  of  the  children.  If  given  by  a  stranger,  there  could  be 
no  doubt.^ 

Dcnston  v.  Perkins,  2  Pick.  86  ;  Chesterfield  Manuf.  Co.  v.  Dehon,  5  Pick.  7;  Scrim- 
sliirc  r.  Aldcrtoii,  2  Strange,  1182.  So,  in  t!ie  case  of  an  executor.  Howard  v.  Jem- 
met,  (note.)  .3  Burr.  1.369.  Lord  Manstield  said:  "If  an  executor  becomes  bankrupt, 
the  commissioners  cannot  seize  the  specific  eftects  of  his  testator;  not  even  in  money, 
■which  specificall}'  can  he  distin<ruished  and  ascertained  to  belong  to  such  testator,  and 
not  to  the  bankrupt  himself"  Ex  parte  Chion,  cited  supra.  And  where  the  bankrupt's 
wife  is  an  executor,  the  property  shall  be  preserved  entire  to  the  testator's  representa- 
tives.    Viner  v.  Cadell,  3  Esp.88. 

^  The  late  bankrupt  law  of  the  United  States  excepted  from  its  provisions  the  neces- 
sary hou>ehold  and  kitchen  furniture  of  the  bankrupt,  and  such  other  articles  and  nec- 
essaries as  tiie  assignee  might  designate  and  set  apart,  having  reference  in  the  amount, 
to  the  family,  condition,  and  circumstances  of  the  bankrupt,  but  altogether  not  to  ex- 
ceed in  value,  in  any  case,  the  sum  of  three  hundred  dollars;  and  also  the  wearing 
apparel  of  the  bankrupt,  and  that  of  his  wife  and  children. 

-  In  the  matter  of  Kasson,  4  Law  Rep.  489  ;  In  the  matter  of  Grant,  5  Law  Kep.  11. 

3  Betts,  J.,  in  the  matter  of  Kasson,  4  L.  R.  489. 

*  The  doctrine  of  the  text  is  clearly  and  ablv  stated  by  Judge  Story,  in  the  matter 
of  Grant,  5  Law  Rep.  11,  and  2  Story,  312.  The  facts  stated  in  the  petition,  so  far  as 
material  to  this  point,  were,  that  the  wife  of  the  petitioner  was  possessed  of  a  watch  of 
about  the  value  of  fifty  dollars,  presented  to  her  by  the  petitioner,  about  ten  years  before 
the  filing  of  the  petition  ;  that  she  had  likewise  several  mourning  rings  and  pins,  and  a 
few  other  articles  of  jewelry,  of  the  value  of  about  twenty-five  dollars,  some  of  which 
had  been  given  her  "by  friends,  and  others  by  the  petitioner,  some  years  ])revious,  and 
one  mourning  ring,  of  "the  value  of  about  five  dollars,  given  her  by  the  petitioner  nearly 
two  years  before  filing  the  petition.  The  petition  further  stated  that  his  two  sons,  of 
the  respective  ages  of  seventeen  and  twenty  years,  had  each  a  gold  watch,  of  the  value 
of  about  fifty  dollars,  which  had  been  purchased  about  two  years  before  with  money 
given  by  a  frlond.  and  with  about  twenty-eight  dollars  given  to  each  by  the  petitioner, 
out  of  his  private  cash.  The  watch  of  the  wife,  and  any  jewelry  given  to  her  by  third 
persons  before  the  marriage,  or  by  her  husband,  either  before  or  since  the  marriage, 
pass  to  the  assignee  as  part  of  the  property  of  the  bankrupt,  to  which  his  creditors  are 
entitled.  But  jewelry,  given  by  third  persons  to  the  wife  since  her  marriage,  as  per- 
sonal ornaments,  and  mourning'rings,  given  to  her  by  third  persons  since  the  marriage. 


304  ELEMENTS   OF   MERCANTILE   LAW.  [ciL  XV. 

A  gift  is  not  complete  and  effectual  until  there  has  been  an 
assent  to  it  on  the  part  of  the  donee  ;i  and  the  same  rule  is 
generally  applicable  to  a  devisee.  But  where  one  devises  real 
estate  to  a  banl<rupt,  he  was  not  permitted  to  decline  it;  and  the 
true  reason  is,  that  the  assignee  had  become  possessed  of  his 
right  of  acceptance.2 

After  the  party  is  decreed  to  be  a  bankrupt,  it  would  seem 
that  whatever  comes  to  the  bankrupt  remains  his  own  property.^ 
If  the  title,  by  devise  or  otherwise,  falls  upon  him  after  the  peti- 
tion and  before  the  decree,  it  goes  to  the  assignee,  as  much  as  if 
it  fell  before  the  petition.*     But  the  insolvent  laws  do  not  contain 

as  personal  memorials,  belong:  to  the  wife  for  licr  sole  and  separate  use  in  equity,  and 
do  not  pass  to  tiie  assignee  under  the  bankruptcy  for  the  benefit  of  the  creditors.  That 
the  watches  of  the  sons,  under  the  circumstances  stated  in  the  petition,  belong  to  them, 
as  their  property.  But,  nevertheless,  if  the  petitioner  was  insolvent  when  he  applied  a 
part  of  his  own  money  to  purchase  the  same  for  his  sons,  he  had  no  right  so  to  do 
against  the  claims  of  tiic  creditors;  and  that  in  equity,  tlierefore,  if  the  petitioner  was 
so  insolvent,  the  sons  must  account  to  the  assignee  for  the  amount  of  the  money  of  the 
petitioner,  so  paid  towards  the  purchase  of  the  watches.  But  if  the  petitioner  was  not 
then  insolvent,  and  the  donation  on  his  part  was  made  hondjide,  and  the  donation  was 
suitable  to  his  rank  in  life,  condition,  and  estate,  then  it  was  good,  and  not  within  the 
reach  of  the  creditors,  or  in  fraud  of  their  rights  under  the  bankruptcy. 
'  2  Kent's  Commentaries.  438. 

2  The  doctrine  with  regard  to  a  devise  is,  that  the  devisee  must  consent,  otherwise  the 
title  does  not  vest  in  him.  But  when  the  estate  is  devised  absolutely  and  without  any 
trust  or  incumbrances,  the  law  will  presume  it  to  be  accepted  by  the  devisee,  because  it 
is  for  his  benefit;  and  some  solemn,  notorious  act  is  required  to  establish  his  disclaimer 
of  it.  Townson  v.  Tickell,  3  B.  &  Aid  31  ;  Doe  v.  Smyth,  6  B.  &  C.  112;  Brown  v. 
Wood,  17  Mass.  68 ;  Ward  v.  Fuller,  l.'i  Pick.  185.  And  it  will  be  considered  for  the 
benefit  of  the  bankrupt,  that  his  creditors  sliould  have  all  the  property  of  which  he  has 
the  right  of  ownership.  For  in  Ex  parte  Fuller,  5  Law  Reporter,  213,  and  2  Story,  327, 
S-  C,  «SWi/,  J.,  said  :  "It  has  been  suggested,  that  the  devise  was  not  beneficial  to 
Ross,  (the  bankrupt,)  and  therefore  no  presumption  can  arise  of  his  acceptance  of  it. 
How  that  can  be  well  made  out,  I  do  not  perceive.  Before  his  bankruptcy,  it  was 
clearly  for  his  benefit;  and  that  event  has  not  changed  the  nature  of  the  interest,  but 
merely  the  mode  of  appropriating  it.  His  own  voluntary  act  has  enabled  his  creditors 
to  have  the  benefit  of  it.  As  an  honest  debtor,  he  must  desire  that  his  creditors  should 
derive  as  much  benefit  from  all  his  '  rigiits  of  property,'  as  is  possil)le.  It  would  be 
a  fraud  on  his  part  to  withdraw  any  fund  from  their  reach  by  a  disclaimer  or  renuncia- 
tion ;  and  it  ought  to  deprive  him  of  a  certificate  of  discharge.  It  i.s,  therefore,  clearly 
now  for  his  benefit  to  presume  his  acceptance  of  the  devise;  rather  than  to  presume 
him  willing  to  aid  in  the  perpetration  of  a  fraud." 

3  Owen  on  Bankruptcy,  124:  Story,  J.,  in  the  matter  of  Grant,  2  Story,  312;  Webb 
w.  Fox,  7  T.  R.  391. 

*  Ex  parte  Newhall,  2  Story,  3G0.  "  The  third  section  of  the  bankrupt  act  of  1841, 
chapter  9,  declares,  that  all  property  and  rights  of  property  of  every  bankrupt,  who 
shall,  by  a  decree  of  the  proper  court,  be  declared  a  bankrupt  within  the  act,  shall  by 
the  mere  operation  of  law,  ijisofarto,  from  the  time  of  such  decree,  be  deemed  to  be 
devested  out  of  the  bankrupt,  and  the  same  sliall  be  vested  liy  force  of  the  same  decree 
in  such  assignee,  as  from  time  to  time  shall  be  appointed  by  the  proper  court  for  this 
purpose.  It  seems  to  me  that  the  natural,  and  even  necessary  interpretation  of  tiiis 
clause  is,  that  all  the  property  and  rights  of  property  of  the  bankrupt,  at  the  time  of 
the  decree,  are  intended  to  be  passed  to  the  assignee-  It  is  true,  that  the  decree  will 
also  by  relation  cover  all  the  property  which  he  had  at  the  time  of  filing  the  petition, 
and  at  all  intermediate  times,  to  effect  the  manifest  purposes  of  the  act.    But  this  is 


CII.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  305 

the  same  provisions  as  to  decree,  &c. ;  and  it  is  probable  that  the 
time  when  the  insolvent  shall  begin  to  hold  as  his  own  what 
comes  to  him,  will  generally  be  determined  by  the  phraseology 
of  each  statute,  or  the  practice  under  it. 

If  one  partner  of  a  firm  becomes  insolvent,  this  operates  a 
dissolution  of  the  partnership;  and  his  assignee  takes  only  his 
interest  in  the  balance  remaining  after  the  debts  are  paid.'  To 
ascertain  this,  it  is  the  common  practice  to  permit  the  assets  to 
remain  in  the  hands  of  the  other  partners  for  them  to  settle  the 
affairs  of  the  firm  and  render  an  account.  But  there  is  nothing 
to  prevent  an  appraisement  or  agreement  as  to  the  value  of  the 
insolvent's  interest,  and  a  transfer  of  that  for  its  value  to  the  other 
partners.  But  such  an  arrangement  should  not  be  made  without 
the  sanction  of  the  court.^  And  of  course  it  would  not  be  bind- 
ing in  favor  of  the  other  partners,  if  it  were  made  fraudulently, 
with  their  connivance  or  knowledge  or  reasonable  means  of 
knowledge.  The  assignee  of  the  insolvent  partner  is  said  to  be 
a  tenant  in  common  with  the  other  partners  ;  so  that  neither  can 
take  the  property  from  the  hands  of  the  other.  But  the  solvent 
partners*  must  have  a  right  to  hold  the  property  needed  to  settle 
the  concern. 

Where,  after  the  petition,  property  fell  to  the  wife  of  the  bank- 
rupt, in  such  way  as  to  give  him  the  right  of  possessing  it,  in 
the  final  decree  the  "  equity"  of  the  wife's  interest  was  regarded, 

rather  a  conclusion,  dcducible  from  the  general  provisions  and  objects  of  the  whole  act, 
than  a  positive  provision.  It  results  by  necessary  implication  in  order  to  effectuate 
tlie  obvious  purposes  of  the  act,  and  to"  prevent  what  otherwise  would  or  might  be 
irremediable  mischiefs." 

1  Parker  ct  al.  v.  Maggridge  et  al.  2  Story,  .346.  "  The  general  rule  in  bankruptcy 
is,  that  in  cases  of  partnership,  where  one  party  becomes  bankrupt,  his  assignee  can 
take  only  that  portion  of  the  partnership  assets  which  would  belong  to  the  bankrupt, 
after  payment  of  all  the  partnership  delits;  and  that  the  solvent  partners  have  a  lien 
upon  the  partnership  assets  for  all  tlie  partnership  debts,  and  also  for  their  own  shares 
thereof,  before  the  separate  creditors  of  the  bankrupt  partner  can  come  in  and  take  any 
thing.  It  is  true  that,  in  such  cases,  it  may  often  from  the  necessity  of  the  case,  and 
for  the  purpose  of  ascertaining  the  partnership  assets  and  debts,  and  adjusting  and 
settling  the  same,  and  making  a  final  settlement  and  distribution  of  the  surplus,  be 
indispensable,  that  the  district  court,  as  a  court  of  equity,  should  take  into  its  own 
hands  the  exclusive  management  and  administration  of  all  the  partnership  assets,  and  in- 
hibit the  other  partners  from  intermeddling  therewith.  But  this  it  will  do  with  caution,  and 
solely  for  the  purposes  before  stated.  And  so  far  from  thereby  displacing  any  of  the 
ri"hts,  liens,  and  equities  of  the  other  partners,  it  studiously  seeks  to  maintam  and 
protect  them."  The  learned  opinion  of  Ware,  J.,  in  Ayer  v.  Brastow,  in  the  District 
Court  of  Maine,  reported  5  Law  Kep.  498. 

2  See,  for  illustrations  of  this  doctrine,  the  cases  above  cited,  and  a  leadmg  case  m 
•America,  Tallcott  v.  Dudley,  4  Scam.  427,  where  this  subject  of  insolvent  partners  is 

examined  with  great  ability.  Smith  v.  Oricll,  I  East,  368  ;  Smith  v.  Stokes,  1  East, 
363.   And  the  remaining  partners,  in  adjusting  the  accounts  of  the  firm  after  the  disso- 

26* 


306  ELEMENTS    OF    MERCANTILE   LAW.  [CH.   XV. 

and  reasonable  provision  for  her  support  was  made  out  of  this 
property.' 

An  assignment  in  insolvency  passes  the  money  of  the  insol- 
vent in  the  hands  of  an  attorney  who  has  collected  it  for  him.''^ 

It  passes  the  possibility  of  estate  or  title,  when  that  is  con- 
nected with  an  interest;  as,  for  example,  a  contingent  remainder; 
but  not  a  naked  possibility,  as  that  of  an  heir.^ 


lution,  may  reimburse  themselves  for  snms  which  the  bankrupt  has  abstracted.     2  Eq. 
Cas.  Abr.  110;  Ricliardson  v.  Gooding,  2  Vera.  293.   And  if  after  the  bankruptcy  of  one  ' 
partner,  the  others  carry  on  the  business  with  the  partnership  funds,  the  assignee  of  the 
bankrupt  is  entitled  to  a  share  of  the  profits.     Crawshay  v.  Collins,  1  Jae.  &  W.  267  ; 
15Ves.  218.  I 

1  Shaw  V.  Mitchell,  5  Law  Rep.  453.  Ware,  J.,  said  in  this  case:  "Whenever  the] 
husband  is  obliged  to  seek  the  aid  of  a  court  of  equity  to  obtain  possession  of  the  '■ 
wife's  property,  the  court  will  give  its  aid  only  on  condition  that  the  husband  settle 
part  of  the  property  on  the  wife,  to  be  held  for  her  benefit  independent  of  the  husband 
and  his  creditors.  This  right  of  the  wife  to  a  reasonable  provision  out  of  her  own 
property  for  the  support  of  herself  and  her  children,  is  called  the  wife's  equity.  The 
general  principle  on  which  the  court  interpose  in  her  favor,  is  said  to  be  that  he  who 
seeks  equity  shall  do  equity;  and  the  present  disposition  of  courts  seems  to  be  rather 
to  enlarge  tlian  curtail  the  beneficial  operation  of  the  rule  in  favor  of  married 
women.  This  is  the  established  rule  in  all  cases  where  the  husband  himself,  or  his 
general  assignee  for  the  payment  of  debts,  or  under  insolvent  laws,  or  in  bankruptcy,  is 
obliged  to  have  recourse  to  a  court  of  equity  to  obtain  possession  of  the  wife's  personal 
property."  This  case  appears  to  me  to  fall  within  the  general  principles  on  wh'ich  this  ju- 
risdiction is  exercised  by  courts  of  equity.  And  as  this  court,  sitting  in  bankruptcy,  has 
all  the  powers  of  a  court  of  general  equity  jurisdiction,  it  has  the  authority  to  allow 
the  claim  of  the  petitioner.  If  it  would  be  allowed  against  the  husband,  it  will  be 
equally  so  against  his  assignee.  An  assignment  by  operation  of  law  in  bankruptcy 
passes  the  property  in  the  same  plight  and  condition  as  it  was  possessed  by  the  bank- 
rupt himself,  and  .subject  to  all  the  equities  that  affected  it  in  his  hands." 

■■^  And,  in  general,  any  property  of  the  bankrupt  which  was  in  the  hands  of  another 
at  the  time  of  the  decree  in  bankruptcy,  vests  in  his  assignee,  subject  to  any  lien  or 
claim  its  holders  may  have  upon  it.     See  cases  cited  on  the  matter  of  lien,  p.  295,  n.  4. 

'^  It  seems  that  the  test,  by  which  to  decide  whether  property  of  this  general 
character  passes  by  the  decree  in  bankruptcy  is,  whether  the  right  is  such  that  the 
bankrupt  himself  could  have  assigned  it.  Higden  v.  Williamson,  3  P.  Wms.  131; 
Moth  V.  Frome,  Ambler,  394 ;  Dommctt  v.  Bedford,  6  T.  R.  684 ;  under  this  rule,  a 
patent-right  will  pass.  Hesse  v.  Stevenson,  3  B.  &  P.  565.  Lord  Alvanlei/,  C.  J., 
delivering  the  opinion  of  the  coiirt  said,  (p.  577):  "It  is  contended  that  the  natiire 
of  the  property  in  this  patent  was  such  that  it  did  not  pass  under  the  assignment ;  and 
several  cases  were  cited  in  support  of  this  proposition.  It  is  said  that  although  by  the 
assignment  every  right  and  interest,  and  every  right  of  action,  as  well  as  right  of  posses- 
sion and  possibility  of  interest,  is  taken  out  of  the  bankrupt  and  vested  in  the  assignees, 
yet  that  the  fruits  of  a  man's  own  invention  do  not  pass.  It  is  true  that  the  schemes 
which  a  man  may  have  in  his  own  head  before  he  obtains  his  certificate,  or  the  fruits 
which  he  may  make  of  such  schemes,  do  not  pass,  nor  could  the  assignees  require  him 
to  assign  them  over,  provided  he  does  not  carry  his  schemes  into  efiect  until  after  he  has 
obtained  his  certificate.  But  if  he  avail  himself  of  his  knowledge  and  skill,  and  thereby 
acquire  a  beneficial  interest,  which  may  be  the  subject  of  assignment,  I  cannot  frame  to 
myself  an  argument  why  that  interest  shall  not  pass  in  the  same  manner  as  any  other 
property  acquired  by  his  personal  industry.  Can  there  be  any  doubt,  that  if  a  bankrupt 
acquire  a  large  sum  of  money,  and  lay  it  out  in  land,  that  the  assignees  may  claim  it  1 
They  cannot  indeed  take  the  profits  of  his  daily  labor.  He  must  live.  But  if  he 
accumulate  any  large  sum,  it  cannot  be  denied  that  the  assignees  are  at  liberty  to  de- 
mand it ;  though  until  they  do  so,  it  does  not  lie  in  the  mouth  of  strangers  to 
defeat  an  action  at  his  suit  in  respect  of  such  property  by  setting  up  his  bankruptcy. 


en.  XV.]  OF   BANKRUPTCY   AND    INSOLVENCY.  307 

So  it  cancels  and  revokes  any  attorney's  lien  or  authority  given 
by  the  insolvent;  but  not  if  it  be  coupled  with  an  interest.  The 
distinction  here  would  doubtless  be  much  the  same  as  between 
those  powers  which  are  withdrawn  by  death,  and  those  which 
are  not.  But  when  an  authority  is  withdrawn  by  the  death  of 
the  principal,  it  is  because  it  can  only  be  executed  in  his  name; 
but  the  legal  representatives  must  execute  it  for  the  benefit  of 
the  former  attorney ;  and  in  such  cases,  the  insolvency  would 
not  revoke  the  authority. 

Where  there  is  no  insolvent  law,  there  is  nothing  to  prevent  a 
debtor  from  making  a  voluntary  assignment  of  his  property,  in 
trust  for  his  creditors;  and  to  assign  so  much  only  as  he  pleases, 
and  favor  one  creditor,  or  one  class  of  creditors,  at  his  own  choice, 
and  generally  to  constitute  the  trust  upon  terms  as  he  prefers.^ 
The  mischiefs  resulting  from  this  state  of  things,  led  as  we  have 
said,  to  the  general  introduction  of  insolvent  laws.^  But  they 
do  not  exist  in  all  the  States;  and  where  they  do  not,  the  same 
questions,  and  the  same  diversity  of  decision  may  be  expected 
which  led  to  their  adoption  elsewhere.  Thus,  in  some  States,  no 
assignment  enured  to  the  benefit  of  creditors  who  did  not  become 
parties  to  it;  in  others,  their  assent  was  presumed  on  the  ground 
that  it  was  for  their  benefit.  And,  generally,  an  assignment  which 
provided  for  the  absolute  discharge  of  the  assignor,  was  construed 
with  much  more  strictness  than  one  which  provided  only  for  the 
distribution  of  the  property.^ 


SECTION  IX. 

OF  THE  DISCHARGE  OF  THE  INSOLVENT. 

Among  the  insolvent  laws  of  the  several  States  there  is  a 
great  diversity  in  the  kind  and  extent  of  relief  or  benefit  which 
they  give  to  the  insolvent.  In  some,  only  his  present  assets  are 
distributed,  leaving  future  acquisitions  liable  to  attachment.     In 

We  are  therefore  deariy  of  opinion,  that  the  interest  in  the  letters-patent  was  an 
interest  of  such  a  nature  as  to  he  the  suhjcct  of  assignment  by  the  commissioners."  So 
an  interest  in  a  policy  of  insurance.     Schondlcr  v.  Wace,  1  Campb.  487. 

1  See  supra,  and  cases  cited  on  the  subject  of  preference  of  creditors  at  the  common 
law,  p.  276,  n.  1. 

2  2  Kent's  Commentaries,  394. 

8  16  rick.  25  ;  id.  .36.  The  cases  which  illustrate  this  doctrine  are  fully  cited,  supra, 
in  the  notes  upon  the  subject  of  preference  of  creditors  at  the  common  law,  p.  276,  n.  1. 


308  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 


some,  the  insolvent  is  discharged  and  protected  from  arrest  or 
imprisonment.  In  some,  the  debtor  is  discharged  if  so  voted  by  ; 
a  certain  proportion  of  his  creditors.  In  some,  the  debtor  is  dis- 
charged if  so  voted,  or  without  or  against  the  will  of  his  credit- 
ors, provided  his  assets  pay  a  certain  per  centage  of  his  debt. 
The  principal  provisions  of  this  sort  we  state  in  our  notes.^ 

If  a  bankrupt  or  insolvent,  who  can  be  discharged  only  by  the 
assent  or  vote  of  his  creditors,  gives  money  to  any  one  or  more, 
to  obtain  their  assent,  his  discharge  is  void  ;  and  the  assignees 
can  recover  the  money  from  the  creditor.  And  if  he  gives  the 
creditor  a  bond,  note,  or  promise,  for  the  same  purpose,  it  is 
void.^ 

1  The  persons  who  are  entitled  to  relief  under  the  insolvent  laws  differ  in  the  different 
States.  In  California,  Michigan,  Ohio,  Indiana,  Louisiana,  Missouri,  Connecticut, 
New  York,  Massachusetts,  Arkansas,  and  Rhode  Island,  any  debtor,  whether  in  or  out 
of  prison,  may  have  the  benefit  of  the  insolvent  laws.  Laws  of  Cal.,  1850-53,  ch.  80  ; 
Rev.  Slat,  of  Mich.,  1837,  title  7,  ch.  3  ;  Stats,  of  Conn.,  1838,  p.  270 ;  Rev.  Stat,  of 
Ohio,  1854,  ch.  57  ;  Rev.  Stat,  of  Arkansas,  1837  ;  2  Kent's  Com.  394.  In  Delaware, 
Maryland,  Tennessee,  North  Carolina,  South  Carolina,  Georgia,  Alabama,  Mississippi, 
Illinois,  and  New  Jersey,  persons  only  are  entitled  to  relief  who  are  imprisoned  oa 
mesne  or  final  process.  See  the  Statutes  and  Codes  of  these  States.  But  in  Maine, 
New  Hampshire,  Kentucky,  and  Virginia,  the  relief  is  confined  to  debtors  charged  in 
execution.  In  Vermont,  the  only  law  resembling  an  insolvent  act  is  one  of  the  Legis- 
lature of  1855,  forbidding  voluntary  assignments  witli  a  preference  ;  but  there  is  a  con- 
stitutional provision  that  the  debtor  shall  not  be  continued  in  prison  where  there  is  not 
a  strong  presumption  of  fraud  after  delivei'ing  up  and  assigning,  bond  fide,  all  his  estate 
for  the  use  of  his  creditors.  The  provisions  relating  to  the  effect  of  the  discharge  vary, 
also,  in  different  States.  The  Statutes  of  Arkansas,  New  Jersey,  North  Carolina,  Mis- 
sissippi, Tennessee,  Illinois,  Georgia,  Missouri,  Connecticut,  Pennsylvania,  and  Ohio, 
exempt  only  the  person  of  the  debtor  from  imprisonment.  Stat,  of  N.  J.,  1847,  tit.  9, 
ch.  4  ;  Rev'  Stat,  of  Arkansas,  1837;  Stat,  of  Conn.  1838,  p.  270;  Ohio  Rev.  Stat.; 
Code  of  North  Carolina ;  Statute  Laws  of  Tennessee.  The  Statutes  of  California, 
Michigan,  and  Massachusetts  provide  for  the  discharge  of  the  insolvent  from  liability 
for  the  debt  itself,  if  his  property  be  assigned  and  distributed  among  his  creditors. 
Laws  of  Cal.,  1850-53,  ch.  80;  Rev.  Stat,  of  Michigan,  1837,  tit.  7,  ch.  3;  Massachu- 
setts Insolvent  Laws  of  1838.  The  laws  of  New  York  upon  this  suliject  differ  in  im- 
portant respects  from  those  of  many  of  the  States.  We  give  a  few  of  its  provisions,  as 
abridged  from  the  statutes  bj"^  Chancellor  Kent.  "  The  insolvent  laws  of  New  York 
enable  the  debtor,  with  the  assent  of  two  thirds  in  value  of  his  creditors,  and  on  the  due 
disclosure  and  surrender  of  his  property,  to  be  discharged  from  all  his  debts  contracted 
within  the  State,  subsequently  to  the  passing  of  the  insolvent  act,  and  due  at  the  time 
of  the  assignment  of  his  property,  or  contracted  before  that  time,  though  payable 
afterwards.  The  creditor  who  raises  objections  to  the  insolvent's  discharge,  is  entitled 
to  have  his  allegations  heard  and  determined  by  a  jury.  The  insolvent  is  deprived  of 
the  benefit  of  a  discharge,  if,  knowing  of  his  insolvency,  or  in  contemplation  of  it,  he 
has  made  any  assignment,  sale,  or  transfer,  either  absolute  or  conditional,  of  any  part 
of  his  estate,  or  has  confessed  judgment,  or  given  any  security  with  a  view  to  give  a 
preference  for  an  antecedent  debt  to  any  creditor.  Tlu;  discharge  applies  to  all  debts 
founded  upon  contracts  made  within  the  State,  or  to  be  executed  within  it;  and  for 
debts  due  to  persons  resident  within  the  State  at  the  time  of  the  publication  of  notice 
of  the  application  for  a  discharge,  or  to  persons  not  residing  within  the  State,  but  who 
united  in  the  petition  for  his  discharge,  or  who  accept  a  dividend  from  his  estate." 

-  Sumner  v.  Brady,  1  H.  BI.  647  ;  Thomas  v.  Rhodes,  3  Taunt.  478 ;  Archbold's 
Bankrupt  Law,  201  ;  Birch  v.  Jervis,  3  C.  &  P.  379.  Lord  Tenlerden,  in  the  last  case 
said :  "  A  bill  given  to  a  creditor,  to  induce  him  to  sign  the  certificate  of  a  bankrupt, 


en.  XV.]  OF   BANKRUPTCY    AND    INSOLVENCY.  309 

No  certificate  of  discharge  afiects  the  claims  of  creditors  upon 
co-debtors  or  sureties.  Nor  does  it  reach  the  liability  of  the  in- 
solvent for  torts  ;  —  as  slander,  trespass,  or  the  lilcc;  nor  for  tres- 
pass for  mesne  profits;  nor  for  fiduciary  debts,  which  were  not 
proved  before  the  assignee ;  nor,  generally,  for  any  debts  not 
provable.! 

SECTION  X. 

OF   FOREIGX    BANKRUPTCY   OK   INSOLVENCT, 

The  effect  of  proceedings  in  bankruptcy  in  a  foreign  State  has 
been  much  discussed  and  variously  determined.  The  principal 
question  may  be  stated  thus  :    Let  us  suppose  that  an  English 

is  void,  in  •whosesoever  hands  it  may  be,  and  whatever  the  consideration  given  by  the 
holder."  Smith  v.  Bromley,  cited  in  Jones  v.  Barklcy,  Doug.  696  ;  Rohson  v.  Calze, 
Doug.  230.  Even  if  the  money  is  not  given  by  tlie  bankrupt,  or  with  his  privity, 
the  discharge  is  void.  Ex  parte  Butt,  10  Ves.  359  ;  Ex  parte  Hall,  17  Ves.  62 ;  Hol- 
land I'.  Palmer,  1  B.  &  P.  95. 

1  On  the  suliject  of  co-debtors  and  sureties,  see  Morse  v.  Hovev,  1  Sandf.  Ch.  187  ; 
Selfridge  v.  Gil'h  4  Mass.  96 ;  Taylor  v.  Mills,  Cowp.  525  ;  Paul  y."  Jones,  1  T.  K.  599  ; 
Uttcrson  v.  Vernon,  4  ib.  570;  Owen  on  Bankruptcy,  180;  Wells  v.  Mace,  17  Vt.  503. 
Torts  —  Shoemaker  ?'.  Koclcy,  1  Yeates,  245  ;  2  Dall.  213,  S.  C.  The  leading  case  of 
Parker  v.  Norton,  6  T.  R.  695,  where  the  doctrine  of  the  text  is  laid  down   by  the  four 

i'udges  of  the  King's  Bench.  Parker  v.  Crole,  5  Bing.  63  ;  unless  the  judgment  has 
icen  obtained  prior  to  the  issuing  of  the  decree  in  bankruptcy.  17  Vt.  512;  Comstock 
V.  Grout.  Trespass  for  Mesne  Profits  —  Goodtille  v.  North,  Doug.  584.  Lord  Mans- 
field: "  Theyijnw  of  the  action  is  decisive.  The  plaintiff  goes  for  the  whole  damage 
occasioned  by  the  tort,  and  when  damages  are  uncertain,  they  cannot  be  proved  under 
a  commission  of  bankruptcy."  But  where  the  damages  have  been  liquidated,  as  in  the 
case  of  an  action  of  trespass  for  mesne  profits,  after  a  recovery  in  ejectment,  judgment 
having  been  given  for  costs,  it  was  held  that  this  was  a  debt  provable  under  the  com- 
mission. Gulliver  v.  Drinkwater,  2  T.  R.  261.  Fiduciary  Debts  —  5  Law  Reporter, 
258.  In  the  matter  of  Brown,  ib.  259.  In  the  matter  of  Tcbbcts.  The  opinion  of  Mr. 
Justice  Story  in  this  case  is  referred  to  as  the  best  discussion  we  have  met  with,  of  this 
subject.  He  comes  to  the  conclusion,  1st.  That  fiduciary  dei)ts  are  provable  under  the 
proceedings  in  bankruptcy  equally  with  other  debts,  at  the  creditor's  election.  2d.  That 
if  the  fiduciary  creditor  elects  to  come  and  prove  his  debt  and  take  a  dividend,  he  is 
barred  of  all  other  remedy  therefor,  except  out  of  the  assets.  In  7  Met.  424,  Eisher  v. 
Currier,  it  is  said  :  "  We  consider  it  as  now  settled  that  creditors  having  fiduciary  debts, 
are  not  bound  to  come  in  under  the  commission,  and  without  their  own  consent  are 
not  bound  by  the  discharge,  but  that  they  may  come  in  and  jirove,  and  receive  a  divi- 
dend, if  they  choose,  and  if  they  do  they  are  barred  by  the  discharge.  Chapman  v. 
Forsyth,  2  How.  U.  S.  202  ;  Moore  v.  City  of  Lowell,  7  Met.  152.  A  conflict  of  opin- 
ion occurred  in  the  courts  of  the  United  States,  as  to  the  eftect  of  the  existence  of  fidu- 
ciary debts  upon  the  decree  in  bankruptcy.  In  Virginia,  it  was  held  by  Mr.  Justice 
Daniel  that  a  person  who  owes  fiduciary  debts  is  not  entitled  to  the  benefit  of  the 
bankrupt  act,  and  is  not  within  the  scoj)e  of  its  provisions,  and  cannot  be  declared  a 
bankrupt  as  long  as  he  remains  in  that  condition.  In  the  matter  of  Hardison,  5  Law 
E.  255.  In  Ohio,  it  was  held  by  Mr.  Justice  McLean,  that  no  relief  can,  under  the 
bankrupt  act,  be  given  against  a  fiduciary  debt.  But  that  the  debt  in  that  case,  having 
been  contracted  before  the  passage  of  the  bankrupt  act,  the  a]ii)licant  was  not  thereby 
deprived  of  the  benefit  of  the  act  as  to  other  debts.  In  the  matter  of  Low,  5  Law  R.- 
258.  In  the  matter  of  Brown,  above  cited,  Mr.  Justice  Thompson  took  a  middle 
ground,  which  was  confirmed  by  Judge  Story  in  the  conclusions  he  arrived  at,  in  the 
matter  of  Tebbets,  supra. 


310  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

merchant,  resident  in  England,  becomes  a  bankrupt  there  ;  that 
he  has  also  creditors  in  New  York,  and  property  there;  and  that 
after  the  proceedings  in  England,  which  certainly  vest  in  his  as- 
signees all  his  property  in  that  country,  his  creditors  in  this  country 
eittach  his  property  in  New  York.  Can  the  assignee  in  England 
set  aside  the  attachment  in  New  York  on  the  ground  that  the 
property  in  New  York  had  passed  to  the  assignee  by  force  of  the 
proceedings  in  England  before  the  attachment? 

After  some  fluctuation,  the  courts  in  England  have  settled 
down  upon  the  rule  that  the  proceedings  in  bankruptcy  in  the 
country  of  the  bankrupt's  residence,  operate  upon  his  assets  all 
over  the  world.  And  in  France  and  Holland,  and,  indeed,  among 
the  commercial  States  of  Europe  generally,  the  same  rule  pre- 
vails. It  is  based  upon  two  principles.  One  is,  that  the  system 
of  bankrupt  law  should  not  be  considered  as  local,  but  as  univer- 
sal, and  that  all  the  various  parts  of  this  system  in  different 
States  should  recognize  each  other,  and  by  their  union  form  a 
branch  of  the  jus  gentium^  of  what  may  be  called  the  private 
law  of  nations.  Another  is,  that  the  bankrupt  law,  when  it 
sequesters  the  property  of  the  bankrupt,  and  passes  it  over  to  his 
assignee,  operates  precisely  like  a  grant,  or  sale,  or  other  transfer 
of  the  bankrupt  himself,  and  should  be  regarded  as  his  own  act, 
done  by  him,  under  compulsion  of  law.' 

1  A  leading;  case  in  England  upon  this  subject,  is  that  of  Sill  v.  Worswick,  1  H.  Bl. 
665.  The  question  considered  by  the  court,  without  going  into  the  details  of  the  case, 
was  simply  whether  an  assig;nment  in  bankruptcy  in  England  carried  with  it  money  of 
the  bankrupt  in  the  Island  of  St.  Cliristopher,  where  the  laws  of  England  have  no  bind- 
ing force.  The  authorities  were  examined  at  great  length  in  the  argument,  and  by  the 
judge  who  gave  the  opinion  of  the  court.  And  Lord  Loughboronyh  said  :  "  It  is  a 
clear  proposition  not  only  of  the  law  of  England,  but  of  every  country  in  the  world, 
where  law  has  the  semblance  of  science,  that  personal  property  has  no  locality. 
The  meaning  of  that  is,  not  that  personal  property  has  no  visible  locality,  but 
that  it  is  subject  to  that  law  which  governs  the  ])erson  of  tlie  owner.  With  respect  to 
the  disposition  of  it,  witli  respect  to  the  transmission  of  it,  eitlicr  by  succession  or  the 
act  of  the  party,  it  follows  the  law  of  the  person.  The  owner  in  any  country  may 
dispose  of  his  personal  pro])erty.  If  he  dies,  it  is  not  the  law  of  the  country  in 
which  the  property  is,  but   the  law  of  the  country  of  which  he  was  a  sul)ject,  that 

will    regulate   the  succession." '•  Personal   property 

thus  being  governed  by  the  law  which  governs  the  person  of  the  owner,  the 
condition  of  a  bankrupt  by  the  law  of  this  country  is,  that  the  law,  upon  the  act 
of  bankruptcy  being  committed,  vests  his  property  upon  a  just  consideration,  —  not 
as  a  forfeiture,  not  on  a  supposition  of  a  crime  committed,  not  as  a  penalty,  —  and 
takes  tlie  administration  of  it  by  vesting  it  in  assignees,  who  apply  that  projjerty  to  the 
just  purpose  of  the  equal  payment  of  iiis  debts.  If  the  bankrupt  happens  to  have  prop- 
erty which  lies  out  of  the  jurisdiction  of  the  law  of  England,  if  the  country  in  which 
it  lies  proceeds  according  to  the  principles  of  well-regulated  justice,  there  is  no  doubt 
but  it  will  give  effect  to  the  title  of  the  assignees.  The  determinations  of  the  courts 
of  this  country  have  been  uniform  to  admit  tlie  title  of  foreign  assignees.  In  the  two 
cases  of  Solomons  v.  Ross,  and  JoUctt  v.  Depontbieu,  where  the  laws  of  Holland,  hav- 
ing, in  like  manner,  as  a  commission  of  bankruptcy  here,  taken  the  administration  of 


en.  XV.]  OF   BANKRUrTCY    AND    INSOLVENCY.  311 

In  this  country,  in  the  earliest  cases,  it  would  seem  that  our 
courts  were  disposed  to  adopt  the  English  rule.^  But  this  ten- 
dency soon  disappeared  ;  and  although  to  this  day,  wise  men 
doubt  whether  the  English  rule  is  not  the  most  reasonable  and 
just,  it  seems  to  be  admitted  that  the  American  rule  is  the  very 
opposite  of  the  English.^ 

the  property,  and  vested  it  in  persons  wlio  arc  called  Curators  of  Desolate  Estates,  the 
Court  of  Chancery  licld  tliat  they  had,  immediately  on  their  appoiiitmi'Pt,  a  title  to 
recover  the  debts  due  to  the  insolvent  in  this  country,  in  preference  to  the  dili^rence  of 
tlie  particular  creditor  seekinfi-  to  attach  those  debts.  In  those  cases  the  Court  of  Cliaa- 
ccry  felt  very  strongly  the  principle  which  I  have  stated,  that  it  has  had  a  very  univcr- 
saloljservance  among  all  nations."  The  decisive  character  of  the  Er<;lish  authorities 
on  this  point  render  a  minute  examination  of  them  in  this  note  unnecessary.  The  doc- 
trine of  the  text  will  be  found  to  be  sustained  in  the  following  cases.  In  re  Wilson, 
cited,  1  n.  Bl.  691-692;  Solomons  v.  Koss,  131,  ib.  note ;  JoUett  v.  Dupontbieu,  id.  132, 
nofe;  Neal  i'.  Cottiimham,  ib. ;  Kx  parte  Blakes,  I  Cox,  398  ;  Hunter  v.  Potts,  4  T.  R. 
182;  Smith  c.  Buchanan,  1  East, 6;  Pottery.  Brown,  5  East,  124-131  ;  Wadliam  r.  Mar- 
low,  cited,  1  II.  Bl.  437-8-9,  n. ;  S.  C.  8  East,  314-16.  note  z.  ;  Pipon  v.  Pipon,  Amb.  25, 
relied  upon  by  Chancellor  Kent  in  the  o])inion  in  Holmes  v.  Ilemscn,4  Jt)hns.  Ch.  460, 
where  the  English  doctrine  is  stated  to  be  settled.  The  important  case  of  the  Koyal  Bank 
of  Scotland,  &c.  r.  Cuthbert,  (usually  cited  as  Stein's  case.)  1  Rose's  Cases  in  Bank- 
ruptcy, 462  ;  Selkrig  v.  Davis,  2  Rose'  291  ;  S.  C.  2  Dow,  230  ;  and  see  Ex  parte  D'Obree, 
8  Ves.  82  ;  Quelin  v.  ]Moris>on,  1  Knapp,  265.  On  the  doctrine  of  the  law  of  France 
and  Holland,  see  Story  on  the  Conflict  of  Laws,  ■^^417,  and  citations  from  the  Cotitinen- 
tal  authorities.  —  Henry  on  Foreign  Law,  (Judgment  of  the  Court  of  Demarara  and 
Essequibo,  on  the  jilea  of  the  English  certificate  of  Bankruptcy  in  bar,  in  the  case  of  L. 
X.  Wm.  Odwin  y.  John  Forbes,  p.  127  to  135,  and  passim,  and  citations  there  made  from 
the  Roman  law  and  the  later  Continental  jurists.  In  this  valuable  paper,  the  English 
as  well  as  Continental  authorities  are  reviewed  with  marked  learning  and  ability. 

^  The  leading  case  in  America  which  adopts  the  English  doctrine,  is  that  of  Holmes 
V.  Remsen,  4  Johns.  Ch.  460,  which  was  decided  by  Mr.  Chancellor  Kent  in  one  of  his 
most  elaborate  and  learned  opinions.  In  it  he  reviews  and  comments  upon  all  the 
English  cases  upon  the  subject,  and  examines  the  European  authorities  at  length,  and 
gives  judgment  in  accordance  with  their  doctrine.  The  case  is  referred  to  as  throwing 
great  light  upon  the  whole  subject  of  the  Conflict  of  Laws,  in  this  matter.  Nor  is  the 
value  of  the  case  as  an  examination  of  authority  diminished  from  the  fact  that  its 
doctrines  have  been  adopted  by  very  few  of  the  courts  of  the  country.  The  court  of 
New  York  in  Bird  v.  Pierpont,  1  Johns.  118,  per  Livinr/ston,  J.,  seems  to  have  adopted 
a  similar  view.  And  in  Bird  v.  Caritat,  2  Johns.  342  ;  Goodwin  v.  Jones,  3  Mass.  517. 
And  a  similar  doctrine,  but  with  limitation,  is  laid  down  in  Ingraham  v.  Geyer,  13 
Mass.  146.  These  are  the  only  American  cases  we  have  met  with  which  give  counte- 
nance to  the  view  adopted  by  the  uniform  current  of  English  authority  for  nearly  a 
century. 

2  The  ease  of  Blake  v.  Williams,  6  Pick.  286,  has  been  said  to  be  the  leading  ease  in 
America,  aifbpting  the  view  now  generally  held  in  this  country.  The  opinion  of  the 
court  was  delivered  by  Parker,  C.  J-,  the  authorities  reviewed,  and  the  English  doctrine 
rejected.  The  following  cases  adopt  the  American  view:  Ingraham  v.  Geyer,  13  Mass. 
146;  Estate  of  Merrick,  2  Ashm.  485,  S.  C  5  Watts  &  S.  9 ;  Hlane  ?'."Drummond, 
1  Brock.  62  ;  Dawes  v.  Bovlston,  9  Mass.  337  ;  Orr  v.  Amory,  11  Mass.  25  ;  Milne  v. 
Moreton,  6  Binn.  353;  Saunders  U.Williams,  5  N.  IT.  213;  Holmes  v.  Kemsen,  20 
Johns.  229;  Marshall,  C.  J.,  in  Harrison  v.  Sterry,  5  Cranch,  289;  Harrison  v.  Sterry, 
Bee,  244.  The  leading  case  on  the  subject  of  insolvent  laws  as  atfccting  the  rights  of 
citizens  of  difterent  States:  12  Wheat.  213,  and  passim;  Plestoro  v.  Abraham, 
1  Paige,  236;  Fox  v.  Adams,  5  Greenl.  245;  Burk  v.  M'Clain,  1  H.  &  McH.  236; 
Wallace  v.  Patterson,  2  id.  463;  McNeil  v.  Colquhoon.  2  Hayw  24;  Robinson  v. 
Crowder,  4  M'Cord.  519.  The  learned  opinion  of  Ware,  J.,  in  the  case  of  The 
Watchman,  Ware,  232  ;  Very  v.  McHcnry,  29  Maine,  206  ;  Johnson  v  Hunt,  23  Wend. 
87,  where  the  doctrine  of  the  text  is  set  forth  at  length;  Taylor  v.  Geary,  Kirby,  313  ; 
Greene  v.  Mowry,  2  Bailey,  163.    In  this  case,  a  distinction  was  made,  like  that  recog- 


312  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

We  hold  in  this  country,  that  the  bankrupt  and  insolvent  law 
form  a  part  of  the  law  of  nations  in  no  sense  and  in  no  respect ; 
that  they  not  only  derive  all  their  force  from  the  authority  of  the 
State  which  enacts  them,  but  have  no  force  whatever  —  no  more 
than  any  other  local  and  municipal  law  —  beyond  the  limits  of 
that  sovereignty.' 

So  too,  our  courts  hold,  that  the  cession  of  the  bankrupt's 
assets  to  his  assignee,  is  not  to  be  regarded  as  his  own  act;  but 
rather  as  the  result  and  effect  of  his  civil  death.  He  has,  as  a  mer- 
chant, ceased  to  be.  He  has  no  longer  any  thing  to  do  with  his 
property  ;  and  does  not  possess,  and  cannot  exercise  any  more 
right  or  power  in  respect  to  it  than  a  mere  stranger.^  And  the 
principle  on  which  his  assets  are  to  be  gathered  and  distributed, 
is  the  same  which  would  be  applied  if  he  had  died  insolvent, 
and  an  administrator,  instead  of  an  assignee,  had  possession  of 
his  property.  Hence  it  follows  that  within  the  State  where  in- 
solvency goes  into  effect,  it  operates  on  all  the  property,  in  the 
same  way  that  insolvency  declared  by  probate  would  operate  on 
the  effects  of  a  dead  man  ;  that  is,  only  within  the  State  where 
it  occurs;  leaving  creditors  under  other  jurisdictions  to  get  hold 
of  other  assets  if  they  can.^ 

nized  in  the  text,  between  a  voluntary  assignment,  and  one  under  the  bankrupt  laws ; 
and  see  Bliolcn  i\  Cleveland,  5  Mason,  174.  See  two  cases  in  New  Hampshire,  decided 
witli  reference  to  the  insolvent  law  of  Massachusetts,  which  seem,  to  an  extent,  to  beat 
variance  with  the  general  current  of  American  authority.  Hall  v.  Boardman,  14  N. 
H.  38;  Hoag  v.  Hunt,  1  Fost.  106. 

1  In  the  cases  cited  in  the  preceding  note,  Saunders  v.  Williams,  5  N.  H.  215,  Richard- 
son, C.  J.,  said:  "The  rule,  which  must  give  effect  here  to  a  bankrupt  law  of  a  foreign 
countiT,  is  a  mere  rule  of  amity,  and  not  of  international  law;  and  in  the  present 
circumstances  of  this  country,  it  is  thought  that  no  rule  of  amity  can  require  us  to 
give  effect  to  a  foreign  law  of  bankruptcy  here,  in  such  a  manner  as  to  deprive  our  own 
citizens  of  the  remedy  wiiich  our  own  laws  give  tiiem  against  the  properly  of  their 
foreign  debtors,  which  may  be  found  in  this  country." 

■■^  In  6  Rinn.  .369,  Milne  v.  Moreton,  Tilghman,  C.  J.,  said:  "It  was  remarked  during 
the  argument,  that  no  good  reason  can  be  assigned  why  an  assignment  by  the  bankrupt 
himself  should  prevail,  and  not  the  present  one  as  made  by  the  commissioners,  which 
ought  to  be  considered  as  equivalent  thereto,  and  be  deemed  a  voluntary  conveyance 
made  by  the  bankru])t  himself,  for  a  valuable  consideration;  the  difference  appears  to 
me  sutHciently  obvious.  Effect  is  given  to  the  fair  assignment  of  the  bankrupt  himself, 
because  it  is  the  spontaneous  act  of  the  party  having  the  full  dominion  over  the 
property,  transferring  an  equitable,  if  not  a  legal  title  thereto,  after  which  his  interest 
therein  necessarily  ceases,  and  is  no  longer  subject  to  an  attachment.  It  is  wholly 
superfluous  to  cite  Justinian,  lib.  2,  tit.  1,  §  40,  to  siiow  that  nothing  is  more  conform- 
able to  natural  equity  than  to  confirm  the  will  of  him  who  is  desirous  to  transfer  his 
property  to  another.  But  effect  cannot  be  given  to  tlie  assignment  l)y  the  commission- 
ers, unless  we  adopt  the  British  Statutes  of  Bankruptcy  as  laws  binding  on  ourselves, 
although  they  were  not  considered  to  effect  us  when  we  were  the  colonies  of  Great 
Britain;  and  this  too,  when  their  operation  would  manifestly  interfere  with  the  interesta 
of  our  own  citizens." 

•^  The  cases  above  cited,  and  in  Holmes  v.  Remscn,  20  Johns.  265,  the  court  say: 


en.    XY.]  OP  BANKRUPTCY   AND   INSOLVENCY.  313 

With  this  exception,  liowcver,  which  is  universally  admitted. 
An  English  assignment  under  the  bankrupt  law  would  not  defeat 
the  attempt  of  a  creditor  in  New  York  to  get  hold  of  the  property 
of  the  bankrupt  that  was  there;  but  after  the  New  York  debts  and 
claims  are  satisfied,  the  English  assignee  takers  all  the  residue.' 
It  may  be  added  also,  that  the  question  and  the  difference  refer  to 
personal  goods  and  chattels  only  ;  as  real  estate  has  always  a 
place,  and  is  transferable  only  under  the  law  of  that  place.^ 

The  English  courts  do  not  intimate  that  their  bankrupt  law 
can  have  any  force,  as  law,  abroad ;  or  that  any  foreign  law  can 
have  that  force  in  England.  But  they  hold  that  international 
comity  requires  that  the  tribunals  in  each  State  shall  recognize 
this  law  and  the  proceedings  under  it,  in  every  other.  But  in  this 
country,  it  is  held  .that  this  would  be  an  unreasonable  and  exces- 
sive stretch  of  comity;  and  that  it  is  the  duty  of  our  courts  to 
protect  our  citizens  against  any  interference  with  their  rights  or  se- 
curities of  a  foreign  law,  which  was  made  neither  by  us  nor  for  us. 

"  It  is  an  established  and  nnivcrsal  rule  that,  independent  of  express  municipal  law, 
personal  property  of  foreigners  d^-ing  testate  or  intestate,  has  locality.  Administra- 
tion must  be  granted,  and  distribution  made,  in  the  country  where  the  property  is 
found  ;  and  as  to  creditors,  the  lex  rei  sitte  prevails  against  the  law  of  the  domicile,  in 
regard  to  the  rule  of  preferences.  In  principle,  I  can  perceive  no  substantial  ditferenee 
between  that  case  and  the  present.  Why  should  not  a  liberal  comity,  also,  demand 
that  the  first  grant  of  letters  of  administration  should  draw  to  it  the  disiril)ution,  among 
creditors,  of  tlie  whole  assets,  wherever  situated  ?  The  plausible  reason  for  the  dis- 
tinction, may  be  that  the  interests  of  commerce  require  a  discrimination  in  favor  of  the 
assignee  of  liankrupts.  But,  in  practice,  I  believe  it  will  be  found  that  commerce  i.s 
equally  affected  by  the  rule  in  both  cases  ;  because  the  rule,  in  either  case,  can  seldom 
be  applied,  except  to  merchants  and  traders;  and  whether  administration  be  committed 
to  the  executors  or  administrators  of  a  dead  man,  or  to  the  assignees  of  a  bankrupt,  is 
not  very  important  as  to  the  point  before  us.  Anomalies  are  inconvenient  in  the  law, 
and  should  not  be  allowed  witliout  strong  reason." 

'  Tlie  doctrine  of  the  text  is  fully  recognized  in  those  of  the  cases  above  cited  when 
the  question  was  passed  upon  directly  or  indirectly.  The  proposition  is  laid  down  in 
Merrick's  Estate,  .5  W.  &  S.  9,  and  2  Ashm.  483,  that  foreign  assignees  of  bankrupts 
may  resort  to  our  courts  to  recover  debts  due,  or  choses  in  action  belonging  to  their  bank- 
rupt, where  the  claims  of  such  assignee  do  not  conflict  with  those  of  our  citizens.  In 
Plestoro  V.  Abraham,  above  cited,  Mncy,  J.,said:  "I  do  not  understand  that  this  comity 
has  anywhere  been  so  far  withheld,  as  to  refuse  to  foreign  assignees  a  resort  to  our  courts 
in  their  character  as  assignees  or  representatives  of  the  bankrupt,  to  secure  the  rights 
they  have  acquired  by  assignment." 

■^  Oakley  r.  Bennett,  11  How.  U.  S.  33-45.  Mr.  Justice  McLean,  delivering  the 
opinion  of" the  court,  said:  "  But  it  is  an  admitted  principle  in  all  countries  where  the 
common  law  prevails,  whatever  views  maybe  entertained  in  regard  to  personal  pro]ierty, 
that  real  estate  can  be  conveyed  only  under  the  territorial  law.  The  rule  is  laid  down 
clearly  and  concisely  by  Sir  William  Grant,  in  Curtis  r.  Hutton,  14  Ves.  .'537-.')41, 
where  he  says  :  '  The  validity  of  every  disposition  of  real  estate  must  depend  upon  the 
law  of  the  country  where  that  estate  is  situated.'  The  same  rule  prevails  generally  in 
the  civil  law.  .  .  This  doctrine  has  been  uniformly  recognized  by  the  courts  of  the 
I'nited  States,  and  by  the  courts  of  the  respective  States.  The  fornr  of  conveyance 
adopted  by  each  State'  for  the  transfer  of  real  property,  must  be  observed.  This  is  a  regu- 
lation which  belongs  to  the  local  sovereignty." 

27 


814  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 

The  English  courts,  indeed,  have  recently  manifested  a  pur- 
pose—  perhaps  in  consequence  of  the  American  decisions  —  to 
limit  the  operation  of  their  rule  to  the  proceedings  under  bank- 
ruptcy in  States  which  admit  the  same  rule.  This  is  perfectly 
fair,  but  it  tends  to  reduce  this  question  of  comity  or  justice  into 
one  of  mere  expediency,  concerning  which  the  courts  and  authori- 
ties of  every  country  must  judge  for  themselves,  on  their  own  facts. 

This  question  is  much  more  important  in  this  country  than  it 
is  in  England,  because  the  numerous  States  of  the  Union  are,  in 
the  absence  of  a  national  bankrupt  law,  foreign  to  each  other,  in 
this  respect.  And  vastly  more  cases  and  questions,  involving  far 
greater  amounts  of  property,  arise  under  this  question  between 
our  States,  than  can  come  under  it  in  England,  in  reference  to 
foreign  bankrupt  laws,  or  the  operation  of  her  own  in  foreign 
States. 

It  is  an  analogous  question,  whether  a  discharge  of  the  debtor 
under  a  bankrupt  or  insolvent  law,  is  a  discharge  of  all  his  debts 
everywhere.  And  it  has  been  decided  in  a  similar  way,  that  is, 
with  a  similar  difference,  in   England  and  in    America.^     Here, 

'  The  doctrine  o'f  the  text  is  well  set  forth  b_v  Belts,  J.,  delivering  the  opinion  of  the 
court,  in  the  matter  of  Augustus  Zarcga,  4  Law  Reporter,  480 :  "  It  appears  that 
some  of  the  creditors  of  the  petitioner  reside  abroad,  and  tlie  objection  taken  by  the 
opposing  counsel  is,  that  the  discharge  of  the  bankrupt,  under  the  laws  of  this 
country,  does  not  discharge  him  from  his  creditors  residing  abroad.  The  exception  is 
taken  under  the  idea  tliat  tlie  debt  was  contracted  in  Germany,  although  I  see  no  evi- 
dence before  the  court  to  that  effect,  or  anything  to  show  but  that  the  debt  was  con- 
tracted here,  in  tlie  ordinary  course  of  business  transactions,  such  as  an  order  sent 
abroad  for  goods,  or  the  like.  It  is  not  essential  to  ascertain  the  origin  or  location  of 
the  debt.  If,  however,  the  delit  was  contracted  in  Germany,  it  might  have  an  effect  on 
the  proceedings,  when  the  final  steps  are  to  be  taken.  The  question  here  is,  whether 
the  discharge  of  a  bankrupt  under  the  law  of  this  country,  would  operate  as  a  bar  to  the 
demands  of  foreign  creditors,  it  being  asserted  tliat  tlie  United  States  have  no  power  to 
destroy  contracts  entered  into  witliout  their  jurisdiction,  and  the  contract  is  to  be  left 
to  the  jurisdiction  of  that  country  wlierein  it  originated.  It  is  not  important,  in  dis- 
posing of  this  question,  to  enter  into  a  discussion  of  the  essence  of  contracts  or  their 
obligations,  nor  to  inquire  into  the  effect  of  a  discharge  in  this  country,  under  the  bank- 
rupt law,  if  set  up  in  a  foreign  country  as  a  bar  to  the  claims  of  creditors.  In  Eng- 
land, as  well  as  in  France  and  HoHand,  and  perhaps  throughout  Europe  generally,  the 
discharge  of  a  bankrupt  under  the  laws  of  either  country,  operates  in  all  other  places  what- 
soever. So,  a  person  having  been  decreed  a  bankrupt  in  Erance,  may  avail  himself  of 
the  privileges  it  confers  on  him,  in  any  part  of  England,  and  plead  it  with  the  same 
effect  as  in  his  own  country.  So,  in  England,  where  they  set  up  that  claim  in  behalf 
of  their  own  bankrupts  in  foreign  countries,  they  allow  the  same  privileges  to  others. 
But  in  this  country  we  do  not  recognize  such  a  doctrine.  A  discharge  as  a  bankrupt 
in  a  foreign  country  is  not  deemed  liere  as  a  bar  to  any  action  that  may  be  brought. 
The  discliarge  is  considered  as  local,  and  altliough  an  assignee  of  an  individual,  de- 
clared a  bankrupt  in  a  foreign  country,  would  be  allowed  to  sue  as  such  assignee,  yet 
our  courts  would  not  recognize  the  discharge  as  a  bar  to  debts  contracted  in  this  coun- 
try, or  due  to  citizens  of  this  country."  The  doctrine  will  be  found  considered  in  the 
cases  already  cited  on  the  subject  of  assignments.     This  matter  being  considered  more 


en.  XV.]  OF   BANKRUPTCY   AND   INSOLVENCY.  315 

however,  this  very  interesting  question  is  afTected  importantly  by 
the  clause  in  the  National  Constitution,  which  prohibits  the  sev- 
eral States  from  forming  laws  which  "impair  the  obligation  of 
contracts,"  but  the  questions  which  have  arisen  upon  this  subject 
are  so  nice  and  difficult,  and  the  adjudication  in  respect  to  them 
is  so  various  and  irreconcilable,  that  in  an  elementary  work  like 
the  present,  it  will  be  impossible  to  do  more  than  give  a  very 
brief  statement  of  what  seems  to  be  the  result.  And  even  this 
must  be  stated  with  some  uncertainty. 

The  foundation  of  the  whole  is  a  distinction  introduced  by 
the  Supreme  Court  of  the  United  States,  between  the  rii^liL  of 
the  creditor,  and  his  remedy}  Thus,  a  statute  which  exempts 
the  person  of  a  debtor  from  arrest  or  imprisonment,  touches  only 
the  remedy,  and  is  constitutional,  although  applying  to  previous 
debts.  But  if  it  discharges  the  debts,  or  relieves  the  property 
from  attachment,  or  prevents  a  judgment  or  execution,  or  oper- 
ates as  a  sta.y  law,  it  affects  the  right  of  the  creditor  and  the  ob- 
ligation  of  the  debtor,  and  is  unconstitutional  unless  limited  to 
debts  subsequently  incurred.  And  if  such  a  statute  expresses  no 
distinction  of  this  sort,  it  shall  be  held  to  be  intended  to  apply 
only  to  subsequent  debts,  because  it  shall  be  held  to  be  intended 
to  be  constitutional  rather  than  otherwise.     But  if  it  expressly 

minutely  in  another  portion  of  this  worii,  we  cite  but  a  few  of  the  important  cases 
with  reference  to  discharge.  Balhintinc  v.  Golding,  Cooke's  Banlcrupt  Law  (8th  ed.), 
p.  487;  Potter  v.  Brown,  5  East,  124;  Odwin  v.  Forbes,  1  Bucii.  57  ;  Edwards  v.  Ro- 
nald, 1  Kniipp,  2G6,  note;  Hunter  v.  Potts,  4  T.  R.  182  ;  Armani  v.  Castrique,  13  M. 
&  W.  447.  Cases  Illustrating  what  is  called  the  American  doctrine,  Van  Raugh  v. 
Van  Arsdain,  3  Caines,  154 ;  Smith  v.  Smith,  2  Johns.  235 ;  Proctor  v.  Moore,  1  Mass. 
198;  Emory  v.  Greenough,  3  Dall.  369;  Braynard  v.  Marshall,  8  Pick.  196;  Betts  v. 
Bagley,  12  Pick.  580 ;  Agnew  v.  Piatt,  15  Pick.  417  ;  Savoyc  v.  Marsh,  10  Met.  594 ; 
Fiskc'r.  Foster,  id.  597  ;  Larrabee  v.  Talbott,  5  Gill,  437.  'The  opinion  of  the  court 
of  the  United  States,  in  the  leading  case  of  Ogden  v.  Saunders,  12  Wheat.  213,  et  seq., 
where  the  whole  matter  of  discharge,  with  reference  to  the  conflict  of  laws,  and  espec- 
ially witli  regard  to  the  constitutional  provision  alluded  to  in  the  text,  is  examined. 
Woodbridgc  v.  Allen,  12  Met.  470;  M'Millan  v.  M'Ncill,  4  Wheat.  209;  Tebbetts  v. 
Pickering,  5  Cush.  83.  The  courts  of  Pennsylvania  seem  to  have  adopted,  to  an  ex- 
tent, the  principles  of  comity  which  have  prevailed  in  the  English  courts,  and  hold 
that  the  same  cifect  shall  be  given  to  a  discharge  in  insolvency  in  another  State,  which 
that  State  gives  to  discharges  in  the  State  of  Pennsylvania.  Smith  v.  Brown,  3  Binn. 
201  ;  Boggs  V.  Teackle,  5  Binn.  332  ;  Walsh  v.  Nourse,  5  Binn.  381.  But  if  the  debt 
is  both  contracted  and  to  be  discharged  in  the  foreign  State,  a  discharge  there  will  bind 
the  creditor,  even  if  he  be  a  resident  of  this  country.  Shaw,  C.  J.,  in  May  v.  Breed,  7 
Cush.  15;  Sherrill  v.  Hopkins,  1  Cow.  103.  In  May  v.  Breed,  the  numerous  cases  on 
this  subjcct.are  collected  on  the  one  side  and  the  other,  and  reviewed  to  some  extent  in 
the  elaborate  and  learned  opinion  of  Mr.  Chief  Justice  Shaw.  S.  P.  Very  v.  McHenry 
29  Me.  206.  , 

.  1  Bronson  v.  Kinzie,  1  How.  311  ;  Green  v.  Biddle,  8  Wheaton,  1,  75  ;  McCracken 
V.  Hayward,  2  How.  608,  614. 


316  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XV. 

covers  all  debts,  whether  subsequent  or  prior,  equally,  it  is  uncon- 
stitutional as  to  all  subsequent  debts.^  A  State  may,  however, 
perhaps,  make  partial  exemptions,  as,  of  apparel,  tools,  or  even 
of  a  homestead,  to  a  reasonable  extent.^ 

The  courts  of  the  United  States  have  held,  that  no  State  in- 
solvent law  or  process  can  discharge  the  debts  of  the  citizens  of 
that  State,  as  against  the  citizens  of  another  State,  unless  they 
choose  to  come  into  the  assignment.^  This,  most  of  the  state 
courts,  if  not  all,  deny.  And  therefore  a  citizen,  of  New  York, 
for  example,  whose  Boston  debtor  has  become  insolvent,  and  who 
chooses  not  to  come  into  the  assignment,  but  to  sue  his  debtor, 
brings  his  action  in  the  Circuit  Court  of  the  United  States,  sit- 
ting in  Boston."*  It  is,  however,  generally  true,  that  a  discharge 
by  the  insolvent  law  of  a  State  in  which  the  contract  was  made, 
and  of  which  the  debtor  was  a  citizen  at  the  tim.e  it  was  made, 
is  valid  in  another  State.^  So  also  it  is,  if  the  discharge  be 
granted  in  a  State  where  the  contract  was  made  between  citizens 
of  that  State,  and  an  action  is  brought  in  another  State.^ 

1  Sturges  V.  Crowninshielcl,  4  Wheat.  122  ;  Mason  v.  Haile,  12  Wheat.  370;  Beers  v. 
Haughtoii,  9  Peters,  359  ;  Gray  v.  Munroe,  1  McLean,  528  :  Starr  v.  Robinson,  1 
Chip.  257 ;  Fisher  v.  Lacky,  6  Bhickf.  373 ;  Woodfin  v.  Hooper,  4  Humph.  13  ; 
Bronson  v.  Newberry,  2  Doug.  (Mich.)  38;  M'MiUan  v.  M'Neill,  4  Wheat.  209  ;  Ogden 
V.  Saunders,  12  Wheat.  213  ;  Boyle  v.  Zacharie,  6  Peters,  348  ;  Planters'  Bank  v.  Sharp, 
6  How.  328;  Mather  v.  Bush,  16  Johns.  233;  Hicks  v.  Hotchkiss,  7  Johns.  Ch.  297  ; 
Bhinchard  v.  Kussell,  13  Mass.  1 ;  Kimberly  v.  Ely,  6  Pick.  440;  Norton  v.  Cooke,  9 
Conn.  314  ;  Smith  v.  Parsons,  1  Ham.  (Ohio)  107  ;  James  v.  Stull,  9  Barb.  482  ;  Bruce 
V.  Schuyler,  4  Gilm.  221,  227  ;  Stocking  v.  Hunt,  3  Denio,  274 ;  Howard  v.  K.  &  L.  M. 
Ins.  Co.  13  B.  Monroe,  285. 

'^  The  authorities  on  this  question  are  not  uniform.  See  Quackenbush  v.  Sanks,  1 
Den.  128;  S.  C  3  id.  594  ;  and  1  Comstock,  129  ;  also  Vedder  v.  Alkenbrack,  6  Barb. 
327.  These  cases  would  limit  such  a  statute  to  subsequent  debts.  Not  so  in  Rockwell 
V.  Hubbell,  2  Doug.  (Mich.)  197.  And  see  Bronson  v.  Newberry,  2  Doug.  38  ;  Evans 
V.  Montgomery,  4  W.  &  S.  218;  Bumgardner  v.  Circuit  Court,  4  Miss.  50  ;  Tarpley  v. 
Hamer,  9  S.  &  M.  310. 

^  See  some  of  the  cases  cited  supra,  n.  1 ;  and  Cook  v.  Moffat,  5  How.  295  ;  Van  Reims- 
dyk  V.  Kane,  1  Gall.  371 ;  Hinkley  r.  Moreau,  3  Mason,  88 ;  Baker  i'.  Wheaton,  5  Mass. 
509  ;  Watson  v.  Bourne,  10  id.  337  ;  Bradford  v.  Farrand,  13  id.  18  ;  Hicks  v.  Hotch- 
kiss, 7  Johns.  Ch.  297  ;  Norton  v.  Cook,  9  Conn.  314.  As  to  what  constitutes  the 
assent  of  a  creditor,  see  Kimberly  v.  Ely,  6  Pick.  440 ;  Agrcw  v.  Pratt,  15  id.  417. 

*  See  Babcock  r.  Weston,  1  Gall.  168;  also  Braynard  v.  Marshall,  8  Pick.  194  ;  Nor- 
ton V.  Cook,  9  Conn.  314;  Pugh  v.  Bussell,  2  Blackf.  394;  WoodhuU  v.  Wagner,  1 
Baldwin,  C.  C.  R.  296 ;  Brown  v.  Stackpole,  9  N.  H.  478. 

5  Blanchard  v.  Russell,  13  Mass.  1. 

6  Pugh  V.  Bussell,  2  Blackf.  366.     See  also  May  v.  Breed,  7  Cush.  15. 


en.  XVI.]  or  the  laav  of  place.  317 


CHAPTER   XVI. 

OF   THE  LAW   OF  PLACE. 

SECTION  I. 

WHAT   IS    EMBRACED   AVITIIIN   THE   LAW   OF   PLACE, 

If  both  the  parties  to  a  contract  were  not  at  home,  and  at  the 
same  home  when  they  entered  into  it,  or  if  it  comes  into  litiga- 
tion before  a  foreign  tribunal,  then  the  rights  and  the  obligations 
of  the  parties  may  be  affected  either  by  the  law  of  the  place  of 
the  contract,  (lex  loci  contractus,)  or  by  the  law  of  the  domicile 
of  a  party,  (lex  domicilii,)  or  by  the  law  of  the  place  where  the 
thing  is  situated  to  which  the  contract  refers,  [lex  loci  rei  sites,) 
or  by  the  law  of  the  tribunal  before  which  the  case  is  litigated, 
{lex  fori.)  All  of  these  are  commonly  included  in  the  lex  loci, 
or,  as  we  translate  the  phrase,  the  Law  of  Place. 

It  is  obvious  that  this  law  must  be  of  great  importance  wher- 
ever citizens  of  distinct  nations  have  much  commercial  inter- 
course with  each  other.  But  in  this  country  it  has  an  especial 
and  very  great  importance,  from  the  circumstance  that,  while 
the  citizens  of  the  whole  country  have  at  least  as  much  business 
connection  with  each  other  as  those  of  any  other  nation,  our 
country  is  composed  of  more  than  thirty  separate  and  indepen- 
dent sovereignties,  which  are,  for  most  purposes,  regarded  by  the 
law  as  foreign  to  each  other. 


SECTION  II. 

OF  THE  GENERAL  PRINCIPLES  OP  THE  LAW  OF  PLACE. 

The  general  principles  upon  which  the  law  of  place  depends, 
are  four.     First,  every  sovereignty  can  bind,  by  its  laws,  all  per- 

27* 


318  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVI. 

sons  and  all  things  within  the  limits  of  the  State.^  Second,  no 
law  has  any  force  or  authority,  of  its  own,  beyond  those  limits.^ 
Third,  by  the  comity  of  nations,  aided  in  our  case,  as  to  the  sev- 
eral States,  by  the  peculiar  and  close  relation  between  the  States, 
and  for  some  purposes  by  a  constitutional  provision,  the  laws  of 
foreign  States  have  a  qualified  force  and  influence,  which  it  is 
perhaps  impossible  to  define  or  describe  with  precision.^  The 
fourth  of  these  general  rules  is,  that  a  contract  which  is  not  valid 
where  it  is  made,  is  valid  nowhere  else ;  and  one  which  is  valid 
where  it  is  made,  is  valid  everywhere.^ 

As  contracts  relate  either  to  movables  or  immovables,  or,  to 
use  the  phraseology  of  our  own  law,  to  personal  property  or  to 
real  property,  the  following  distinction  is  taken.  If  the  contract 
refers  to  personal  property,  (which  never  has  a  fixed  place,  and  is 
therefore  called,  in  some  systems  of  law,  movable  property,)  the 
place  of  the  contract  governs  by  its  law  the  construction  and 
effect  of  the  contract.^    But  if  the  contract  refers  to  real  property,  " 

1  See  Ruding  v.  Smith,  2  Hagg.  Consist.  Eep.  383 ;  per  Lord  Mansfield,  in  Camp- 
bell V.  Hall,  Cowp.  208. 

-  Blancliard  y.  Russell,  13  Mass.  4;  Bank  of  Augusta  u.  Earle,  13  Pet.  584;  Le  Louis, 
2  Dods.  210. 

^  Story  on  Confl.  of  Laws,  §  29,  and  note  (3.) 

*  Thus,  in  Houghton  v.  Page,  2  N.  H.  42,  where  the  contract  sued  on  was  made  in 
Massachusetts,  and  by  the  law  of  that  State  was  void,  on  the  ground  that  its  considera- 
tion was  usurious  interest,  it  was  held  that  such  contract  was  void  in  New  Hampshire 
also.  And  see  Dyer  v.  Hunt,  5  N.  H.  401 ;  Bank  of  United  States  v.  Donally,  8  Pet. 
361;  Andrews  v.  Pond,  13  id.  G5 ;  Wilcox  v.  Hunt,  id.  378;  Whiston  v.  Stodder,  8 
Mart.  9.5  ;  Andrews  v.  His  Creditors,  11  Louis.  464;  Van  Reimsdyk  v.  Kane,  1  Gall. 
371;  Robinson  y.  Bland,  2  Burr.  1077;  Touro  v.  Cassin,  1  N.  &  McCord,  173 ;  Bur- 
rows V.  Jemino,  2  Str.  733  ;  Smith  v.  Mead,  3  Conn.  253  ;  Medbury  v.  Hopkins,  id.  472; 
Pearsall  v.  Dwight,  2  Mass.  88  ;  Willings  v.  Consequa,  Pet.  C.  C.  317;  De  Sobry  v. 
l)e  Laistre,  2  H.  &  Johns.  191;  Trimbey  v.  Vignier,  1  Bing.  N.  C.  151;  Alves  v. 
Hodgson,  7  T.  R.  241.  But  it  seems,  courts  do  not  take  notice  of  foreign  revenue 
laws,  and  will  enforce  foreign  contracts  made  in  violation  of  them.  See  James  v. 
Catherwood,  3  Dowl.  &  Ry.  190;  Boucher  v.  Lawson,  Cas.  Temp.  Hardw.  85,  194; 
Biggs  V.  Lawrence,  3  T.  R.  454  ;  Clugas  v.  Penaluna,  4  T.  R.  466  ;  Holman  v.  John- 
son, Cowp.  341 ;  Planche  v.  Fletcher,  1  Doug.  251 ;  Ludlow  v.  Van  Rensselaer,  1 
Johns.  94.  See  also  Wynne  w.  Jackson,  2  Russell,  351.  If  contracts  are  made  only 
orally,  where  by  law  they  should  be  in  writing,  they  cannot  be  enforced  elsewhere 
where  writing  is  not  required  ;  but  if  made  orally  where  writing  is  not  required,  they 
can  be  enforced  in  other  countries  where  such  contracts  should  be  in  writing.  Vidal  v. 
Thompson,  11  Mart.  23 ;  Alves  v.  Hodgson,  7  T.  R.  241 ;  Clegg  v.  Levy,  3  Campb.  166. 
The  rule  laid  down  in  the  text  is  applicable  to  contracts  of  marriage.  Compton  v. 
Bearcroft,  Bui.  N.  P.  113, 114;  Medway  v.  Necdham,  16  Mass.  157;  Williams  v.  Gates, 

5  Iredell,  535;  Dickson  v.  Dickson,  1  Yerg.  110. 

s  Holmes  v.  Remsen,  4  Johns.  Ch.  460;  Harvey  v.  Richards,  1  Mason,  412;  Thome 
V.  Watkins,  2  Vcs.  Sen.  35  ;  Somerville  v.  Somerville,  5  Vcs.  750 ;  Bruce  v.  Bruce,  2  B. 

6  P.  229,  n.  (a) ;  In  re  Ewin,  1  C.  &  Jer.  156.  See  also  Milne  v.  Moreton,  6  Binn.  353, 
where  TOif/imft",  C.  J.,  states  the  rule  in  the  text  with  some  qualification.  He  says: 
"  This  proposition  is  true  in  general,  but  not  to  its  utmost  extent,  nor  without  several 
exceptions.     In  one  sense,  personal  property  has  locality,  that  is  to  say,  if  tangible  it 


en.  XVI.]  OP  THE  law  of  place.  319 

it  is  construed  and  applied  by  the  law  of  the  place  where  that 
real  property  is  situated,  without  reference,  so  far  as  the  title  is 
concerned,  to  the  law  of  the  place  of  the  contract.^ 


•      SECTION  III. 

OF    ITS    EFFKCT   UPON    THE    CArACITY   OF   PERSONS   TO    CONTKACT. 

As  to  the  capacity  of  persons  to  enter  into  contracts,  it  is  un- 
doubtedly the  general  rule,  that  this  is  determined  by  the  law  of 
his  domicile ;  and  whatever  that  permits  him  to  do,  he  may  do 
anywhere.  But  it  must  be  taken,  we  think,  —  for  the  law  on 
this  point  is  not  certainly  settled,  —  with  this  qualification,  that 
a  home  incapacity,  created  entirely  by  a  home  law,  and  having 
no  cause  or  necessity  existing  in  nature,  would  not  go  with  the 
party  into  another  country.^  Thus,  the  law  of  France  once  fixed 
the  age  of  twenty-five  as  that  of  majority.  If,  then,  a  French- 
has  a  place  in  which  it  is  situated,  and  if  invisible,  (consisting  of  debts,)  it  may  be  said 
to  be  in  the  place  where  the  debtor  resides." 

1  See  Warrender  v.  Warrender,  9  Bligh,  127;  Dundas  v.  Dundas,  2  Dow  &  Clarke, 
349;  Kerr  v.  Moon,  9  Wheat.  565;  M'Cormick  v.  Sullivant,  10  id.  192;  Darby  v. 
Mayer,  id.  465  ;  United  States  v.  Crosby,  7  Cranch,  115  :  Coppin  v.  Coppin,  2  P.  Wms. 
■291";  Cutter  v.  Devanport,  1  Pick.  81;  Ilosford  v.  Nichols,  1  Paige,  220;  Wills  v. 
Cowper,  2  Hamm.  .312.  From  these  cases  it  is  clear  that  the  title  to  land  can  only  be 
given  or  received  as  the  law  of  the  place  where  the  land  is  situated,  requires  and  deter- 
mines. In  Robinson  v.  Bland,  2  Burr.  1079,  Lord  Mansjield  applies  this  rule  to  public 
stock.  And  Mr.  Justice  Stonj,  Confl.  of  Laws,  §  383,  says  :  "  The  same  rule  may 
properly  apply  to  all  other  local  stock  or  funds,  although  of  a  personal  nature,  or  so 
made  by  the  local  law,  such  as  bank  stock,  insurance  stock,  turnpike,  canal  and  bridge 
shares,  and  other  incorporeal  property,  owing  its  existence  to,  or  regulated  by,  peculiar 
local  laws.  No  positive  transfer  can  be  made  of  sueh  property,  except  in  the  manner 
prescribed  by  the  local  regulations." 

-  In  Saul  r.  His  Creditors,  17  Mart.  597,  the  court  say  :  "  Supposing  the  case  of  our 
law  fixing  the  age  of  majority  at  twenty-five,  and  the  country  in  which  a  man  was  born 
and  lived,  previous  to  his  coming  here,  placing  it  at  twenty-one,  no  objection  could  be, 
perhaps,  made  to  the  rule  just  stated  ;  and  it  may  be,  and  we  believe  would  be  true, 
that  a  contract  made  here  at  any  time  between  the  two  periods  already  mentioned, 
would  bind  him.  But  reverse  the  facts  of  this  case,  and  suppose,  as  is  the  truth,  that 
our  law  placed  the  age  of  majority  at  twenty-one  ;  that  twenty-five  was  the  period  at 
which  a  man  ceased  to  be  a  minor  in  the  country  where  he  resided,  and  that  at  the  age 
of  twenty-four,  he  came  into  this  State,  and  entered  into  contracts, —  would  it  be  per- 
mitted that  he  should,  in  our  courts,  and  to  the  demand  of  one  of  our  citizens,  plead, 
as  a  protection  against  his  engagements,  tlie  laws  of  a  foreign  country,  of  which  the 
people  of  Louisiana  had  no  knowledge,  and  would  we  tell  them  that  ignorance  of  for- 
eign laws,  in  relation  to  a  contract  made  here,  was  to  prevent  them  enforcing  it,  though 
the  agreement  was  binding  by  those  of  their  own  State  1  Most  assuredly  we  would 
not.  16  IMartin,  193.  Take  another  case.  By  the  laws  of  this  country,  slavery  is 
permitted,  and  the  rights  of  the  master  can  be  enforced.  Suppose  the  individual  sub- 
ject to  it  is  carried  to  England  or  Mass'acliusetts,  would  their  courts  sustain  the  argu- 
ment that  his  state  or  condition  was  fixed  by  the  laws  of  his  domicile  of  origin  1  We 
know  they  would  not." 


320  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XVI. 

man,  in  England  or  in  this  country,  twenty-four  years  old,  made 
a  purchase  of  goods,  and  gave  his  note  for  it,  we  have  no  doubt 
that  note  would  be  valid  where  it  was  made.  But  if  a  woman, 
nineteen  years  of  age,  whose  home  was  in  Vermont  where 
women  are  of  age  at  eighteen,  made  in  Massachusetts  her  note 
for  ffoods,  we  incline  to  think  this  note  could  not  be  enforced  in 
Massachusetts ;  but  if  a  woman  of  that  age  went  from  Massa- 
chusetts into  Vermont,  and  there  made  her  note,  we  think  it 
could  be  sued  there  successfully.  If  this  last  note  were  sent  back 
to  Massachusetts,  and  there  put  in  suit,  we  think  the  note  should 
be  open  to  no  defence  there  that  could  not  be  urged  where  the 
note  was  made,  (unless  it  was  expressly  to  be  paid  in  Massachu- 
setts ;)  but  it  is  quite  possible  that,  as  the  law  of  the  domicile 
and  the  law  of  the  place  of  the  contract  were  in  conflict,  that 
would  prevail  which  was  also  the  law  of  the  forum,  and,  there- 
fore, such  a  note  might  not  be  enforced  by  the  courts  in  Massa- 
chusetts.^ 


SECTION  IV. 

OF  THE  PLACE  OP  THE  CONTRACT. 

A  contract  is  made  when  both  parties  agree  to  it,  and  not  be- 
fore. It  is  therefore  made  ivhere  both  parties  agree  to  it,  if  this 
is  one  place.  But  if  the  contract  be  made  by  letter,  or  by  separ- 
ate signatures  to  an  instrument,  the  contract  is  then  made  where 
that  signature  is  put  to  it  or  that  letter  is  written,  which  in  fact 
completes  the  contract  ;2  and  it  is  the  law  of  this  place  of  con- 

1  In  Saul  V.  His  Creditors,  17  Mart.  595,  the  court  say:  "No  nation  will  suffer  the 
laws  of  anotlier  to  interfere  with  her  own,  to  the  injury  of  her  citizens;  whether  they  do 
or  not,  must  depend  upon  the. condition  of  the  country  in  which  the  foreign  law  is 
sought  to  bo  enforced  —  the  particular  nature  of  her  legislature  —  her  policy,  and  the 
character  of  her  institutions.  In  the  conflict  of  laws,  it  must  be  often  a  matter  of  doubt 
which  should  prevail,  and  whenever  that  doubt  does  exist,  the  court  which  decides  will 
prefer  the  Jaw  of  its  own  country  to  that  of  a  stranger." 

^  See  Chapter  on  Agreement  and  Assent.  In  M'Intyre  v.  Parks,  3  Met.  207,  it  was 
held,  tliat  where  a  proposal  to  purcliase  goods  is  made  by  letter  sent  to  another  State, 
and  is  there  assented  to,  tlie  contract  of  sale  is  made  in  that  State,  and  if  it  is  valid  by  the 
laws  of  the  latter  State,  it  will  be  enforced  in  the  State  whence  the  letter  was  sent, 
although  it  would  have  been  invalid  if  made  there.  Where  A,  in  America,  orders 
goods  from  England,  and  the  English  merchant  executes  the  order,  the  contract  is 
governed  by  the  law  of  England,  for  the  contract  is  there  consummated.  Whiston  v. 
Stodder,  8  Mart.  95.  And  see  Sortwell  v.  Hughes,  1  Curtis,  244 ;  Orcutt  v.  Nelson, 
1  Gray,  536. 


i 


CH.  XVI.]  OF   THE    LAW   OP   PLACE.  321 

tract,  as  we  have  seen,\vliic'li,  in  general,  determines  its  construc- 
tion, and  its  force  and  eft'ect.  But  this  rule  is  subject  to  a  very 
important  qualification,  when  the  contract  is  made  in  one  place, 
and  is  to  be  performed  in  another  place  ;  for  then,  in  general,  the 
law  of  this  last  place  must  determine  the  force  and  effect  of  the 
contract,  for  the  obvious  and  strong  reason,  that  parties  who 
agreed  that  a  certain  thing  should  be  done  in  a  certain  place,  in- 
tended that  a  legal  thing  should  be  done  there,  and  therefore  bar- 
gained with  reference  to  the  laws  of  the  place,  not  in  which 
they  stood,  but  in  which  they  were  to  act.' 

But,  for  many  commercial  transactions,  both  of  these  rules 
seem  to  be  in  force ;  or  rather  to  be  blended  in  such  a  way  as  to 
give  the  parties  an  option  as  to  what  shall  be  the  place  of  the 
contract,  and  what  the  rule  of  law  which  shall  apply  to  it.  Thus, 
a  note  written  in  Boston,  and  expressly  payable  in  Boston,  is,  to 
all  intents  and  purposes,  a  Boston  note  ;  and  if  more  than  six  per 
cent,  interest  is  promised,  it  is  usurious,  whatever  may  be  the 
domicile  of  the  parties.  If  made  in  Boston,  and  no  place  of  pay- 
ment is  expressed,  it  is  payable  and  may  be  demanded  any- 
where,2  but  would  still  be  a  Boston  note.  But  if  expressly  pay- 
able in  California,  (where  there  are  at  this  time  no  usury  laws,) 
and  promising  to  pay  twenty  per  cent,  interest,  we  are  strongly 
of  opinion  that  when  payment  of  the  note  was  demanded  in 
California,  the  promise  of  interest  would  be  held  valid.  So,  if 
the  note  were  made  in  California,  payable  in  Boston,  and  prom- 
ising to  pay  twenty  per  cent,  interest,  we  think  it  would  not  be 
usurious.  In  other  words,  if  a  note  is  made  in  one  place,  but  is 
payable  in  another,  the  parties  have  their  option  to  make  it  bear 
the  interest  which  is  lawful  in  either  place.^     If  the  note  made 

'  Per  Lord  Ma7isjidd,  in  Robinson  v.  Bland,  2  Burr.  1077  ;  Baldwin,  J.,  in  Strother 
V.  Lnras,  12  Tet.  410,  436;  Andrews  i'.  Pond,  13  id.  65;  Cox  v.  United  States,  6 
Pet.  172;  Bell  r.  Bruen,  1  How.  182  ;  Prentiss  v.  Savage,  13  Mass.  23  ;  Thompson 
r.  Keteliam,  8  Jolins.  189  ;  Fanning  v.  Consequa,  17  Johns.  511  ;  LeBreton  v.  Miles, 
8  Paige,  261.  In  this  last  case,  the  prineiple  was  applied  to  an  antenuptial  contract, 
and  it  was  held,  that  when  parties  marry  in  reference  to  the  laws  of  another  country  as 
their  intended  domicile,  the  law  of  the  intended  domicile  governs  the  construction  of 
their  marriage  contract  as  to  the  rights  of  personal  pro])erty. 

2  Blake  v.  Williams,  6  Pick.  286 ;  Braynard  v.  Marshall,  8  id.  194. 

3  Depau  r.  Humphreys,  20  Mart.  1  ;  Pecks  v.  Mayo,  14  Vt.  33.  This  last  case 
was  an  action  of  assumpsit  on  two  promissory  notes  given  by  Horatio  Gates  &  Co.,  of 
Montreal,  to  the  defendants,  payable  in  Albany,  N.  Y.,  and  by  the  defendants  indorsed 
to  the  pUiintiffs.  It  appeared  that  the  notes  were  made  at  ilontreal,  where  the  makers 
resided,  and  that  the  indorsers  and  the  plaintiffs  resided  in  Vermont.  The  lawful  rate 
of  interest  iu  Montreal  was  six  per  cent,  i^er  annum,  and  in  New  York,  seven  per  cent. 


322  ELEMENTS  OF  MERCANTILE  LAW.        [CH.  XVI. 

ill  Boston  and  payable  in  California,  were  demanded  in  Califor- 
nia and  unpaid,  and  afterwards  put  in  suit  in  Massachusetts,  and 
personal  service  made  on  the  promisor  there,  we  should  say  that 
this  same  interest  should  be  recovered.  And  indeed,  generally, 
that  such  a  note,  being  made  in  good  faith,  should  always  bear 
this  interest.  So  if  made  in  Boston,  and  payable  in  New  York, 
with  seven  per  cent,  interest.  But  a  note  made  in  Boston,  and 
intended  to  be  paid  in  Boston,  and  bearing  seven  per  cent,  in- 
terest, could  not  escape  the  usury  laws  of  Massachusetts  merely 
by  being  written  payable  in  New  York. 

In  everything  relating  to  process  and  remedy,  the  law  of  the 
forum,  or  of  the  place  where  the  suit  is  brought,  prevails  over 
every  other.'     This  is  true  not  only  of  arrest,^  but  limitation  and 

Eedjield,  J.,  after  examining  all  the  authorities,  said  :  "  From  all  which,  I  consider  the 
following  rules  in  regard  to  interest  on  contracts  made  in  one  country,  to  be  executed 
in  another,  to  be  well  settled  :  1.  If  a  contract  be  entered  into  in  one  place,  to  be  per- 
formed in  another,  and  the  rate  of  interest  differs  in  the  two  countries,  tiie  parties  may 
stipulate  for  the  rate  of  interest  of  either  country,  and  thus,  by  their  own  express  con- 
tract, determine  with  reference  to  the  law  of  which  country  that  incident  of  the  contract 
shall  be  decided.  2.  If  the  contract  so  entered  into,  stipulate  for  interest  generally,  it 
shall  be  the  rate  of  interest  of  the  place  of  payment,  unless  it  appear  the  parties  in- 
tended to  contract  with  reference  to  the  law  of  t'lie  other  place.  3.  If  the  contract  be 
so  entered  into  for  money,  payable  at  a  place  on  a  day  certain,  and  no  interest  be  stip- 
ulated, and  payment  be  delayed,  interest,  l>y  way  of  damages,  shall  be  allowed,  accord- 
ing to  the  law  of  the  place  of  payment,  where  the  money  may  be  supposed  to  have  beea 
required  by  the  creditor  for  use,  and  where  he  might  be  supposed  to  have  borrowed 
money  to  supply  the  deficiency  thus  occurring,  and  to  have  paid  the  rate  of  interest  of 
that  country."  See  also  Chapman  i:  Robertson,  6  Paige,  627  ;  2  Parsons  on  Con. 
95,  et  seq.  See,  generally,  Boyce  v.  Edwards,  4  Peters,  111  ;  Fanning  v.  Consequa,  17 
Johns,  ."ill  ;  Winthrop  v.  Carleton,  12  Mass.  4;  Foden  v.  Sharp,  4  Johns.  183  ;  Uewar 
v.  Span,  3  T.  R.  425. 

1  Thus,  in  a  suit  between  A  &  B,  both  resident  in  England,  on  a  contract  made  be- 
tween them  in  Portugal,  the  contract  is  to  be  interpreted  according  to  the  laws  of  Por- 
tugal, but  the  remedy  must  be  taken  according  to  the  laws  of  England  where  the  suit 
is  brought ;  that  is,  A  could  arrest  B  in  England  for  a  debt  which  accrued  in  Portugal, 
while  both  resided  there,  although  the  Portuguese  law  does  not  allow  of  arrest  for 
debt.  De  La  Vega  v.  Vianna,  1  B.  &  Ad.  284.  See  also,  Robinson  v.  Bland,  2  Burr. 
1077 ;  Smith  v.  SpinoUa,  2  Johns.  198  ;  Nash  v.  Tapper,  1  Caines,  402  ;  Don  v.  Lipp- 
man,  5  CI.  &  Fin.  1  ;  British  Linen  Co.  v.  Drummond,  10  B.  &  Cr.  903  ;  Trimbey  v. 
Viegnier,  I  Bing.  N.  C.  151,  159;  Van  Reimsdyk  v.  Kane,  1  Gall.  371  ;  Jones  v.  Hook, 
2  Rand.  303;  Lodge  v.  Phelps,  1  Johns.  Cas.  139  ;  2  Gaines's  Gas.  in  p]rror,  321  ;  Peck 
V.  Hozier,  14  Johns.  346;  Wilcox  v.  Hunt,  13  Pet.  378;  Pickering  v.  Fisk,  6  Vt.  102. 
In  New  York,  where  a  seal  is  necessary  to  constitute  a  deed,  an  action  of  covenant  will 
not  lie  on  a  contract  to  be  performed  in  Pennsylvania,  with  a  scrawl  and  tlie  word  seal 
in  the  locus  sigilli,  though  by  the  law  of  Pennsylvania,  this  constitutes  a  seal.  The 
form  of  action  relates  to  the  remedy  and  is  governable  by  the  lex  fori.  Andrews  v.  Har- 
riot, 4  Cow.  508,  overruling  Meredith  v.  Hinsdale,  2  Caines,  362.  And  see  Bank  of 
United  States  v.  Donnally,  8  Pet.  361  ;  Douglas  v.  Oldham,  6  N.  II.  150  ;  Trasher  v. 
Everhart,  3  Gill  &  Johns.  234;  Adam  v.  Kerr,  1  B.  &  P.  360. 

"  See  De  La  Vega  v.  Vianna,  stated  supi-a.  In  Hinkley  v.  Marean,  3  Mason,  88,  it  was 
held,  that  a  discharge  of  the  person  and  present  estate  under  the  insolvent  acts  of 
Maryland  could  not  be  pleaded  in  bar  of  a  suit  in  the  Circuit  Court  in  Massachusetts, 
so  as  to  discharge  the  party  from  the  common  execution.  Story,  J.,  said:  "  Wiicn  the 
right  exists,  the  remedy  is  to  be  pursued  according  to  the  lex  fori  where  the  suit  is 


CH.  XVI.]  OF  THE  LAW  OF  PLACE.  823 

prescription.  Thus,  a  foreigner,  bringing  in  Massachusetts  an 
action  on  a  simple  contract  debt  more  than  six  years  after  it  ac- 
crued, would  find  his  action  barred  by  our  statute  of  limitation,- 
although  the  debt  accrued  in  his  own  country,  where  there  might 
be  a  longer  limitation  or  none  at  all.' 


SECTION  V. 

OF    DOailCILE. 

It  is  sometimes  important,  and  equally  difficult,  to  determine 
where  a  person  has  his  domicile.  In  general,  it  is  his  residence  ; 
or  that  country  in  which  he  permanently  resides.  He  may 
change  it,  by  a  change  of  place,  both  in  fact  and  in  intent,  but 
not  by  either  alone.^     But  his  words  or  declarations  are  not  the 

brought."  See  also,  Imlay  v.  EUefsen,  2  East,  453;  Peck  r.  Hozier,  14  Johns.  346; 
Titus  V.  Hobart,  5  JNIason,  378;  Woodbiidgc  v.  Wright,  3  Conn.  523  ;  Atwater  v.  Town- 
send,  4  Conn.  47  ;  Smith  v.  Hcaly,  id.  49:  Whittemore  v.  Adams,  2  Cow.  626;  Smith  v. 
SpinoUa,  2  Johns.  198. 

1  Nash  u.  Tupper,  1  Caines,  402;  Banlc  of  United  States  v.  Donally,  8  Pet.  361  ; 
Eugglcs  r.  Keeler,  3  Johns.  2G3;  Decouche  v.  Savcticr,  3  Johns.  Ch.  190;  Dupleix  i-. 
De  Rovcn,  2  Vern.  540;  Lincoln  v.  Battellc,  6  Wend.  475;  M'Elmoyle  v.  Cohen,  13 
Pet.  312;  Le  Roy  i-.  Crowninshield,  2  Mason,  151 ;  Van  Eeimsdyk  u.  Kane,  1  Gall.  137  ; 
British  Linen  Co.  r.  Drummond,  10  B.  &  Cr.  903.  Where  the  Statute  of  Limitations 
of  New  York  was  pleaded  in  bar  of  an  action  brought  in  Connecticut,  on  a  contract 
entered  into  in  New  York,  by  parties  residing  there  at  the  time,  it  was  held  that  the 
plea  was  insufficient,  that  the  lex  fori  prevails.  Medbury  v.  Hopkins,  3  Conn.  472.  And 
see  Pearsall  v.  Dwight,  2  Mass.  84;  Williams  v.  Jotics,  13  East,  439.  In  Bulger  v. 
Roche,  11  Pick.  36,  Shaw,  C.  J.,  said : — "That  the  law  of  limitation  of  a  foreign 
country  cannot  of  itself  be  pleaded  as  a  bar  to  an  action  in  this  Commonwealth  seems 
conceded,  and  is  indeed  too  well  settled  by  authority  to  be  drawn  in  question.  Byrne 
r.  Crowninshield,  17  Mass.  55.  The  authorities,  both  from  the  civil  and  the  common 
law,  concur  in  fixing  the  rule,  that  the  nature,  validity,  and  construction  of  contracts 
is  to  be  determined  by  the  law  of  the  place  where  the  contract  is  made,  and  tliat  all 
remedies  for  enforcing  such  contracts  are  regulated  by  the  law  of  the  place  where  such 
remedies  are  pursued.  Whether  a  law  of  prescription  or  statute  of  limitation,  which 
takes  away  every  legal  mode  of  recovering  a  debt,  shall  be  considered  as  affecting  the 
contract  like  payment,  release,  or  judgment,  which  in  effect  extinguish  the  contract,  or 
whether  they  are  to  be  considered  as  affecting  the  remedy  on!}-  by  determining  tRe 
time  within  which  a  particular  mode  of  enforcing  it  shall  be  pursued,  were  it  an  open 
question,  might  be  one  of  some  difficulty.  It  was  ably  discussed  upon  general  princi- 
ples in  a  late  case.  (Le  Roy  r.  Crowninshield,  2  Mason's  Rep.  151),  before  the  Cir- 
cuit Court,  in  which,  however,  it  was  fully  conceded  by  the  learned  judge,  upon  a  full 
consideration  and  review  of  all  the  authorities,  that  it  is  now  to  be  considered  a  settled 
question."  But  see  Don  v.  Lippman,  5  CI.  &  Fin.  1 6  ;  Huber  v.  Steiner,  2  Bing.  N.  C.  202. 

2  Not  merely  by  intention,  as  we  see  from  Hallowell  v.  Saco,  5  Grcenl.  143;  The 
Attorney-General  r.  Dunn,  6  M.  &W.  511 ;  The  Stater.  Hallett,  8  Ala.  159  ;  Williams 
I'.  Whiting,  11  Mass.  423.  Nor  merely  by  au  absence,  without  the  intent  of  remaining. 
Granby  v.  Amherst,  7  INIass.  1 ;  Lincoln  v.  Hapgood,  11  Mass.  350;  W^ilton  r.  Fal- 
mouth, 15  Maine,  479;  Harvard  College  v.  Gore,  5  Pick.  370 ;  Cadawalader  v.  Howell, 
3  Harr.  (N.J.)  138.  One  may  have  his  domicile  in  one  place,  and  yet  dwell  for  a  large 
part  of  his  time  in  another.  Frost  v.  Brisbin,  19  Wend.  11.  But  no  person  can  have  more 


324  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVI. 

only  evidence  of  his  intent ;  and  they  are  much  stronger  evidence 
when  against  his  interest  than  when  they  are  in  his  favor.  Thus, 
one  goes  from  Boston  to  England.  If  he  goes  intending  not 
merely  to  travel,  but  to  change  his  residence  permanently,  and 
not  to  return  to  this  country  unless  as  a  visitor,  he  changes  his 
domicile  from  the  day  that  he  leaves  this  country.  Let  us  sup- 
pose, however,  that  he  is  still  regarded  by  our  assessors  as  residing 
here  although  travelling  abroad,  and  is  heavily  taxed  accord- 
ingly. If  he  can  prove  that  he  has  abandoned  his  original 
home,  he  escapes  from  the  tax  which  he  must  otherwise  pay.^ 
Now,  his  declarations  that  he  has  no  longer  a  home  here,  and 
that  his  residence  is  permanently  fixed  in  England,  and  the 
like,  would  be  very  far  from  conclusive  in  his  favor,  and  could 
indeed  be  hardly  received  as  evidence  at  all,  unless  they  were 
connected  with  facts  and  circumstances.^  But  if  it  could  be 
shown  that  he  had  constantly  asserted  that  he  was  still  an  Amer- 
ican, that  he  had  no  other  permanent  residence,  no  home  but  that 
which  he  had  temporarily  left  as  a  traveller,  such  declarations 
would  be  almost  conclusive  against  him.  In  general,  such  a 
question  would  be  determined  by  all  the  words  and  acts,  the  ar- 
rangement of  property  at  home,  the  length  and  the  character  of 
the  residence  abroad,  and  all  the  facts  and  circumstances  which 
would  indicate  the  actual  intention  and  understanding  of  the 
party.^ 

than  one  domicile.  Crawford  i\  Wilson,  4  Barb.  504 ;  Abington  v.  North  Bridge- 
water,  23  Pick.  170.  It  is  agreed  that  "residency"'  and  "inhabitancy"  mean  the  same 
thing.  Roosevelt  v.  Kellogg,  20  Johns.  208.  "in  the  matter  of  Wrigley,  4  Wend. 
602,  8  id.  134.  But  as  to  the  meaning  of  domicile,  see  Thomdike  i'.  The  City  of  Bos- 
ton, 1  Met.  242,  where  the  court  said,  —  "  If  a  seaman  without  family  or  property,  sails 
from  tlie  place  of  iiis  nativity,  which  may  be  considered  his  domicile  of  origin,  although 
he  may  return  only  at  long  intervals,  or  even  be  absent  for  many  years,  yet  if  he  does 
not,  by  some  actual  residence  or  other  means,  acquire  a  domicile  elsewhere,  he  retains 
his  domicile  of  origin."  So  in  Crawford  v.  Wilson,  4  Barb.  522,  where  the  court  put 
srfldiers  and  seamen  on  the  same  footing  with  foreign  ministers  in  respect  to  domicile. 
And  see  Sears  v.  The  City  of  Boston,  1  Met.  250;  Jefferson  v.  Washington,  19  Maine, 
293.     In  the  matter  of  Thompson,  1  Wcnd.  45  ;  McDaniel  v.  King,  5  Cush.  473. 

1  Thomdike  >j.  The  City  of  Boston,  1  Met.  242. 

^  Id.  Sears  v.  The  City  of  Boston,  1  Met.  250. 

3  In  Shelton  r.  Tiffin,  6  IIow.  185,  the  court  said:  "  On  a  change  of  domicile  from 
one  State  to  another,  citizenship  may  depend  upon  the  intention  of  the  individual. 
But  this  intention  may  be  shown  more  satisfactorily  by  acts  than  declarations.  An 
exercise  of  the  right  of  suffrage  is  conclusive  on  the  subject;  but  acquiring  a  riglit  of 
suffrage,  accompanied  by  acts  which  show  a  permanent  location,  unexplained  may  be 
sufficient."     See  also  Bruce  v.  Bruce,  2  B.  &  P.  229,  n.  (a). 


en.  xvn.]  OF  the  law  of  shipping.  325 


CHAPTER    XVII. 
OF  THE  LAW  OF   SHIPPING. 

SECTION  I. 

OF   THE   OWNERSHIP   AND   TRANSFER   OF    SHIPS. 

The  Law  of  Shipping  may  be  considered  under  three  divi- 
sions. First,  as  to  ownership  and  transfer  of  ships.  Second,  as 
to  the  employment  of  ships  as  carriers  of  goods,  or  passengers,  or 
both.  Third,  as  to  the  navigation  of  ships.  We  begin  with  the 
first  topic. 

Ships  are  personal  property  ;  or,  in  other  words,  a  ship  is  a 
chattel ;  and  yet  its  ownership  and  transfer  are  regulated  in  this 
country  by  rules  quite  analogous  to  those  which  apply  to  real 
property. 

The  Constitution  of  the  United  States  gives  to  Congress  the 
power  to  enact  laws  for  the  regulation  of  commerce.  And  in 
execution  of  this  power,  acts  were  passed  in  1792,  and  immedi- 
ately after,  which  followed  substantially,  (with  one  important  ex- 
ception, to  be  hereafter  noticed)  the  Registry  and  Navigation 
Laws  of  England,  one  of  which  had  been  in  force  about  a  cen- 
tury and  a  half,  and  to  which  it  was  supposed  that  the  commer- 
cial prosperity  of  England  was  in  a  great  measure  due.^ 

To  secure  the  evidence  of  the  American  character  of  a  vessel, 
the  statute  of  1792  provides  for  an  exact  system  of  registration 
in  the  custom-house.      There  is  no  requirement  of  registration. 

1  The  first  statute  regulating  the  registry  of  shipping  in  England,  appears  to  have 
been  the  12  Car.  2,  c.  18,  s.  10,  A.  D.  1660.  But  tiie  most  important  one,  and  that 
from  which  our  own  statute  on  that  subject  was  for  the  most  ))art  taken,  M-as  the  26 
Geo.  3,  c.  60.  A  Ship  Registry  Act  was  passed  by  Congress,  September  1,  1789,  ch. 
11,  (1  U.  S.  Stats,  at  Large,  55.)  But  the  act  now  in  force,  regulating  the  registry  of 
vessels,  was  passed  December  31,  1792,  ch.  45,  (1  U.  S.  Stals.  at  Large,  287.)  Acts, 
additional  or  amendatory  to  the  above  have  been  passed  at  various  times  since.  March  2, 
1797,  ch.  61,  (1  U.  S.  Stats,  at  Large,  498) ;  June  27,  1797,  ch.  5,  (1  U.  S.  Stats,  at 
targe,  523);  March  2,  1803,  ch.  71,  (2  U.  S.  Stats,  at  Large,  209,  210) ;  March  27, 
1804,  ch.  52,  (2  U.  S.  Stats,  at  Large,  296,  297) ;  March  3,  1813,  ch.  192;  July  29,  ' 
1850,  ch.  27.  For  the  origin  of  Navigation  Laws,  see  Kceves's  Hist,  of  Shipping,  p. 
35;  1  Brown's  Civ.  &  Ad.  Law,  p.  125. 

28 


326  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

The  law  dors  not  say  that  any  ship  shall  or  must  be  registered; 
but  that  certain  ships  or  vessels  may  be.  And  the  disadvantage 
of  being  without  registry  operates  as  effectually  as  positive  re- 
quirement with  a  heavy  penalty  could  do. 

The  ships  which  may  be  registered,  are  those  already  regis- 
tered, 31  Dec.  1792,  under  the  act  of  Sept.  1789;  those  built 
within  the  United  States,  and  owned  wholly  by  citizens  thereof; 
and  those  captured  and  condemned  as  prizes,  or  adjudged  for- 
feited by  violation  of  law,  if  owned  wholly  by  citizens  of  this 
country.  No  ship  can  be  registered,  if  an  owner  or  part  owner 
usually  reside  abroad,  although  a  citizen,  unless  he  be  a  consul 
of  the  United  States,  or  agent  for,  and  a  partner  in,  a  mercantile 
house  established  and  doing  business  here  ;  ^  nor  if  the  master  be 
not  a  citizen  of  the  United  States;^  nor  if  the  owner  or  part 
owner  be  a  naturalized  citizen,  and  reside  in  the  country  whence 
he  came  more  than  a  year,  or  in  any  foreign  country  more  than 
two  years,  unless  he  be  consul  or  public  agent  of  the  United 
States.  But  a  ship  which  has  lost  the  benefits  of  registry,  by  the 
non-residence  of  an  owner  in  such  a  case,  may  be  registered 
anew  if  she  become  the  property  of  a  resident  citizen,  by  bond 
fide  purchase; 3  nor  can  a  ship  be  registered  which  has  been,  at 
any  time,  the  property  of  an  alien,  unless  she  becomes  the  prop- 
erty of  the  original  owner  or  his  representative.* 

Sometimes  Congress,  by  special  acts,  permits  the  registration, 
as  an  American  ship,  of  a  vessel  which  has  become,  by  purchase, 
American  property.  If  a  registered  American  ship  be  sold  or  trans- 
ferred, in  whole  or  in  part,  to  an  alien,  the  certificate  of  registry 
must  be  delivered  up,  or  the  vessel  is  forfeited;  but  if,  in  case  of  a 
sale  in  part,  it  can  be  shown  that  any  owner  of  a  part  not  so  sold 

1  Act  of  Dec.  31,  1792,  ch.  45,  §§  1,2,  (1  U.  S.  Stats,  at  Larjrc,  288.)  The  owner  of 
the  legal  interest  only  is  entitled  to  a  register,  unless  the  equitable  interest  belong  to 
foreigners.     Weston  v.  Penniman,  1  Mason,  306. 

2  Act  of  Dec.  31,  1792,  ch.  45,  §4,  (1  U.  S.  Stats-,  at  Large,  288.)  But  the  master,  if 
a  native  citizen  of  the  United  States,  may  reside  in  a  foreign  country.  United  States  v. 
Gillies,  Pet.  C.  C.  159. 

3  Act  of  March  27,  1804,  c.  52,  §  1,  (2  U.  S.  Stats,  at  Large,  296,  297.) 

*  Act  of  June  27,  1797,  c.  5,  (1  U.  S.  Stat,  at  Large,  523) ;  Act  of  March  27,  1804, 
c.  52,  §  2,  (2  U.  S.  Stats,  at  Large,  296,  297.)  If  an  American  vessel  is  assigned  to 
■  a  foreigner,  she  loses,  ipso  facto,  her  American  character.  United  States  v.  Willings,  4 
Dall,  374;  Philips  v.  Ledlcy,  1  Wash.  C.  C.  229.  The  more  natural  construction  of 
the  act  of  1797,  c.  5,  would  seem  to  exclude  a  vessel  which  has  been  sold  to  a  foreign- 
er, from  the  benefits  of  registrj-,  even  if  it  should  come  back  into  the  hands  of  the  origi- 
nal owner ;  but  in  practice  the  act  seems  to  have  been  construed  otherwise.  But  see 
United  States  v.  Willings,  4  Cranch.  48,  per  Marshall,  C.  J. 


I 


en.  xvn.]  OF  the  law  of  shipping.  327 

was  ignorant  of  the  sale,  his  share  shall  not  be  subject  to  such  for- 
feiture.i  And  as  soon  as  a  registered  vessel  arrives  from  a  foreign 
port,  her  documents  must  be  deposited  with  the  collector  of  the 
port  of  arrival,  and  the  owner,  or,  if  he  does  not  reside  within  the 
district,  the  master,  must  make  oath  that  the  register  contains  the 
names  of  all  persons  who  are  at  that  time  owners  of  the  ship,  and 
at  the  same  time  report  any  transfer  of  the  ship,  or  of  any  part, 
that  has  been  made  within  his  knowledge  since  the  registry;  and 
also  declare  that  no  foreigner  has  any  interest  in  the  ship.^  If  a 
register  be  issued  fraudulently,  or  with  the  knowledge  of  the 
owners,  for  a  ship  not  entitlecl  to  one,  the  register  is  not  only  void, 
but  the  ship  is  forfeited.^  If  a  new  register  is  issued,  the  old  one 
mtist  be  given  up ;  "*  but  where  there  is  a  sale  by  process  of  law, 
and  the  former  owners  withhold  the  register,  the  secretary  of  the 
treasury  may  authorize  the  collector  to  issue  a  new  one.^  If  a 
ship  be  transferred  while  at  sea,  or  abroad,  the  old  register  must 
be  given  up,  and  all  the  requirements  of  law,  as  to  registry,  &c., 
be  complied  with,  within  three  days  after  her  arrival  at  the  home 
port.^ 

Exclusive  privileges  have  at  various  times  been  granted  to 
registered  vessels  of  the  United  States.  By  the  statute  of  1817, 
it  is  provided,  that  no  merchandise  shall  be  brought  from  any 
foreign  country  to  this,  except  in  American  vessels,  or  in  vessels 
belonging  to  that  country  of  which  "the  merchandise  is  the 
growth.  Also,  that  no  merchandise  shall  be  carried  from  port  to 
port  in  the  United  States,  by  any  foreign  vessel,  unl^  it  formed 
a  part  of  its  original  cargo.'  A  ship  that  is  of  twemy  tons  bur- 
den, to  be  employed  in  the  fisheries,  or  in  the  coasting  trade, 
need  not  be  registered,  but  must  be  enrolled  and  licensed  accord- 

1  Act  of  Dec.  31,  1792,  c.  45,  §  7-16,  (1  U.  S.  Stats,  at  Large,  288.) 

2  Act  of  1799,  C.128,  ^63,  (1  U.  S.  Stats,  at  Large,  675);  Act  of  Dec.  31,  1792,  c.  45, 
§  17,  (1  U.  S.  Stats,  at  Large,  288.) 

3  Act  of  Dec.  31,  1792,  c  45,  §27,  (1  U.  S.  Stats,  at  Large,  298.)  See  the  case  of 
The  Neptune,  3  Wheaton,  601. 

*  Act  of  Dec.  31,  1792,  c.  45,  §  14,  (1  U.  S.  Stats,  at  Large,  295.)  And  when  the 
certificate  of  registry  is  given  up,  the  collector  of  the  district  in  which  it  was  registered 
will  cancel  the  bond  given  at  the  time  the  certificate  was  granted.    §  18. 

5  Act  of  1797,  c.  61,  §  1,  (I  U.  S.  Stats,  at  Large,  498.) 

6  Act  of  March  2,  1803,  c.  71,  ^  3,  (2  U.  S.  Stats,  at  Large,  210) ;  Act  of  1799,  c. 
128,  §  30,  (1  U.  S.  Stats,  at  Large,  649.)  But  wiierc  a  vessel  was  sold  at  sea  to  Amer- 
ican citizens,  and  repurchased  on  her  arrival  and  l)cfore  entry  at  the  custom  liou.se,  by 
the  original  owners,  it  was  held  that  a  new  registry  was  unnecessary.  United  States  v. 
Willings,  4  Cranch,  48  ;  S.  C.  4  Dall.  374. 

T  Act  of  1817,  c.  204,  (3  U.  S.  Stats,  at  Large,  351.) 


328  ELEMENT^   OF   MERCANTILE    LAW.  [CH.  XVII. 

ingly.i  If  under  twenty  tons  burden,  she  need  only  be  licensed. 
If  licensed  for  the  fisheries,  she  may  visit  and  return  from  for- 
eign ports,  having  stated  her  intention  of  doing  so  and  being 
permitted  by  the  collector.^  And  if  registered,  she  may  engage 
in  the  coasting  trade  or  fishery,  and  if  licensed  and  enrolled,  she 
may  become  a  registered  ship,  subject  to  the  regulations  pro- 
vided for  such  cases.2 

A  ship  that  is  neither  registered  nor  licensed  and  enrolled,  can 
sail  on  no  voyage  with  the  privilege  or  protection  of  a  national 
character  or  national  papers.  If  she  engages  in  foreign  trade,  or 
the  coasting  trade,  or  fisheries,  she  is  liable  to  forfeiture;  and  if  she 
have  foreign  goods  on  board,  must  at  all  events  pay  the  tonnage 
duties  leviable  on  foreign  ships.  In  these  days,  no  ship  engaged 
in  honest  business,  and  belonging  to  a  civilized  people,  is  met 
with  on  the  ocean,  without  having  the  regular  papers  which 
attest  her  nationality,  unless  she  has  lost  them  by  some  accident. 

SECTION  II. 

OF   THE    TRANSFER    OF   PROPERTY  IN   A   SHIP. 

The  Statute  of  Registration  provides,  that  "  in  every  case  of 
sale  or  transfer,  there  shall  be  some  instrument  in  writing,  in  the 
nature  of  a  bill  of  sale,  which  shall  recite  at  length  the  said  cer- 
tificate ;  otherwise  the  said  ship  or  vessel  shall  be  incapable  of 
being  registered  anew."^  It  follows,  therefore,  that  a  merely  oral 
transfer,  a^iough  for  valuable  consideration,  and  followed  by 
possession,  gives  the  transferree  no  right  to  claim  a  new  register 
setting  forth  his  ownership.  But  this  is  all.  There  is  nothing 
in  this  statute  to  prevent  the  property  from  vesting  in  such  trans- 
ferree. It  is,  however,  unquestionably  a  principle  of  the  maritime 
law  generally,  that  property  in  a  ship  should  pass  by  a  written 
instrument.  And  as  this  principle  seems  to  be  adopted  by  the 
statute,  the  courts  have  sometimes  almost  denied  the  validity  of 
a  merely  parol  transfer.  The  weight  of  authority  and  of  reason 
is,  however,  undoubtedly,  in  favor  of  the  conclusion  that  "the 
registry  acts  have  not,  in  any  degree,  changed  the  common  law 

1  Act  of  1793,  c.  52,  (1  U.  S.  Stats,  at  Large,  306.) 

2  Act  of  1793,  c.  52,  §  27,  (1  U.  S.  Stats,  at  Large,  306.) 

3  Act  of  1793,  c.  53,  §  3,  supra. 

*  Act  of  1792,  c.  45,  ^  14,  supra. 


CII.  XYII.]  OF   TUE   LAW   OF   SHIPPING.  329 

as  to  the  manner  of  transferring  this  species  of  property."^  It 
would  follow,  therefore,  that  such  transfer  would  be  valid,  and 
would  pass  the  property .2 

The  English  Registry  Act  provides  that  "  when  the  property 
in  any  ship,  or  in  any  part  thereof,  shall,  after  registry,  be  sold, 
the  same  shall  be  transferred  by  bill  of  sale,  or  other  instrument 
in  writing,  containing  a  recital  of  the  certificate  of  registry,  or 
the  principal  contents  thereof;  otherwise  such  transfer  shall  not 
be  valid  or  efiectual  for  any  purpose  whatever,  either  in  law  or  in 
equity."  2  Our  Registry  Act  contained  no  such  provisiori.  Per- 
haps this  important  omission  arose  from  a  doubt  whether  legis- 
lating concerning  the  transfer  of  ships  at  home,  as  property,  could 
be  considered  as  a  regulation  of  commerce ;  for  if  not,  it  was  not 
within  their  constitutional  po'agr. 

In  1850,  Congress,  howevei^assed  an  act,  "to  provide  for  re- 
cording the  conveyances  of  vessels,  and  for  other  purposes."  By 
this  statute  it  was  provided  "  that  no  bill  of  sale,  mortgage,  hy- 
pothecation, or  conveyance,  of  any  vessel  or  part  of  any  vessel  of 
the  United  States,  shall  be  valid  against  any  person  other  than 
the  grantor  or  mortgagor,  his  heirs  and  devisees,  and  persons 
having  actual  notice  thereof ;  unless  such  bill  of  sale,  mortgage, 
hypothecation,  or  conveyance  be  recorded  -in  the  office  of  the 
collector  of  the  customs  where  such  vessel  is  registered  or  en- 
rolled." Then  follows  an  exception  in  favor  of  liens  by  bottom- 
ry, and  in  subsequent  sections  are  provisions  for  recording  by  the 
collector,  and  giving  certificates,  &c.* 

1  Weston  V.  Penniman,  ]  Mason,  317. 

2  In  Olil  ?•.  The  Eagle  Ins.  Co.  4  Mason,  172,  Mr.  Justice  Story  expressed  an  opinion 
that  the  title  to  a  ship  could  not  pass  by  parol.  The  learned  judp;e  cited  the  authority  of 
Lord  Stowed  in  The  Sisters,  5  Rob.  Adm.  155,  who  said  :  "According  to  the  ideas  which 
I  have  always  entertained  on  tliis  question,  a  bill  of  sale  is  the  proper  title  to  which  the 
maritime  courts  of  all  countries  would  look.  It  is  the  universal  instrument  of  transfer 
of  ships,  in  the  usage  of  all  maritime  countries  ;  and  in  no  degree  a  peculiar  title  deed 
or  conveyance  known  only  to  the  law  of  England.  It  is  what  the  maritime  law  expects, 
what  the  court  of  admiralty  would,  in  its  ordinary  practice,  always  rerpiire,  and  what 
the  legislature  of  this  country  has  now  made  absolutely  necessary."  See  also  Weston 
V.  Penniman,  1  Mason,  316,  317;  3  Kent's  Comm.  130,  131.  But  it  seems  to  be  well 
settled  in  the  United  States,  that,  at  common  law,  the  title  to  a  vessel  may  pass  by 
delivery,  under  a  parol  contract.  Bixby  v.  Eranklin  Ins.  Co.  8  Pick.  86;  United  States 
V.  Wiliings,  4  Cranch,  55  ;  Badger  v.  Bank  of  Cumberland,  26  Maine,  428  ;  Wendover 
V.  Hogeboom,  7  Johns.  308  ;  Vinal  v.  Burrill,  16  Pick.  401 ;  Leonard  v.  Huntington, 
15  Johns.  298;  Thorn  v.  Hicks,  7  Cowen,  698,  699;  Fontaine  v.  Beers,  19  Ala.  722. 

3  3  &  4  Wm.  4,  c.  55,  ij  31  ;  26  Geo.  3,  c.  60,  §  17 ;  8  &  9  Vict.  c.  89,  §  34.  Under 
these  acts  it  is  held  that  no  action  can  be  maintained  upon  an  executory  contract  to  sell 
a  ship,  unless  it  contain  a  recital  of  the  certificate  of  registry.  Duncan  v.  Tindal, 
20  Eng.  L.  &  Eq.  224;  see  also,  McCalmont  v.  Rankin,  19  Eng.'L.  Eq.  176. 

*  Act  of  1850,  c.  27,  (9  U.  S.  Stats,  at  Large,  440.)- 
28* 


330  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVII. 

This  statute  has  no  effect,  that  we  perceive,  upon  oral  trans- 
fers, excepting  that  as  they  cannot  be  recorded,  their  operation  is 
limited  to  the  grantors  and  those  who  have  actual  notice.  Where 
the  transfer  is  by  bill  of  sale,  the  record  of  this,  under  the  late 
statute  is,  perhaps,  notice  to  all  the  world.  But  in  most  of  our 
States  there  are  already  provisions  for  the  record  of  mortgages  of 
personal  property,  and  it  may  be  a  difficult  question  how  these 
are  affected  by  this  statute  of  the  United  States.  For  example, 
if  there  be  such  a  record  as  is  required  by  the  state  law,  is  this 
sufficient,  without  a  custom-house  record,  either  because  it  is  a 
public  notice,  which  is  the  equivalent  of  actual  notice  to  every- 
body, or  because  the  State  has  the  right  to  regulate  this  matter; 
or,  if  there  be  a  record  in  the  custom-house  and  none  which 
conforms  to  the  state  requiremei^s,  is  this  sufficient  against  all 
the  world  ?  If  we  suppose  this  statute  to  be  constitutional,  of 
which  we  do  not,  however,  feel  certain,  we  should  say  that  it 
controlled  and  superseded  the  state  statute,  so  as  to  make  that 
unnecessary  and  ineffectual ;  and  therefore  a  record  in  the  custom- 
house only  would  be  sufficient,  and  a  record  under  the  state  law 
would  affect  only  those  who  had  actual  knowledge  of  it.^ 

As  a  ship  is  a  chattel,  a  transfer  of  it  should  be  accompanied 
by  a  delivery  of  possession.  Actual  delivery  is  sometimes  im- 
possible where  a  ship  is  at  sea ;  and  perhaps  the  statute  of  1850 
makes  the  record  of  the  transfer  equivalent  to  change  of  posses- , 
sion.  If  there  be  no  record,  possession  should  be  taken  as  soon 
as  possible ;  and  prudence  would  still  require  the  same  course, 
we  think,  in  case  of  transfer  by  writing  and  record.^ 

There  have  been  cases  which  have  been  supposed  to  intimate 


1  In  Fontaine  v.  Beers,  19  Ala.  722,  it  was  held  that  a  statute  of  Alabama,  requiring 
the  registration  of  mortgages,  deeds  of  trust,  &c.,  on  personal  property,  did  not  apply 
to  vessels  for  the  navigation  of  the  ocean  —  and  that  the  evidence  of  their  title  was  gov- 
erned by  tlie  acts  of  Congress.  We  are  not  sure  that  this  statute,  which  regulates  the 
transfer  of  ships  at  home,  is  a  proper  exorcise  of  the  power  to  "  regulate  commerce." 

2  In  Kirkley  v.  Hodgson,  1  B.  &'  C.  588,  a  part  of  a  ship  was  transferred,  and  all  the 
forms  prescribed  by  the  registry  acts  complied  with.  I3ut  the  possession  was  not 
changed.  Baylcy,  J.,  said  :  "  It  has  been  decided,  in  the  cases  of  Monkhouse  v.  Hay,  2 
Brod.  &  B.  114  ;  Hay  v.  Fairbairn,  2  B.  &  Aid.  193  ;  Kobinson  v.  Macdonnell,  5  M.  &  S. 
228,  that  the  alteration  of  the  register  is  not  to  be  considered  as  notice  to  the  world. 
The  register  acts  were  made  entirely  alio  intuitu ;  their  object  was  not  to  give  notice 
to  the  world,  but  to  give  notice  to  government.  The  fiict  of  altering  the  register  is  to 
be  considered  as  much  a  secret  act  as  the  execution  of  a  secret  conveyance;  so  that, 
though  the  true  ownership  would  appear  on  the  face  of  the  register,  that  does  not  vary 
the  case."  It  is  obvious,  however,  that  these  remarks  will  not  apply  to  the  Act  of 
1850,  c.27. 


CH.  XVII.]  OF   THE   LAW   OF   SHIPPING.  331 

that,  as  between  two  innocent  purchasers,  he  that  gets  actual 
possession  first  completes  his  title  as  against  the  other.  We 
doubt  the  correctness  of  this.^  We  say  rather  that  if  A  becomes 
the  bond  fide  purchaser  of  a  vessel,  and  has  taken  constructive  pos- 
session, he  has  no  right  to  delay  unnecessarily  the  taking  actual 
possession,  for  this  may  deceive  and  injure  other  persons.  And 
i£(|I3,  a  second  purchaser,  in  ignorance  of  the  first,  during  such 
delay  or  laches,  gets  actual  possession,  he  would  hold  the  vessel; 
unless,  indeed,  prevented  by  the  record.  But  if  B  gets  actual 
possession  before  A,  but  while  A  was  so  prevented  that  his  want 
of  actual  possession  cannot  be  imputed  to  him  as  laches,  he  will 
get  a  better  title  than  B,  if  he  (A)  takes  actual  possession  as  soon 
as  he  can. 2 

1  It  is  now  well  settled  that,  as  between  the  parties,  the  property  in  goods  sold  will 
pass  to  the  purchaser,  although  the  possession  may  remain  in  the  vendor.  1  Parsons 
on  Contracts,  440,  441.  But  under  the  statute  of  13  Eliz.  to  render  the  transfer  valid 
as  to  third  parties  without  notice,  there  must  be  a  change  of  possession.  1  id.  441 ; 
Twyne's  case,  1  Smith's  Lead.  Cas.  1.  But  in  some  cases  this  change  may  be  con- 
structive; and  the  delivery,  as  is  often  said,  may  be  symbolical.  But  there  is  no  case  in 
which  delivery  either  actual  or  symbolical  may  be  dispensed  with.  Much  inaccuracy 
in  the  use  of  language  seems  to  have  arisen  in  some  cases  from  mistaking  the  nature 
of  symbolical  delivery,  and  in  others,  from  overlooking  it  entirely.  The  cases  of  Lamb 
V.  Durant,  12  Mass.  54,  and  Lanfear  v.  Sumner,  17  Mass.  110,  have  been  supposed  to 
support  the  doctrine  that,  as  between  two  innocent  purchasers,  he  wlio  acquires  actual 
possession  first  completes  his  title  as  against  the  other,  and  the  latter  case  has  been 
questioned  on  that  ground.  Ingraham  v.  Wheeler,  6  Conn.  284  ;  Ricker  v.  Cross, 
5  N.  H.  573.  But  they  do  not  seem  to  us  to  go  further  than  to  decide  that,  of  two 
innocent  purchasers,  he  who  gets  actual  possession  first,  has  a  better  title  than  the  one 
who  has  no  possession  at  all,  either  actual  or  constructive,  and  so  far  they  seem  to  be 
sound  law.  In  Lanfear  v.  Sumner,  the  goods  were  supposed  by  tlie  owners  in  Phila- 
delphia, to  be  at  sea.  They  were  actually  landed  in  Boston.  A  written  assignment 
was  made  in  Philadelphia  and  delivered,  but  no  money  was  paid,  no  bill  of  lading 
transferred,  and  there  was  no  pretence  whatever  of  any  symbolical  delivery.  The 
court  (per  Jackson,  J.,)  did  not  deny  that,  if  there  had  been  a  legal,  as  distinguished 
from  an  actual  delivery,  to  the  first  jnircliaser,  his  title  would  have  been  protected. 
See  also,  Gardner  v.  Howland,  2  Pick.  599,  per  Parker,  C.  J.  In  Lamb  v.  Durant, 
12  Mass.  54,  the  vessel  was  owned  by  a  firm.  One  partner  was  abroad  and  in  actual 
possession  of  the  vessel.  It  was  held,  that,  under  the  circumstances  of  the  case,  a 
transfer  by  the  home  partner,  must  be  subject  to  all  incumbrances,  made  by  the  partner 
in  possession,  before  notice  of  transfer,  and  that  accordingly  a  sale  with  delivery  of 
possession  by  the  latter  would  intercept  the  title  attempted  to  be  passed  by  a  sale  by  the 
former.  This  seems  to  be  reasonable,  for  it  might  well  be  held  that  in  such  a  case 
there  could  be  no  constructive  delivery  by  the  home  partner. 

'^  In  England,  a  constructive  delivery  of  a  vessel  at  sea  is  effected  by  a  transfer  of 
the  Grand  Bill  of  Sale.  Atkinson  v.  Maling,  2  Terra.  462  ;  Ex  parte  Matthews,  2 
Ves.  272;  Kirkley  v.  Hodgson,  1  B.  &  C.  588.  In  this  country,  the  delivery  of  an 
ordinary  bill  of  sale  has  the  same  efiect.  Portland  Bank  v.  Stacey,  4  Mass.  661  ;  Put- 
nam v.  Dutch,  8  Mass.  287  ;  Badlam  v.  Tucker,  1  Pick.  396;  Wheeler  v.  Sumner, 
4  Mason,  183.  In  Joy  v.  Scars,  9  Pick.  4,  5,  Parker,  C.  J.,  said:  "By  the  principles 
of  maritime  law,  we!l  known  and  adopted  by  the  common  law.  the  property  passed 
by  the  execution  and  delivery  of  the  bill  of  sale,  subject  however  to  be  defeated,  if, 
after  the  arrival  of  tlie  vessel  at  her  home  port,  tiiere  siiould  be  such  a  delay  in  taking 
possession  by  tlie  vendor  as  should  indicate  a  fraudulent  intention  in  the  transfer,  and 
when  the  delay  and  negligence  are  gross,  they  will  of  themselves  defeat  the  conveyance 


332  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

It  is  easy  to  suppose  many  other  questions  arising  under  this 
statute  of  1850,  to  which  it  will  be  impossible  to  give  certain 
answers,  untilthe  construction  of  the  statute  is  settled  by  adju- 
dication. 

By  the  word  "  ship,"  and  still  more  by  the  phrase  "  ship  and 
her  appurtenances  —  or  apparel  —  or  furniture,"  every  thing  would 
pass  which  was  distinctly  connected  with  the  ship,  and  is  0i 
board  of  her,  and  fastened  to  her  if  that  be  usual,  and  needed 
for  her  navigation  or  for  her  safety.^ 

against  any  subsequent  purchaser  or  attaching  creditor.  This  delay  and  negligence 
must  be  judged  of  by  the  jury ;  for,  whether  they  exist  or  not,  depends  upon  the  situa- 
tion and  circumstances  of  the  vessel  and  of  the  vendee."  Notice  to  the  captain  may, 
in  some  cases,  be  equivalent  to  taking  actual  possession.  Brinley  v.  Spring,  7  Grecnl. 
241 ;  Mair  v.  Glennie,  4  M.  &  S.  240.  In  Turner  v.  Coolidge,  2  Mete.  350,  the  court 
was  "  inclined  to  the  opinion  that  the  possession  of  one  part  owner,  who  acts  for  him- 
self, and  at  the  request  of  the  other  part  owner,  acts  for  him,  supersedes  the  necessity 
of  a  formal  taking  of  possession,  and  vests  the  property  in  the  vendee."  See  also, 
Winsor  v.  McLcllan,  2  Story,  497 ;  Addis  v.  Baker,  1  Anst.  222 ;  Giilispy  v.  Coutts, 
Ambler,  G52.  It  has  been  held  that,  when  the  sale  is  conditional,  and  there  is  an 
agreement  that  the  mortgagor  shall  retain  possession  until  condition  broken,  then  the 
mortgagee  need  not  take  actual  possession.  Badlam  v.  Tucker,  1  Pick.  389  ;  D'Wolf 
V.  Harris,  4  Mason,  SI.");  Conrad  v.  Atlantic  Ins.  Co.  1  Pet.  449.  But  see  as  to  this 
point,  1  Smith,  Lead.  Cas.  1 ;  Twyne's  case,  note  by  Mr.  Wallace.  See  also,  Portland 
Bank  v.  Stubbs,  6  Mass.  422;  Tucker  y.  Buffington,  1.5  Mass.  480. 

1  The  construction  of  these  words  must  depend  upon  the  instrument  in  which  they 
are  used,  and  in  some  degree  upon  tlie  circumstances  of  each  case.  Hoskins  ?;.  Pick- 
ersgill,  2  Marsh.  Ins.  727  ;  Dundee,  1  Hagg.  Ad.  109;  S.  C.  (Gale  v.  Laurie,)  5  B.  & 
C.  156;  Richardson  v.  Clark,  15  Maine,  421  ;  Lano  v.  Neale,  2  Stark.  N.  P.  105; 
Kynter's  case,  28  &  29  Eliz.  C.  P.  Leon.  146,  47  ;  Starr  v.  Goodwin,  2  Root,  71  ;  Briggs 
r. "Strange,  17  Mass. 405;  Roccus,  Not.  20;  Molloy  de  Jure  Marit.  book  2,  c.  1,  §  8. 
In  the  case  of  The  Dundee,  1  Hagg.  Ad.  127,  Lord  Stowell  said:  "  The  word  'appur- 
tenances '  must  not  be  construed  with  reference  to  the  abstract  naked  idea  of  a  ship ; 
for  that  which  would  be  an  incumbrance  to  a  ship  one  way  employed,  would  be  an 
indispensable  equipment  in  another,  and  it  would  be  a  preposterous  abuse  to  consider 
them  alike  in  such  different  positions.  You  must  look  to  the  relation  they  bear  to  the 
actual  service  of  the  vessel.  In  Richardson  v.  Clark,  it  was  held  that  a  chronometer, 
on  board  a  vessel,  did  not  pass  under  a  bill  of  sale,  of  a  vessel,  with  all  and  singular 
her  tackle,  apparel  and  furniture.  But  see  Langton  v.  Horton,  6  Jurist,  594  ;  S.  C.  23 
Leg.  Obs.  524.  In  Lane  v.  Neale,  "kentledge,"  a  valuable  kind  of  permanent  ballast, 
was  claimed  under  a  conveyance  of  a  ship  with  all  stores,  tackle,  apparel,  &c.  Lord 
Ellenborowjh,  said  :  "  It  could  not  be  considered  as  part  of  the  ship  or  necessary  stores, 
since  common  ballast  might  have  been  used."  In  Woods  v.  Russell,  5  B.  &  Aid. 
942,  the  rudder  and  cordage,  which  were  designed  for  a  vessel,  which  was  not  quite 
finished,  were  held  to  pass  with  it,  although  they  were  not  actually  attached  to 
the  vessel  at  the  time  of  its  delivery.  Whetlier  a  boat  would  pass  with  the  ship,  would 
seem  to  depend  upon  circumstances.  In  Starr  v.  Goodwin,  supra,  it  was  held  that  it 
would  not.  See  also,  Roccus,  Not.  20  ;  Straccha  de  Navibus,  pars,  2,  No.  12;  Molloy 
de  Jure  Maritime,  book  2,  c.  1,  §  8.  In  Briggs  v.  Strange,  17  Mass.  405,  Parker,  C.  J., 
said :  "  Whether  tlie  boat,  cables,  and  anchors  of  a  vessel,  could  be  attached,  and  so 
separated  from  a  vessel,  may  depend  upon  the  situation  of  those  articles  in  relation  to 
the  vessel.  To  take  a  boat  or  cable  and  anchor  from  a  vessel  when  they  are  in  use, 
and  necessary  to  the  safety  of  the  vessel,  would  expose  the  party  to  damages.  But  if 
the  vessel  were  at  a  wharf,  and  her  cable  and  anchor  and  boat  not  in  use,  there  seems 
to  be  no  reason  why  they  may  not  as  well  be  taken  as  the  harness  of  a  carriage,  or  the 
sails  and  rigging  of  a  vessel  when  separated  from  the  hull,  and  laid  up  on  shore."  In 
a  policy  of  insurance,  the  word  ship  usually  includes  the  boat.  Emerigon,  c.  4,  ^  7  ; 
Hall  V.  Ocean  Ins.  Co.  21  Pick.  472.     See  also  Shannon  v.  Owen,  1  Man.  &  Ryland,  392. 


CH.  XVII.]  OF   THE   LAW   OF   SHIPPING.  333 

Sometimes  when  a  ship  is  built,  she  is  paid  for  by  instalments. 
If  these  are  regulated  by  the  progress  in  building,  so  that  when 
so  much  is  done,  a  sum  deemed  equivalent  to  the  labor  and 
materials  used  shall  be  paid,  and  when  more  is  done,  another 
Sum  in  due  proportion,  and  so  on,  it  is  held  that  each  payment 
purchases  the  ship  as  she  lies ;  and  if  she  be  lost  after  any  such 
payments,  the  loss  is  the  purchasers.'  A  sale  by  the  decree  of 
any  regular  court  of  admiralty,  with  due  notice  to  all  parties, 
and  with  proper  precautions  to  protect  the  interests  of  all,  and 
guard  against  fraud  or  precipitancy,  would  undoubtedly  be 
acknowledged  by  courts  of  admiralty  of  every  other  nation  as 
transferring  the  property  effectually.^ 

1  This  doctrine  was  first  sanctioned  in  England,  in  Woods  v.  Russell,  5  B.  &  Aid. 
946  ;  but  the  case  was  not  decided  upon  that  alone.  It  was  recognized  in  Atkinson  v. 
Bell,  8  B.  &  C.  282,  and  in  Battersby  v.  Gale,  4  Ad.  &  Ell.  458,  note.  But  the  question 
was  thoroughly  discussed  in  Clarke  v.  Spence,  4  Ad.  &  Ell.  448,  and  after  some  hesita- 
tion the  court  decided,  "  that  where  the  contract  provides,  that  a  vessel  shall  be  built 
under  the  superintendence  of  a  person  appointed  by  the  purchaser,  and  also  fixes  the 
payment  by  instalments,  regulated  by  particular  stages  in  the  progress  of  the  work, 
the  general  property  in  all  tlie  planks  and  other  things  used  in  the  progress  of  the  work, 
vest  in  the  purchaser  at  the  time  when  they  are  put  to  the  fabric  under  the  approval  of 
the  superintendent,  or  at  all  events,  as  soon  as  the  first  instalment  is  paid."  See  also, 
Read  v.  Fairbanks,  24  Eng.  L.  E(i.  220.  Tliis  rule  prevails  in  Scotland.  Bell  on  Sales, 
(1844,)  p.  17.  But  if  the  time  of  payment  is  not  regulated  by  tiie  progress  of  the 
work,  then  the  property  does  not  pass  till  the  vessel  is  completed.  Laidler  v.  Burlin- 
son,  2  Mees.  &  AVels.  602.  See  also  Mucklow  v.  Mangles,  1  Taunt.  318.  This  precise 
question  does  not  appear  to  have  been  decided  in  the  American  courts.  But  in  Glover 
V.  Austin,  6  Pick.  209,  it  was  held  that  a  conveyance  and  symbolical  delivery  of  the 
keel,  after  it  had  been  laid,  vested  the  property  of  that  in  the  vendee,  and  drew  after 
it  all  subsequent  additions,  according  to  the  maxim  of  the  civil  law  :  proprletas  navis 
carinoi  causam  sequitur.  See  also,  I3onsey  v.  Amee,  8  Pick.  236;  Johnson  v.  Hunt,  II 
Wend.  135. 

-  When  a  vessel  is  sold,  to  dischartre  any  lien,  known  to  the  Maritime  Law,  or 
under  a  sentence  of  forfeiture  for  the  violation  of  revenue  or  other  laws,  the  title,  con- 
ferred by  the  court,  is  valid  against  the  whole  world,  and  is  i-ecognized  by  the  courts  of 
all  countries.  The  Tremont,  1  W.Rob.  163;  Attorney-General  v.  Norstedt,  3  Price, 
97;  3  Kent's  Com.  132;  The  Helena,  4  Rob.  3;  Grant  v.  McLachlin,  4  Johns.  34. 
But  the  question  arose  in  Reid  v.  Darby,  10  East,  143,  whether  courts  of  admiralty 
have  jurisdiction  to  decree  "  upon  the  mere  petition  of  the  captain,  the  sale  of  a 
ship  reported  upon  survey  to  be  unseaworthy,  and  not  repairable,  so  as  to  carry  the 
cargo  to  the  place  of  destination,  but  at  an  expense  exceeding  the  value  of  tiie  ship 
when  repaired."  The  English  Courts  of  Common  Law  have  held  that  there  is  no 
such  jurisdiction  in  their  courts,  although  they  admit  that  it  has  obtained  abroad. 
Hunter  v.  Prinsep,  10  East,  378  ;  Morris  v.  Robinson,  3  Barn.  &  Cress.  203.  But 
Lord  Slowcll  expressed  regret  at  the  want  of  such  jurisdiction.  The  Fanny  &  Elmira, 
Edwards,  Ad.  119  ;  The  Warrior,  2  Dods.  293;  The  Pitt,  1  Hagg.  Ad.  240.  And  in 
this  country  the  jurisdiction  seems  to  be  admitted.  In  the  case  of  The  Schooner 
Tilton,  5  Mason, 465,  474,  Story,  J.,  said  :  "If  what  is  suggested  in  that  case,  (Reid  v. 
Darby,)  as  to  the  want  of  jurisdiction  in  the  admiralty  courts  to  decree  the  sale  of  a 
ship  in  a  case  of  necessity  upon  an  application  of  the  master,  I,  for  one,  cannot  assent. 
I  agree  that,  in  such  a  case,  the  decree  of  sale  is  not  conclusive  upon  the  owner,  or 
upon  third  persons,  because  it  is  made  upon  the  application  of  the  master,  and  not  in 
an  adverse  proceeding.  But  I  cannot  but  consider  it  as  strictly  within  the  admiralty  juris- 
diction. It  is  prima  facie  evidence  of  a  rightful  exercise  of  authority,  l)ut  no  more. 
The  proceeding  being  ex  parte,  cannot  be  deemed  conclusive  in  favor  of  the  party 


334  ELEMENTS    OF   MERCANTILE   LAW.  [cH.  XVII. 


SECTION  III. 
OF    PART-OWNERS. 

Two  or  more  persons  may  become  part-owners  of  a  ship,  in 
either  of  three  ways.  They  may  build  it  together,  or  join  in  pur- 
chasing it,  or  each  may  purchase  his  share  independently  of  the 
others.  In  either  case,  their  rights  and  obligations  are  the 
same. 

If  the  register,  or  the  instrument  of  transfer,  or  other  equiva- 
lent evidence,  do  not  designate  specific  and  unequal  proportions, 
they  will  be  presumed  to  own  the  ship  in  equal  shares.^ 

Part-owners  are  not  necessarily  partners.  But  a  ship,  or  any 
part  of  a  ship,  may  constitute  a  part  of  the  stock  or  capital  of  a 
copartnership;  and  then  it  will  be  governed,  in  all  respects,  by 
the  law  of  partnership.^ 

A  part-owner  may  at  any  time  sell  his  share  to  whom  he  will. 
But  he  cannot  sell  the  share  of  any  other  part-owner,  without 
his  authority.^  If  he  dies,  his  share  goes  to  his  representatives, 
and  not  to  the  surviving  part-owners.* 

promoting  it."  See  also,  Janney  r.  Columbian  Ins.  Co.  10  Wheat.  411,  418  ;  Dorr  v. 
Pacific  Ins.  Co.  7  Wheat.  612 ;  Armroyd  v.  Union  Ins.  Co.  2  Binn.  394 ;  Steinraetz  v. 
United  States  Ins.  Co.  2  Serg.  &  Rawle,  293. 

1  Glover  v.  Austin,  6  Pick.  209,  221,  per  Parher,  C.  J.;  Ohl  v.  The  Eagle  Ins.  Co. 
4  Mason,  172.  But  the  act  of  1850,  c.  27,  §  5,  provides  that  "the  part  or  proportion  of 
the  vessel,  belonging  to  each  owner,  shall  be  inserted  in  the  register  of  enrolment." 

-  Harding  v.  Foxcroft,  6  Greenl.  77;  Lamb  -v.  Durant,  12  Mass.  54;  Nicoll  v.  Mum- 
ford,  4  Johns.  Ch.  525,  S.  C.  20  Johns.  611;  Phillips  i'.  Purington,  15  Maine,  425; 
French  v.  Price,  24  Pick.  13  ;  Seahrook  v.  Kose,  2  Hill,  Chi(S.  Car.)  555  ;  Patterson  v. 
Chalmers,  7  B.  Mon.  595.  In  Harding  v.  Foxcroft,  Mellen,  C.  J.,  said  :  "  There  may 
be  a  partnership,  as  well  as  a  co-tenance,  in  a  vessel.  When  a  person  is  to  lie  consid- 
ered as  a  part-owner,  and  when  as  a  partner,  in  a  ship,  depends  on  circumstances.  The 
former  is  the  general  relation  between  ship-owners,  and  the  latter  the  exception,  and  it 
is  required  to  be  shown  specially." 

2  In  Lamb  v.  Durant,  12  Mass.  54,  56,  R.L.,  a  partner  in  the  firm  owning  the  vessel, 
had  sold  it.  Parker,  C.  J.,  said  :  "  With  respect  to  the  authority  of  R.  L-,  to  sell  his 
partner's  interest,  it  cannot  result  merely  from  his  being  a  part-owner  of  the  vessel; 
for  part-owners  are  only  tenants  in  common,  and  one  of  them  cannot,  by  his  sole  act, 
transfer  tlie  property  of  another,  unless  under  circumstances  which  furnish  a  presump- 
tion of  an  assent  by  him  who  does  not  join  in  the  conveyance." 

*  In  a  note,  in  Abbott  on  Shipping,  p.  97,  first  introduced  by  the  author  into  the 
fourth  edition,  it  is  supposed  that,  if  a  ship  were  granted  to  a  number  of  persons  gen- 
erally, without  distinguishing  in  any  way  the  shares  of  each,  they  would  become  joint 
tcn.ants  at  law,  and  that  the  rule  /«s  accrescendi  inter  mercatoies  locum  non  liabet,  could  be 
enforced  only  in  equity.  But  this  is  certainly  not  the  American  law;  and  we  doubt 
if  it  be  English  law.  See  cases  cited  in  the  two  preceding  notes,  and,  also,  Merrill  v. 
Bartlctt,  6  Pick.  46  ;  Jackson  v.  Robinson,  3  Mason,  138;  Buddington  v.  Stewart,  14 
Conn.  404  ;  Macy  v.  De  Wolf,  3  W.  &  M.  193,  204  ;  Milburn  v.  Guyther,  8  Gill,  92. 


CH.  XVII.]  or  THE  law  of  shipping.  335 

A  majority  of  the  part-owners  may,  generally,  manage  and 
direct  the  employment  of  the  property  at  their  discretion.^  But 
a  court  of  admiralty  will  interfere  and  do  justice  between  them, 
and  prevent  either  of  the  part-owners  from  inflicting  injury  upon 
the  others.2 

One  part-owner  may,  in  the  absence  of  the  rest,  and  without 
prohibition  from  them,  manage  the  ship,  as  for  himself  and  for 
them.  And  the  contracts  he  enters  into,  in  relation  to  the  em- 
ployment or  preservation  of  the  ship,  bind  all  the  part-owners  in 
favor  of  an  innocent  third  party .^ 

In  general,  all  the   part-owners  are  liable,  each  one  for  the 

1  Willincrs  v.  Blight,  Pet.  Adm.  288;  Steamboat  Orleans  v.  Phoebus,  11  Pet.  175  ; 
Davis  V.  The  Seneca,  Gilpin,  24 ;  Loring  v.  Illsley,  1  Cal.  24.  The  same  rule  prevails 
in  some  foreign  codes.  Cours  de  Droit  Commercial,  Art.  621 ;  2  Magens,  108,  Art. 
171. 

^  "For  this  purpose,  it  has  been  the  practice  of  the  Court  of  Admiralty,  from  very 
remote  times,  to  take  a  stipulation  from  tiiose  who  desire  to  send  tiie  ship  on  a  voyage, 
in  a  sum  equal  to  the  value  of  the  shares  of  those  who  disapprove  of  the  adventure, 
either  to  bring  back  and  restore  to  them  the  ship,  or  to  pay  them  the  value  of  their 
shares.  When  this  is  done,  thetlisscnticnt  part-owners  bear  no  portion  of  the  expenses 
of  the  outtit,  and  are  not  entitled  to  a  share  in  the  profits  of  the  undertaking  ;  but  the 
ship  sails  wholly  at  the  charge  and  risk,  and  for  the  profit  of  the  others."  Abbott  on 
Shipping,  100;  The  Apollo,  1  Hagg.  31 1  ;  Petrel,  3  Ilagg.  299 ;  Willings  w.  Blight, 
Pet.  Adm.  288;  Steamboat  Orleans  v.  Phoebus,  11  Pet."l83;  Davis  v.  The  Seneca, 
Gilpin,  24  ;  S.  C.  18  Am.  Jurist,  486,  490;  Kodick  v.  Hinckley,  8  Greenl.  274  ;  The 
Lodermia,  Crabbe,  271  :  Buddington  v.  Stewart,  14  Conn.  404.  And,  at  law,  an  agree- 
ment of  a  majority  of  the  part-owners  of  a  vessel,  to  intrust  the  command  of  a  vessel 
to  a  particular  person,  was  held  void,  as  conflicting  with  the  exercise  of  that  free  and 
impartial  judgment  which  they  were  bound  to  exercise.  Card  v.  Hope,  2  B.  &  C.  661. 
If  the  part-owners  are  equally  divided,  one  half  in  favor  of  employing  the  vessel,  the 
other  half  opposed,  the  former  can  employ  her,  upon  giving  bonds.  3  Kent's  Com. 
153.  In  Steamboat  Orleans  v.  Phoebus,  11  Pet.  175,  183,  Story,  J.,  said :  "  The  minor- 
ity of  the  owners  may  employ  the  ship  in  like  manner,  if  the  majority  decline  to  employ 
her  at  all ;"  and  the  minority  will,  in  that  case,  "  be  entitled  to  all  the  profits  of  the 
voyage  or  adventure,  and  are  to  .bear  all  the  expenses  and  outfits  and  risks  thereof." 
See  also  3  Kent's  Com.  156 ;  Molloy,  b.  II.  c.  1,  §  2,  p.  308.  But  where  part-owners, 
having  equal  interests,  are  both  willing  to  employ  the  vessel,  but  differ  as  to  the  voyage, 
or  when,  in  such  a  case,  each  part-owner  is  willing  to  take  the  vessel  on  a  voyage  to  be 
planned  by  himself,  but  will  not  cociporate  with  the  other,  it  does  not  seem  to  be  well 
settled  what  a  court  of  admiralty  will  do.  The  English  admiralty  courts  have  no 
authority  to  sell  in  such  a  case.  Ouston  v.  Hebden,  1  Wils.  101 ;  The  Apollo,  1  Hagg. 
306.  This  authority  was  followed  in  Davis  v.  The  Seneca,  Gilpin,  10;  but  in  the  Cir- 
cuit Court,  the  decision  was  overruled  by  Washinr/fon,  J.,  who,  on  the  authority  of  the 
French  Ordonnance  de  la  Marine,  sections,  5,  6,  held  that  a  sale  could  lie  decreed  in 
such  cases.  18  American  Jurist,  486.  See  also  Skrine  ^•.  The  Hope,  Bee's  Adm.  2 ; 
Benedict's  Adm.  40.  Unless  a  bond  is  taken  by  the  dissentient  part-owners,  in  the 
cases  above  mentioned,  it  seems  that  they  will  have  no  remedy  in  case  the  ship  is  lost. 
Graves  v.  Sawcer,  Sir  T.  Ravm.  15,  1  Lev.  29.  See  also  Gould  v.  Stanton,  16  Conn. 
12  ;  Moody  i-.  Buck,  1  Sandf"  304. 

3  Chapman  v.  Durant,  10  Mass.  47;  Schermerhorn  v.  Loines,  7  Johns.  311 ;  Muldon 
V.  Whitlock,  1  Cow.  290 ;  Hardy  v.  Sproule,  29  Maine,  258  ;  Davis  v.  Johnston,  4 
Sim.  539;  Darby  v.  Baines,  12  Eng.  Law  and  Eq.  238.  But  one  part-owner  of  a  vessel 
is  not  liable  to  another  for  repairs  made  at  a  home  port,  without  his  consent.  Hardy 
V.  Sproule,  31  Maine,  71.     See  also  Benson  v.  Thompson,  27  Maine,  471. 


336  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

whole  amount,  for  all  the  repairs  of  a  ship,  or  for  necessaries 
actually  supplied  to  her,  in  good  faith.^  If  one  pays  his  part,  or 
more  than  his  share,  and  it  is  agreed  that  he  shall  not  be  held 
further,  still,  if  the  others  do  not  pay,  he  must,  unless  there  is  a 
better  consideration  for  the  promise  not  to  call  on  him,  than  his 
merely  paying  a  part  of  what  he  was  legally  bound  to  pay.  If 
he  had  a  discharge  under  seal,  it  might  protect  him  at  law,  but 
would  not,  of  itself,  in  admiralty .^ 

If  it  can  be  clearly  shown,  however,  that  especial  credit  was 
given,  and  intended  to  be  given,  to  one  part-owner  personally,  to 
the  exclusion  of  the  others,  then  the  others  cannot  be  holden.^ 
If  the  goods  were  charged  to  "  ship"  so  and  so,  or  to  "  ship  and 
owners,"  this  would  tend  strongly  to  show  that  it  was  intended 
to  supply  them  on  the  credit  of  all  the  owners.  If  charged  to 
some  one  owner  alone,  this  would  not  absolutely  prove  that 
credit  was  intentionally  given  to  him  exclusively.  It  would  raise 
a  presumption  which  might  be  rebutted  by  showing  that  no 
other  owner  was  known ;  or  by  any  other  evidence  which  dis- 
proved the  intention  of  discharging  the  other  part-owners.* 

So,  if  the  note,  negotiable  or  otherwise,  of  one  part-owner  were 
taken  in  payment,  if  the  promisor  refused  to  pay,  the  others 
would  be  liable,  unless  they  could  show  a  distinct  bargain  by 
which  they  were  exonerated.^ 

'  "Wright  V.  Hunter,  1  East,  20 ;  Thompson  v.  Finden,  4  Carr.  &  Payne,  158;  Pat- 
terson V.  Chalmers,  7  B.  Mon.  595  ;  James  v.  Bixby,  11  Mass.  440  ;  Stewart  v.  Hall,  2 
Dow.  P.  C.  29  ;  Macy  v.  Do  Wolf,  3  W.  &  M.  193,  204 ;  Carlisle  v.  The  Eudora,  5 
Louis.  15  ;  Scotiin  v.  Stanley,  1  Dall.  129. 

^  Leed  v.  Baring,  Abbott  on  Shipping,  116,  note;  Fitch  v.  Sutton,  5  East,  230;  2 
Parsons  on  Cont.  129,  and  cases  there  cited. 

3  Stewart  v.  Hall,  2  Uow.  P.  R.  29;  James  v.  Bixby,  11  Mass.  37;  Muldon  v.  Whit- 
lock,  1  Cow.  290 ;  Cox  V.  Reid,  1  Carr.  &  Payne,  602 ;  Reed  v.  White,  5  Esp.  122.  In 
Thompson  v.  Finden,  4  Carr.  &  Payne,  158,  Tindal,  C.  J.,  said  :  "I  should  think  an 
exclusive  credit  would  be  a  giving  up  of  the  owners  generally,  and  the  making  an  ex- 
clusive bargain  with  the  person  who  orders  the  goods,  and  an  agreement  to  furnish 
them  on  his  credit  only."  But  there  must  be  a  voluntary  giving  up  of  the  others  ;  for, 
when  all  the  part-owners  are  not  known  to  the  person  giving  credit  to  one,  the  others 
will  not  be  discharged.     Thomson  v.  Davenport,  9  B.  &  Cr.  78. 

*  In  Thompson  v.  Finden,  4  Car.  &  Payne,  158,  one  part-owner  defended  against  a 
claim  for  work  and  labor  done  to  a  vessel,  on  the  ground  that,  in  the  plaintiff's  books, 
the  charge  was  against  another  part-owner  alone.  J'/Wa/,  C.  J.,  said:  "  That  would 
make  no  diftercnce."  But  this  remark  must  be  taken  with  reference  to  that  case,  as 
the  books  would  undoubtedly  be  evidence  to  show  to  whom  the  charge  was  made. 

5  The  Bark  Cbusan,  2  Story,  455,  467.  In  Higgins  v.  Packard,  2  Hall,  N.  Y.  547, 
it  was  held  that  taking  a  note  from  one  part-owner,  docs  not  discharge  the  others,  un- 
less expressly  received  for  that  purpose.  And  it  seems  that  tlie  giving  of  a  receipt  in 
full,  is  not  alone  sufficient  evidence  that  it  was  so  received.  Schermerhorn  v.  Loines, 
7  Johns.  311 ;  Muldon  v.  Whitlock,  1  Cow.  290  ;  Wyatt  v.  Margins  of  Hertford,  3  East, 
147.    But  in  Massachusetts  and  Maine,  the  taking  of  a  promissory  note  from  one  part- 


en.  XVII.]  OF  THE   LAW   OF   SHIPPING.  337 

Commonly,  the  ship's  husband,  as  the  agent  of  all  the  owners 
for  the  management  of  the  ship  has  long  been  called,  is  one  of 
the  part-owners.  But  he  is  not  so  necessarily.  He  may  be  ap- 
pointed in  writing  or  otherwise.  His  duties  are,  in  general,  to 
provide  for  the  complete  equipment  and  repair  of  the  ship,  and 
take  care  of  her  while  in  port;  and  see  that  she  is  furnished  with 
all  regular  and  proper  papers;  and  make  proper  contracts  for 
freight  or  passage,  and  collect  the  receipts,  and  make  the  dis- 
bursements proper  on  these  accounts.^  For  these  things  he  has 
all  the  necessary  powers.  But  he  cannot,  without  special  power, 
insure  for  the  rest,^  nor  buy  a  cargo  for  them,^  nor  borrow  money, 
nor  give  up  their  lien  on  the  cargo  for  the  freight,  nor  delegate 
his  authority.* 

owner,  would  prima  facie  discharge  the  others.  Chapman  v.  Darant,  10  Mass.  49; 
French  v.  Price,  24  "Pick.  13,  20;  DescadiUas  v.  Harris,  8  Greenl.  298;  Wilkins  v. 
Reed,  6  Greenl.  220;  Newall  v.  Hussey,  18  Maine,  249.  See  also  2  Parsons  on  Cont. 
136. 

1  Mr.  Bell,  in  his  work  upon  the  Principles  of  the  Law  of  Scotland,  says  :  "  The 
duties  of  the  ship's-husband  arc:  1.  To  sec  to  the  proper  outfit  of  the  vessel  in  the  re- 
pairs adequate  to  the  voyage,  and  in  the  tackle  and  furniture  necessary  for  a  sea-worthy 
ship.  2.  To  have  a  proper  master,  mate,  and  crew  for  the  ship,  so  that  in  this  respect 
it  shall  he  sea-worthy.  3.  To  see  to  the  due  furnishing  of  provisions  and  stores,  ac- 
cording to  the  necessities  of  the  voyage.  4.  To  see  to  the  regularity  of  all  the  clear- 
ances from  the  custom-house,  and  the  regularity  of  the  registry.  To  settle  the  contracts, 
and  provide  for  the  payment  of  the  furnishings,  which  are  requisite  in  the  performance 
of  those  duties.  5.  To  enter  into  proper  charter-parties,  or  engage  the  vessel  for  gen- 
eral freight,  under  the  usual  conditions  ;  and  to  settle  for  freight  and  adjust  averages 
with  the  merchant ;  and,  6.  To  preserve  the  proper  certificates,  surveys,  and  documents, 
in  case  of  future  disputes  with  insurers  or  freighters,  and  to  keep  regular  books  of  the 
ship."     1  Bell,  Comm.  410,  ^  428,  (4th  cd.)  ;  id.  p.  504,  (5th  ed.) 

-  French  v.  Backhouse,  5  Burr.  2727;  Bell  v.  Humphries,  2  Stark.  345  ;  Patterson 
V.  Chalmers,  7  B.  Mon.  595  ;  Foster  v.  United  States  Ins.  Co.  11  Pick.  85 ;  Turner  v. 
Burrows,  5  Wend.  541 ;  S.  C.  8  Wend.  144  ;  Robinson  i'.  Gleadow,  2  Bing.  N.  C.  156. 
In  Bell  V.  Humphries,  a  case  where  the  managing  owners  had  insured  the  whole  vessel, 
Lord  Ellenboroiigk  said :  "As  managing  owners,  they  liad  a  right  to  order  everything  to 
be  done  which  was  necessary  for  the  ship;  but  a  share  in  the  ship  was  the  distinct 
property  of  each  individual  part-owner,  whose  business  it  was  to  protect  it  by  insurance, 
and  the  insurance  of  another  could  not  be^  binding  upon  such  proprietors,  without 
some  evidence  importing  an  authority  by  them."  See  infra,  n.  4.  But  one  partner 
of  a  firm  which  owns  a  vessel,  may  effect  insurance  for  all.  Hooper  v.  Lusby,  4  Camp. 
66. 

3  Ilewett  V.  Buck,  17  Maine,  147.     See  irfra,  n.  4. 

*  Mr.  Bell,  in  treating  of  the  limitations  of  the  powers  of  a  ship's-husband,  says: 
"1.  That  without  special  powers,  he  cannot  borrow  money  generally  for  the  use  of  the 
ship;  though  he  may  settle  the  accounts  of  the  creditors  for  furnishings,  or  grant  bills 
for  them,  which  will  form  debts  against  the  concern,  whether  he  has  funds  in  his  hands 
or  not,  with  which  he  might  have  paid  them.  2.  That,  although  he  may,  in  the  general 
case,  levy  the  freight,  which  is,  by  the  bills  of  lading,  payable  on  iJie  delivery  of  the 
goods,  it  would  seem  that  he  will  not  have  power  to  take  bills  for  the  freight,  and  give 
up  the  possession  and  lien  over  the  cargo,  unless  it  has  been  so  settled  by  charter-party, 
or  unless  he  has  special  authority  to  give  such  indulgence.  3.  That,  under  general 
authority  as  ship's-husband,  he  has  no  power  to  insure,  or  to  bind  the  owners  for 
premiums  ;  this  requiring  a  special  authority.    4.  That,  as  the  power  of  the  master  to 

29 


338  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVII. 

Where  he  acts  within  his  powers,  a  ship's  husband  binds  all 
his  principals,  that  is,  all  the  part  owners.  But  a  third  party 
may  deal  with  him  on  his  personal  credit  alone  ;  and  if  the  part- 
owners,  believing  this  on  good  reason,  settle  their  accounts  with 
him  accordingly,  this  third  party  cannot  now  establish  a  claim 
against  them  to  their  detriment.'  If  a  ship's  husband  be  not  a 
part-owner,  all  the  part-owners  are  liable  to  him  in  solido,  or  each 
for  the  whole  amount.^ 

Whether  a  part-owner  has  a  lien  on  the  shares  of  other  part- 
owners,  or  on  the  whole  vessel^  for  advances  or  balances  due  on 
account  of  the  vessel,  is  not  certain  on  authority..  Perhaps  the 
current  of  adjudication  may  be  adverse  to  this  lien,  permitting 
it  only  where  the  principles  of  the  law  of  agency  would  give  it. 
But  there  is  not  wanting  authority,  nor,  as  we  think,  strong  rea- 
son for  saying  that  this  lien  should  belong  to  the  part-ownership 
of  a  ship,  as  such.^ 


SECTION  IV. 

OF    THE   LIABILITIES    OF    MORTGAGEES. 

A  mortgagee  of  a  ship,  who  is  in  possession,  is,  in  general,  lia- 

enter  into  contracts  of  affreightment,  is  superseded  in  the  port  of  the  owners,  so  is  it 
by  the  presence  of  tlic  ship's-husband,  or  the  knowledge  of  the  contracting  parties,  that 
a  ship's-husband  has  been  appointed.  1  Bell,  Comm.  411,  §  429,  (4th  ed.);  Id.  504, 
505,  (5th  ed.)  See  also  Campbell  v.  Stein,  6  Dow.  135  ;  Williams  v.  Th'omas,  6  Esp. 
18. 

1  Reed  v.  White,  5  Esp.  122  ;  Cheever  v.  Smith,  15  Johns.  276  ;  Wvatt  v.  Marquis 
of  Hertford,  3  East,  147. 

-  See  ante,  p.  336,  n.  I,  et  seq.;  Bowdcn  v.  Home,  7  Bing.  716. 

>*  If  a  part-owner,  or  stranger,  as  ship's  husband,  makes  disbursements  for  a  voyage, 
and  comes  into  possession  of  the  proceeds  of  that  voyage,  upon  the  general  principles 
of  the  law  of  agency,  he  would  seem  to  Im'c  a  lien  thereon,  for  his  indemnity.  1  Bell, 
Comm.  503,  505  ;  Ex  parte  Young,  2  "Ves.  &  Beam.  242 ;  Holderness  v.  Schackels, 
8  B.  &  C.  612.  There  appears  to  be  no  decision  which  extends  the  lien  of  a  ship's 
husband,  who  is  not  a  part-owner.  If  the  part-owners  own  the  vessel  as  partners,  or  if 
they  become  partners  for  any  particular  adventure,  then,  undoubtedly,  each  one  has  a 
lien  for  his  advances  upon  the  partnership  property.  Mumford  v.  Nicoll,  20  Johns.  611 ; 
Coll.  on  Part.,  §§  125,  1187,  and  note;  Holderness  v.  Schackels,  supra.  But  upon  the 
question  whether  a  part-owner,  merely  as  such,  has  a  lien  for  his  advances,  there  is  a 
diversity  in  the  decisions.  In  England,  it  is  now  settled,  that  there  is  no  such  lien. 
Ex  parte  Young,  2  Ves.  &  Bea.  242;  Ex  parte  Harrison,  2  Rose,  76.  This  rule  was 
followed  in  Bradei^?;.. Gardner,  4  Pick.  456  ;  Merrill  v.  Bartlett,  6  Pick.  46;  Patton  v. 
Schooner  Randolpn,  Gilpin,  457 ;  and  by  Chancellor  Kent^  in  Nicoll  v.  Mumford,  4 
Johns.  Ch.  522.  But  in  Doddington  v.  Hallct,  1  Ves.  Sen.  407,  Lord  Hardwicke  held 
that  there  was  a  lien  in  such  cases,  and  this  decision,  although  overruled  in  England  by 
Lord  Eldon,  in  the  cases  just  cited,  was  followed  in  the  Court  of  Errors  in  New  York, 
in  Nicoll  v.  Mumford,  20*  Johns.  611,  and  in  Seabrook  v.  Rose,  2  Hill,  Ch.  (S.  Car.) 
553. 


CH.  XVn.]  OF   THE   LAW   OF   SHIPPING.  339 

ble  in  tlic  same  way  as  an  owncr.^  But  if  he  has  not  taken  pos- 
session, he  is  not  liable  for  supplies  or  repairs,  merely  on  the 
ground  that  his  security  is  strengthened  by  whatever  preserves 
or  increases  the  value  of  the  vessel.  Nor  can  he  be  made  liable, 
except  by  some  act  or  words  of  his  own,  which  show  that  credit 
was  properly  given  to  him,  or  that  he  has  come  under  a  valid  en- 
gagement to  assume  this  responsibility.^ 


SECTION  V. 

OF  THE  COXTRACT  OF  BOTTOMRY. 

By  this  contract,  a  ship  is  hypothecated  as  security  for  money 
borrowed.  The  form  of  this  contract  varies  in  different  places, 
and,  indeed,  in  the  same  place.  Its  essentials  are :  First,  that  the 
ship  itself  is  bound  for  the  payment  of  the  money.^    Second,  that 

1  Milii  V.  Spinola,  4  HilL  177  ;  S.  C.  6  Hill,  218;  Charaplin  v.  Butler,  18  Johns.  169. 
In  Tucker  z'.  Buffington,  15  Mass.  477,  the  defendants  had  taken  an  absolute  bill  of 
sale  of  a  vessel,  represented  her  as  their  property  at  the  custom-house,  taken  out  a  new 
certificate  of  enrolment  in  tlieir  own  names,  and  caused  the  name  of  the  place  of  resi- 
dence of  tlie  former  owners  to  be  erased  from  the  stern,  and  the  name  of  their  own 
place  of  residence  to  be  substituted.  They  were  held  liable  for  repairs,  although  there 
was  a  written  defeasance,  and  they  had  received  none  of  the  earnings  of  the  vessel, 
nor  acted  in  any  way  as  owners.  Parker,  C.  J.,  said:  "A  tradesman,  who  intended 
to  work  on  the  credit  of  the  owners  of  the  vessel,  would  have  no  means  of  conjectur- 
ing any  one  to  be  owner,  but  him  in  wliose  name  the  vessel  was  enrolled  ;  and  this  fact, 
together  with  the  alteration  on  the  stern,  would  give  a  better  indication  of  the  owner- 
ship than  actual  possession  of  the  vessel.  For,  in  almost  all  cases,  those  who  own  are 
not  those  who  are  employed  about  the  vessel." 

-  M'Intyre  v.  Scott,  8  Johns.  1.59;  Champlin  v.  Butler,  18  Johns.  169;  Phillips  v. 
Ledlej',  1  Wash.  C.  C.  226;  Brooks  v.  Bondsey,  17  Pick.  441  ;  Cutler  v.  Thurlo,  20 
Maine,  21.3 ;  Lord  v.  Ferguson,  9  N.  H.  380  ;  Fisher  v.  Willing,  8  Serg.  &  E.  118 ;  Hcs- 
keth  V.  Stevens,  7  Barb.  488;  Cordray  v.  Mordecai,  2  Rich.  518;  M'Carter  v.  Hunting- 
ton, 15  Johns.  298.  In  Brooks  v.  Bondsej',  Shau\  C.  J.,  said  :  We  think  it  now  too 
clear  to  admit  of  a  question,  that  a  mortgagee  of  a  vessel,  not  in  the  possession  or  em- 
ployment of  the  vessel,  not  having  ordered  or  authorized  supplies  and  repairs,  and  not 
holding  himself  out  to  the  world  as  an  owner, — as  in  the  case  of  Tucker  v.  Buffington, 
15  Mass.  477,  is  not  liable  for  the  supplies  or  repairs  furnished  to  such  vessel."  In 
Starr  v.  Knox,  2  Conn.  215,  it  was  held,  that  if  a  person  is  registered  as  absolute 
owner,  and  credit  is  given  for  supplies  on  the  strength  of  that,  he  will  be  liable,  although 
he  is  in  fact  a  mortgagee.  But  see  Ring  v.  Franklin,  2  Hall,  N.  Y.  1 ;  Duff  v.  Bayard, 
4  W.  &  S.  240.  The  question  whether  a  mortgagee,  not  in  possession,  was  liable  for 
repairs,  &c.,  seems  to  have  been  unsettled  in  England  at  one  time.  Westerdell  v.  Dale, 
7  T.  R.  306 ;  Tucker  v.  Buffington,  supra,  per  Parker,  C.  J.  But  it  seems  now  to  be 
determined  in  accordance  with  the  above  doctrine.  Jennings  v.  Griffiths,  Ryan  & 
Moody,  42 ;  Briggs  v.  Wilkinson,  7  B.  &  C.  30. 

3  In  Blaine  r.  The  Charles  Carter,  4  Cranch,  328,  CAase,  J.,  said  :  "A  bottomry 
bond  made  by  the  master,  vests  no  absolute  indefeasible  interest  in  the  ship  on  which 
it  is  founded,  but  gives  a  claim  upon  her,  which  may  be  enforced,  with  all  the  expedi- 
tion and  efficiency  of  the  admiralty  process."    See  also  Johnson  v.  Shippen,  2  Ld.  Raym. 


340  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVH. 

the  money  is  to  be  repaid  only  in  case  that  the  ship  performs  a 
certain  voyage,  and  arrives  at  its  terminus  in  safety;  or,  as  it  is 
sometimes  provided  in  modern  bottomries,  in  case  that  the  ship 
is  in  safety  on  a  certain  day;'  therefore  if  the  ship  is  lost  before 
the  termination  of  the  voyage  or  the  expiration  of  the  period,  no 
part  of  the  money  is  due,  or,  as  is  sometimes  said,  the  whole 
debt  is  paid  by  the  loss.^  As  the  lender  thus  consents  that  the 
repayment  of  the  money  shall  depend  upon  the  safety  of  the 
ship,  he  has  a  legal  right  to  charge  "  marine  interest,"  or  as  much 
more  than  legal  interest  as  will  serve  to  cover  his  risk.^ 

The  lender  may  require,  and  the  borrower  pay  more  than  law- 
ful interest  on  a  bottomry  bond,  without  usury.  And  it  has  been 
said  that  maritime  interest,  or  more  than  legal  interest,  must  be 
charged  by  the  contract,  or  it  is  not  a  loan  on  bottomry.^  But 
this,  we  think,  is  not  accurate.  We  hold  that  maritime  interest 
may  always  be  waived  by  the  lender ;  for  such  interest,  however 
usual,  or  nearly  universal,  is  not  of  the  essence  of  the  contract.^ 

984  :  Johnson  v.  Greaves,  2  Taunt.  344  ;  United  States  v.  Delaware  Ins.  Co.  4  Wash. 
C.  C.  418. 

1  The  Brig  Draco,  2  Suran.  157,  191  ;  Thorndike  v.  Stone,  11  Pick.  183.  The  case 
of  the  Brig  Draco  deserves  careful  attention,  as  containing  a  most  elaborate  discussion 
upon  the  return  of  bottomry  bonds,  in  the  light  of  the  general  maritime  lav/. 

-  The  Atlas,  2  Hagg,  48 ;  Bray  v.  Bates,  9  Mete.  237  ;  The  Brig  Draco,  2  Sumn. 
157;  Leland  v.  The  Medora,  2  W.  &  M.  92,  107;  Jennings  v.  Ins.  Co.  of  Penn.  4 
Binn.  244 ;  Rucher  v.  Conyngham,  2  Pet.  Adm.  295  ;  The  Mary,  1  Paine,  C.  C.  671 ; 
Greeley  v.  Watcrhouse,  19  Maine,  9  ;  Stanibank  v.  Penning,  11  C.  B.  51  ;  6  Eng.  L.  & 
Eq.  412.  In  Bray  v.  Bates,  Hubbard,  J.,  said  :  '•  Bottomry  is  a  contract  by  wliich  the 
ship,  or,  as  it  used  to  be  said,  the  keel  or  bottom  of  the  ship,  is  pledged  to  secure  the  pay- 
ment of  money  borrowed  by  the  owner  to  fit  her  for  sea,  repair  her,  &c. ;  and  the  agree- 
ment is,  that  if  the  ship  is  lost  by  any  of  the  perils  enumerated  in  the  contract,  the 
lender  loses  his  money;  but  if  tlie  ship  arrives  safely,  or  is  in  safety  at  the  termination 
of  the  time  stipulated  for  tlie  repayment  of  the  loan,  he  is  to  receive  back  his  principal 
sum  and  a  marine  interest,  at  the  rate  agreed  upon,  although  it  exceeds  the  legal  inter- 
est ;  and  in  this  event,  the  ship  and  the  borrower  himself  arc  equally  liable  to  the 
lender." 

'^  In  The  Atlas,  2  Hagg,  58,  Lord  Stowell  said  :  "  If  the  ship  arrived  safe,  the  title 
to  repayment  became  vested ;  but  if  the  ship  perished  in  iiincre,  the  loss  fell  entirely 
upon  the  lender.  Upon  that  account,  the  lender  was  entitled  to  demand  a  much  higher 
interest  than  the  current  interest  of  money  in  ordinary  transactions.  It  partook  of 
the  nature  of  a  wager,  and  therefore  was  not  limited  to  the  ordinary  interest ;  the  dan- 
ger lay  not  upon  the  borrower,  as  in  ordinary  cases,  but  upon  the  lender,  who  was 
therefore  entitled  to  charge  his  pretiuin  perecidi,  his  valuation  of  the  danger  to  which 
he  was  exposed.  A  contract  similar  to  this  upon  the  cargo  is  called  respondentia,  but  is 
of  rarer  occurrence." 

*  Leland  v.  Medora,  2  W.  &  M.  92, 107 ;  The  Mary,  1  Paine,  C.  C.  671. 

s  In  The  Emancipation,  1  W.  Rob.  124,  130,  Dr.  Lusliington  said :  "  I  am  aware  that  it 
is  not  absolutely  necessary  that  a  bottomry  bond  sliould  carry  maritime  interest,  and 
that  a  party  may  be  content  with  ordinary  interest ;  but  when  tlie  character  of  an  instru- 
ment is  to  be  collected  from  its  contents,  and  wlicn  the  argument  in  sujiport  of  the 
bond  is,  that  the  advance  of  the  money  was  attended  with  risk,  it  is  a  material  circum- 
stance, that  only  an  ordinary  rate  of  interest  should  be  demanded.    It  is  impossible  to 


CH.  XVII.]  OP   THE   LAW   OF   SHIPPING.  341 

If  the  interest  be  not  expressed  in  the  contract,  it  will  gener- 
ally be  presumed  to  be  included  in  the  principal.^ 

If,  by  the  contract,  the  lender  takes  more  than  legal  interest, 
and  yet  the  money  is  to  be  paid  to  him,  although  the  ship  be  lost, 
it  is  not  a  contract  of  bottomry,  and  is  subject  to  all  the  conse- 
quences of  usury .^  But  the  lender  may  take  security  for  his 
debt  and  marine  interest,  additional  to  the  ship  itself,- provided 
the  security  is  given,  like  the  ship  itself,  to  make  the  payment 
certain  when  it  becomes  due  by  the  safety  of  the  ship,  but  is 
wholly  avoided  if  the  ship  be  lost.^ 

The  most  common  contracts  of  bottomry  are  those  entered  into 
by  the  master  in  a  foreign  port,  where  money  is  needed  and  can- 
not otherwise  be  obtained.'^  Therefore  the  security  goes  with 
the  ship,  and  the  debt  may  be  enforced,  as  soon  as  it  is  payable, 
against  the  ship,  wherever  the  ship  may  be.^  In  Europe,  con- 
tracts of  bottomry  are  seldom  made  otherwise  now.^     But  in  this 

conceive  that  any  merchant,  carrying  on  his  business  with  ordinary  care  and  caution, 
would  be  content  to  divest  himself  of  all  security  for  the  loan  of  his  money  but  a  bot- 
tomry bond,  and  ask  no  greater  emolument  than  the  ordinary  rate  of  6/.  per  cent.,  if 
the  repayment  of  such  a  loan  was  to  depend  upon  the  safe  arrival  of  the  vessel  at  the 
port  of  her  destination,  after  performing  such  a  voyage." 

1  The  Mary,  1  Paine,  C.  C.  671. 

-  The  Atlas,  2  Hagg,  58,  73,  and  cases  cited  ante,  p.  340,  n.  2. 

8  Thorndike  v.  Stone,  11  Pick.  183.  In  the  late  case  of  Steinbank  v.  Shcpard,  13  C. 
B.  418;  20  Eng.  L.  &  E.  547,  Parke,  B.,  said:  "  We  must  not  be  supposed  to  intimate 
a  doubt  that  a  bottomry  bond  may  not  be  given  at  the  same  time  with,  or  as  a  collateral 
security  for,  bills  of  exchange  drawn  on  the  owner.  This  was  clearly  laid  down  by 
Dr.  Lushington,  in  the  case  of  The  Emancipation,  1  W.  Rob.  124,  on  the  authority  of 
many  cases.  If  necessaries  can  be  provided  on  the  personal  credit  of  the  owners,  or 
upon  a  bill  of  exchange  drawn  by  the  master  upon  them,  a  bottomry  bond  cannot 
afterwards  be  given  to  secure  the  same  debt,  because  the  necessity  of  hypothecating  the 
ship  is  the  condition  of  the  master's  authority  to  do  so.  The  Augusta,  1  Dod.  Adm. 
Rep.  283.  But  bills  of  exchange  may  be  drawn  on  account  of  the  supply,  and  a  bot- 
tomry bond  given,  at  the  same  time,  as  a  collateral  security,— in  this  sense,  that,  if  the 
bills  of  exchange  are  honored— The  Nelson,  1  Hagg,  Adm.  174— that  is,  accepted  and 
paid,  if  they  require  acceptance,  or  paid  if  they  do  not,  as  the  case  may  be— the  bot- 
tomry is  discharged ;  and,  though  the  ship  arrive,  the  maritime  interest  is  not  payable  ; 
if  dishonored,  the  amount  is  payable  on  arrival,  by  means  of  the  remedy  against  the 
ship,  and  in  that  case,  with  maritimal  interest.  The  Catherine,  3  Hagg,  Adm.  Rep.  253 ; 
The  Emancipation,  1  W.Rob.  129;  The  Atlas,  2  W.  Rob.  502.  So  that,  in  that 
event,  if  the  bills  are  accepted,  the  creditor  would  have  a  double  remedy— one  against 
the  person  of  the  debtor,  and  one  against  the  ship.  But  the  law  forbids  the  creditor  to 
have  a  direct  remedy  on  the  bond  itself  against  the  owner  as  well  as  the  ship,  audit 
makes  it  essential  to  the  remedy  against  the  ship,  that  it  should  be  contingent  on  its 
safe  arrival ;  and  this,  whether  maritime  interest  is  required  or  not."  See  also  The 
Hunter,  Ware,  253;  Bray  v.  Bates,  9  Mete.  237;  The  Jane,  1  Dods.  46G. 

■*  As  to  the  authority  o"f  the  master  to  enter  into  this  contract,  see  infra. 

5  See  ante,  p.  339,  n.  3. 

^  In  England,  the  admiralty  jurisdiction  extends  to  bottomry  bonds  when  made 
abroad  for  the  necessities  of  the  vovage,  whether  made  by  the  master  or  the  owner. 
Duke  of  Bedford,  2  Hagg.  294,  Biit  it  seems  that  it  does  not  extend  to  those  made 
by  the  owner  in  the  home  port.     Abbott  on  Shipping,  p.  153  ;  Johnson  v.  Shippen,  2 

29* 


342  ELEMENTS   OF  MERCANTILE   LAW.  [CIL   XVII. 

country,  these  are  frequently  made  by  the  owner  himself,  in  the 
home  port.  And  sometimes  they  are  nothing  else  than  contri- 
vances to  get  more  than  legal  interest.  Thus,  if  A  borrows 
f  20,000  on  his  ship  for  one  year,  at  fifteen  per  cent,  interest,  con- 
ditioned that  if  the  ship  be  lost  the  money  shall  not  be  paid,  and 
the  lender  insures  the  ship  for  three  per  cent.,  he  gets  twelve  per 
cent,  interest,  which  is  twice  the  legal  interest,  and  yet  incurs  no 
risk.i  If  such  a  contract  were  obviously  and  certainly  merely 
colorable,  and  a  pretence  for  getting  usurious  interest,  the  courts 
would  probably  set  it  aside  ;  but  it  might  be  difficult  to  show 
this.2 

If  the  money  is  payable  at  the  end  of  a  certain  voyage,  and  the 
owner  or  his  servant,  the  master,  terminate  the  voyage  sooner, — 
either  honestly,  from  a  change  in  their  plan,  or  dishonestly,  by  in- 
tentional loss  or  wreck, — the  money  becomes  at  once  due.^ 

In  admiralty,  and,  it  may  be  supposed,  in  common-law  courts, 
a  bottomry  bond,  made  abroad,  would  override  all  other  liens  or 
engagements  except  the  claim  for  seamen's  wages.*  The  reason 
is  that  a  bottomry  bond  is  supposed  to  be  made  from  necessity, 
and  to  have  provided  the  only  means  by  which  the  ship  could  be 
brought  home.'^  For  the  same  reason,  a  later  bond  is  sustained 
as  against  an  earlier,  and  the  last  against  all  before  it.*^  It  is  pos- 
sible, however,  that  a  distinction  might  be  taken  between  liens 

Ld.  Raym.  983,  per  Ilolt,  C.  J.;  Busk  v.  Fearon,  4  East,  319,  per  Lawrence,  J.;  The 
Barbara,  4  Rob.  1.     But  see  The  Brig  Draco,  2  Sunin.  157,  170,  per  Slorij,  J. 

1  The  question  has  been  raised  wlietlier  the  admiralty  jurisdiction  of  the  United 
States  courts  extends  to  cases  of  this  nature.  In  the  case  of  The  Draco,  2  Sunin.  157, 
Mr.  Justice  Story,  after  much  consideration,  decided  the  question-  in  the  affirmative. 
See  also  AVilmer  r.  The  Smiiax,  2  Pet.  Adra.  295;  The  Hull  of  a  New  Ship,  Daveis, 
199;  Cornish  v.  Murphy,  2  Bro.  Civ.  &  Adm.  Law,  App.  p.  530;  The  Sloop  Mary, 

1  Paine,  C.C.  671.  But  see  Hurry  v.  The  John  &  Alice,  1  Wash.  C.  C.  293,  and 
Blaine  v.  The  Charles  Carter,  4  Cranch,  328,  per  Chase,  J. 

2  Thorndike  v.  Stone,  11  Pick.  183,  per  Putnam,  J. 

'^  The  Brig  Draco,  2  Sumn.  157  ;  2  Emerig.  Traite  a  la  Grosse,  ch.  8,  §  4. 

*  The  Ahne,  1  W.  Rob.  Ill ;  Madonna  D'ldra,  1  Dods.  37,  40;  The  Sydney  Cove, 

2  Dods.  1,  13;  The  Virgin,  8  Pet.  538.  In  the  ease  of  The  Madonna  DTdra,  Sir 
W-  Scott  said :  "  It  must  be  taken  as  the  universal  law  of  this  court,  that  mariners' 
wages  take  precedence  of  bottomry  bonds.  These  are  sacred  liens,  and,  as  long  as  a 
plank  remains,  the  sailor  is  entitled,  against  all  other  persons,  to  the  proceeds,  as  a 
security  for  his  wages."  See  also  The  Kammerhevie  Rosenkrants,  1  Hagg.  62.  But 
in  The  Mary  Ann,  9  Jurist,  94,  Dr.  Lusliimjton  expressed  an  opinion  that  wages,  earned 
subsequently  to  a  bottomry  bond,  would  be  entitled  to  priority,  but  that  wages,  earned 
antecedently,  would  not.  In  The  Selina,  2  Notes  of  Cases,  18,  such  was  held  to  be  the 
rule,  as  to  the  lien  or  salvage. 

"^  Hence  the  privilege  of  priority  is  confined  to  bonds  given  under  the  pressure  of 
necessity  in  a  foreign  port.     Rhadamanthc,  1  Dods.  201. 

6  The  Sydney  Cove,  2  Dods.  1  ;  The  Betsey,  1  Dods.  289 ;  The  Eliza,  3  Hagg.  87. 


I 


en.  xvn.]  OF  the  law  of  shipping.  343 

created  by  contract  and  those  arising  from  tort,  and  that  a  lien 
by  bottomry  would  be  preferred  over  all  the  former,  but  not  the 
latter.i 

The  lien  of  bottomry  depends  in  no  degree  on  possession  ;  but 
an  unreasonable  delay  in  enforcing  it  will  destroy  the  lien.^ 

There  may  be  a  mortgage  of  a  ship,  as  of  any  chattel,  as  we 
have  already  said ;  but  this  is  a  very  different  thing  from  a  loan 
on  bottomry.  We  have  seen  that  the  statute  of  1850  requires 
mortgages  of  ships  to  be  recorded,  but  does  not  require  that  bot- 
tomry bonds  should  be.  There  is  excellent  reason  for  this  distinc- 
tion in  reference  to  bottomry  bonds  made  abroad,  but  none  as  to 
those  made  at  home.^ 


SECTION  VI. 

OF   THE   EMPLOYMENT   OF   A   SHIP   BY   THE   OWNER. 

An  owner  of  a  ship  may  employ  it  in  carrying  his  own  goods, 
or  those  of  another.  He  may  carry  the  goods  of  others,  while  he 
himself  retains  the  possession  and  direction  of  the  ship  ;  or  he 
may  lease  his  ship  to  others,  to  carry  their  goods.  In  the  first 
case,  he  carries  the  goods  of  others  on  freight ;  in  the  second,  he 
lets  his  ship  by  charter-party.  We  shall  consider  first  the  car- 
riage of  goods  on  freight. 

He  may  load  his  ship  as  far  as  he  can  with  his  own  goods,  and 
then  take  the  goods  of  others  to  fill  the  vacant  space ;  or  he  may 
put  up  his  ship  as  "  a  general  ship,"  to  go  from  one  stated  port 
to  another,  and  to  carry  the  goods  of  all  who  offer. 

It  may  be  remarked  that  the  word  "freight"  is  used  in  different 
ways ;   sometimes,  to  designate  the  goods  or  cargo  that  is  car- 

1  In  the  case  of  The  Aline,  1  W.  Eob.  Ill,  a  collision  occurred,  and  the  vessel,  to 
the  negligence  of  whose  crew  the  collision  was  owing,  put  into  Cowes  for  repairs.  D., 
without  knowledge  of  tlie  claim  against  her  for  the  collision,  advanced  money  for  re- 
pairs, under  an  agreement  of  the  master  to  execute  a  bottomry  bond.  Held,  tiiat  _D. 
was  entitled  to  priority  only  to  the  extent  of  the  increased  value  of  the  vessel,  arising 
from  the  repairs.  See  Law'  lleporter  of  IMay,  1853,  p.  5,  "  On  the  Peculiarities  of  Mar- 
itime Liens." 

-  The  Rebecca,  5  Rob.  102  ;  Blaine  v.  The  Charles  Carter,  4  Cranch,  328. 

3  In  The  Brig  Draco,  2  Sumn.  157,  180,  it  was  held,  that  the  nature  of  a  bottomry 
bond  did  not  require  that  the  money  loaned  should  be  for  the  necessities  or  the  use  of 
the  ship.  There  certainly  seems  to  be  no  reason  wiiy  a  loan  made  for  general  purposes 
in  a  home  port,  secured  "by  a  bottomry  bond,  should  have  any  privileges  over  a  loan 
secured  by  mortgage. 


344  elements'  of  mercantile  law.  [oil  xvii. 

ried,  and  there  is  some  reason  for  believing  that  this  was  its 
earliest  sense ;  ^  sometimes  to  denote  the  money  which  the  ship- 
per of  the  goods  pays  to  the  owner  of  the  ship,  for  their  trans- 
portation. And  not  unfrequently,  when  the  word  is  used  in  this 
latter  sense,  the  word  money  is  added,  as  the  phrase  "  freight 
money  "  leaves  no  question  as  to  what  is  meant.  Sometimes  a 
ship-owner  who  lets  the  whole  burden  of  his  ship  to  another,  is 
said  to  carry  the  shipper's  goods  on  freight.  But  the  most  com- 
mon meaning  of  the  word,  especially  in  law  proceedings,  is  the 
money  earned  by  a  ship  not  chartered,  for  the  transportation  of 
the  goods ;  and  in  this  sense  we  shall  use  it.^ 

Nearly  the  whole  law  of  freight  grows  out  of  the  ancient  and 
universal  principle  that  the  ship  and  the  cargo  have  reciprocal 
duties  or  obligations  towards  each  other,  and  are  reciprocally 
pledged  to  each  other  for  the  performance  of  these  duties.  In 
other  words,  not  only  is  the  owner  of  the  ship  bound  to  the  owner 
of  the  cargo,  as  soon  as  he  receives  it,  to  lade  it  properly  on 
board,  take  care  of  it  while  on  board,  carry  it  in  safety,  so  far  as 
the  seaworthiness  of  the  ship  is  concerned,  to  its  destined  port, 
and  there  deliver  it,  all  in  a  proper  way,  but  the  ship  itself  is 
bound  to  the  discharge  of  these  duties.  That  is  to  say,  if.  by 
reason  of  a  failure  in  any  of  these  particulars,  the  shipper  of  the 
goods  is  damnified,  he  may  look  to  the  ship-owner  for  indemnity  ; 
but  he  is  not  obliged  to  do  so,  because  he  may  proceed  by  proper 
process  against  the  ship  itself.^  This  lien,  like  that  of  bottomry, 
is  not  dependent  upon  possession,  but  will  be  lost  by  delay,  espe- 
cially if  the  vessel  passes  into  the  hands  of  a  purchaser  for  value 
without  notice.*     On  the  other  hand,  if  the  ship  discharges  all  its 

1  Bright  I'.  Cowper,  1  Brownlow,  21,  (A.  D.  1620.)  The  report  of  that  case  com- 
mences as  follows :  "  Action  of  covenant  brouglit  upon  a  covenant  made  by  the  mer- 
chant with  the  master  of  a  ship,  that  if  he  would  bring  his  freight  to  such  a  port,  he 
would  pay  him  such  a  sum." 

'^  See  Pothier,  Traite  de  Charte-parties,  n.  1  ;  Valin,  vol.  i.  p.  36.  In  policies  of 
insurance,  the  word  freight  frequently  designates  the  increased  value  accruing  to  a  ship- 
owner from  the  transportation  of  his  own  goods.  Flint  v.  Flemyng,  1  B.  &  Ad.  45 ; 
Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429.     See  also  Clark  v.  Ocean  Ins.  Co.  16  Pick.  289. 

^  Cleirac,  Les  Us  et  Conturnes  de  la  Mer,  p.  72  ;  Pothier,  Charte-partie,  No.  48.  It 
seems  that  in  England  the  admiralty  courts  have  no  jurisdiction  to  enforce  the  lien  upon 
the  ship  in  such  cases.  Abbott  on  Shipping,  127  ;  The  Volunteer,  1  Sumn.  551.  But 
in  this  country  a  suit  to  enforce  this  lien,  both  on  the  ship  and  cargo,  is  held  to  come 
within  the  maritime  jurisdiction.  The  Volunteer,  supra;  The  llcbecca.  Ware,  188; 
The  Phoebe,  id.  263;  The  Waldo,  Daveis,  161  ;  The  Brig  Casco,  id.  184;  The  Kobert 
Morris  v.  Williamson,  6  Ala.  50;  Clark  v.  Barnwell,  12  How.  272;  Rich  v.  Lambert, 
id.  347. 

*  The  maritime  lien  on  the  ship  does  not  include  or  require  possession.     The  word 


CH.  XVII.]  OF   THE   LAW   OF   SHIPPING.  345 

duties,  the  owner  may  look  to  the  sliippcr  for  the  payment  of  his 
freight ;  but  is  not  obliged  to  do  so,  because  he  may  keep  his 
hold  upon  the  goods,  and  refuse  to  deliver  them  until  the  freight 
is  paid.^ 

The  party  who  sends  the  goods  may  or  may  not  be  the  owner 
of  them.  And  he  may  send  them  either  to  one  who  is  the  owner, 
for  whom  the  sender  bought  them,  or  to  one  who  is  only  the 
agent  of  the  owner.  In  either  of  these  cases,  the  sender  is  called 
the  consignor  of  the  goods,  and  the^party  to  whom  they  are  sent 
is  called  the  consignee.  The  sending  them  is  called  the  consign- 
ing or  the  consignment  of  them ;  but  it  is  quite  common  to  hear 
the  goods  themselves  called  the  consignment. 

The  rights  and  obligations  of  the  ship-owner  and  the  shipper 
are  stated  generally  in  an  instrument  of  which  the  origin  is  lost  in 
its  antiquity,  and  which  is  now  in  universal  use  among  commer- 
cial nations,  with  little  variety  of  form.  It  is  called  the  Bill  of 
Lading.^  It  should  contain  the  names  of  the  consignor,  of  the 
consignee,  of  the  vessel,  of  the  master,  of  the  place  of  departure, 
and  of  the  place  of  destination  ;  also  the  price  of  the  freight,  with 
primage  and  other  charges,  if  any  there  be,  and  either  in  the  body 
of  the  bill  or  in  the  margin,  the  marks  and  immbers  of  the  things 
shipped,  with  sufficient  precision  to  designate  and  identify  them. 

is  used  in  maritime  law  not  in  tlie  strict  legal  sense  in  which  we  understand  it  in  courts 
of  common  law,  in  which  tliere  could  he  no  lien  where  there  was  no  possession,  actual 
or  constructive ;  but  to  express,  by  analogy,  the  nature  of  claims  which  neither  pre- 
suppose nor  originate  in  possession.  Harmcr  v.  Bell,  22  Eng.  Law  and  Eq.  72.  But 
it  will  nevertheless  be  lost  if  not  enforced  without  unreasonable  delay,  especially  if  the 
vessel  has  come  into  the  hands  of  a  bond  fide  purchaser  without  notice  of  the  lien.  The 
Bark  Cliusan,  2  Story,  455,  468 ;  Packard  v.  The  Louisa,  2  W.  &  M.  48. 

1  Tlie  Schooner  Volunteer,  1  Sumn.  551,  569;  Drinkwater  v.  The  Brig  Spartan, 
Ware,  149  ;  Van  Bokkelin  v.  Ligersoll,  5  Wend.  315;  Certain  Logs  of  Mahogany, 
2  Sumn.  589;  Molloy,  Lib.  2,  cli.  4,  §  12;  Beawes,  Lex  Merc,  tit.  Freight;  Anon. 
12  Mod.  447,  5n.  This  lien  is  undoubtedly  derived  from  the  maritime  law,  and  was  in 
its  origin  like  the  "  privilegium "  of  the  civil  law,  a  claim  which  follows  the  goods 
wherever  they  go.  It  is  now  usually  construed  as  a  right  to  retain  possession  of  the 
goods  until  the  freight  is  paid ;  and  if  the  possession  is  parted  with,  the  lien  is  lost,  or 
considered  as  waived.  The  Schooner  Volunteer ;  Certain  Logs  of  Mahogany;  Van 
Bokkelin  v.  Ingersoll ;  Packard  v.  The  Louisa,  2  W.  &  M.  48,  58  ;  Perkins  v.  Hill, 
2  W.  &  M.  158, 166  ;  Phillips  v.  Rodie,  15  East,  547,  554.  In  the  last  case,  Lord  Ellen- 
horowjh  said  :  "  What  is  a  lien  for  freight,  but  a  right  to  detain  the  goods  on  board  until 
the  freight  wliich  lias  been  actually  earned  upon  them,  which  is  capable  of  being  calcu- 
lated and  ascertained,  has  been  paid,  an(i  where  the  owner  of  the  goods  knows  what  he 
is  to  tender?"  The  admiralty  cases  above  cited  sustain  the  same  doctrine.  But 
where  a  part  of  a  lot  of  goods  belonging  to  one  person  has  been  delivered,  there 
is  a  lien  on  the  remainder  for  the  freiglit  on  the  whole.  Sodcrgren  v.  Flight,  6  East, 
622.  Delivery  of  a  part  is  not  a  waiver  of  the  lien  on  the  residue.  MoUer  v.  Young, 
30  E.  L.  &  E.  345. 

■•^  For  forms  of  Bills  of  Lading,  see  Grant  v.  Norway,  10  C.  B.  665  ;  Renteria  v. 
Rudiug,  1  Mood.  &  Malk.  511. 


346  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

And  it  should  be  signed  by  the  master  of  the  ship,  who,  by  the 
strict  maritime  law,  has  no  authority  to  sign  a  bill  of  lading  until 
the  goods  are  actually  on  board.'  There  is  some  relaxation  of 
this  rule  in  practice  ;  but  it  should  be  regretted  and  avoided. 

Usually  one  copy  is  retained  by  the  master,  and  three  copies 
are  given  to  the  shipper ;  one  of  them  he  retains,  another  he 
sends  to  the  consignee  with  the  goods,  and  the  other  he  sends  to 
the  consignee  by  some  other  conveyance. 

The  delivery  promised  in«the  bill  is  to  the  consignee,  or  his 
assigns ;  and  the  consignee  may  designate  his  assigns  by  an  in- 
dorsement signed  by  him  on  the  bill,  and  order  the  delivery  to 
them,  or  the  consignee  may  indorse  the  bill  in  blank,  and  any 
one  who  acquires  an  honest  title  to  it  may  write  over  the  signa- 
ture an  order  of  delivery  to  himself.^  It  is  held  that  the  con- 
signee has  this  power,  if  such  be  the  usage,  even  if  the  word 
"assigns"  be  omitted.^  Such  indorsement  not  only  gives  the 
indorsee  a  right  to  demand  the  goods,  but  passes  to  him  the 
property  in  the  goods."^  It  is  said,  however,  that  if  the  goods  are 
refused,  an  action  on  the  bill  must  be  brought  in  the  name  of  the 
original  consignee.^ 

As  the  bill  of  lading  is  evidence  against  the  ship-owner,  as  to 
the  reception  of  the  goods,  and  their  quantity  and  quality,  it  is 
common  to  say  "  contents  unknown,"  or  "  said  to  contain,  &c.^ 
• 

1  Grant  v.  Norway,  10  C.  B.  665  ;  2  Eng.  L.  &  Eq.  337  ;  Hubbersty  v.  Ward,  s'Exch. 
330;  18  Eng.  L.  &  Eq.  551.     See  also,  Rowley  v.  Bigelow,  12  Pick.  307. 

^  In  Chandler  v.  Sprague,  5  Mote.  306,  Shaw,  C.  J.,  said  :  "  Oi-dinarily  the  name  of  a 
consignee  is  inserted ;  and  then  such  consignee,  or  his  indorsee,  may  receive  the  goods 
and  acquire  a  special  property  in  them.  Sometimes  the  shipper,  or  consignor,  is  him- 
self named  as  consignee,  anil  then  the  engagement  of  the  ship-owner  or  master  is,  to 
deliver  them  to  him  or  his  assigns.  Sometimes  no  person  is  named,  the  name  of  the 
consignee  being  left  blank,  which  is  understood  to  import  an  engagement  on  the  part  of 
the  master  to  deliver  the  goods  to  the  person  to  whom  the  shipper  or  consignor  shall 
order  the  delivery,  or  to  the  assignee  of  such  person."'  See  Lickbarrow  v.  Mason,  2 
Term,  63  ;  6  East,  21  ;  1  Smith,  Lead.  Cas6^,3S8. 

3  llenteria  v.  Ending,  1  Mood.  &  Malk.  511  ;  1  Parsons  on  Cont.  239. 

*  Lickbarrow  v.  Mason,  2  Term,  63 :  I  Smith,  Lead.  Cases,  388;  Chandler  v.  Belden, 
18  Johns.  157  ;   Chandler  v.  Sprague,  5  Mete.  306 ;  1  Parsons  on  Cont.  239. 

^  See  Thompson  v.  Downing.  14  M.  &  W.  403,  an  action  was  brought  on  a  bill  of 
lading,  in  the  name  of  the  consignee.  It  Avas  held,  that  the  action  would  not  lie.  Alder- 
son,  B.  said:  "  Because  in  Lickbarrow  v.  Masom  a  bill  of  lading  was  held  to  bo  negotia- 
ble, it  has  been  contended  that  that  instrument  possesses  all  the  properties  of  a  bill  of 
excliange ;  but  it  would  lead  to  absurdity  to  carry  the  doctrine  to  that  length.  The 
word  '  negotiable  '  was  not  used  in  the  sense  in  which  it  is  used  as  applicable  to  a  bill 
of  c.Kchange,  but  as  passing  the  property  in  the  goods  only."  See  also,  Dows  v.  Cobb, 
12  Barb.  310. 

•^  In  Clark  v.  Barnwell,  12  IIow.  272,  284,  in  the  bill  of  lading,  after  the  usual  clause 
that  the  goods  were  shipped  in  good  order,  there  was  added,  ''  contents  unknown."  It 
was  held,  '■  that  the  acknowledgment  of  the  master  as  to  the  condition  of  tlie  goods 


OH.  xvii.]  OF  THE  LAW  oii:  snippiNO.  347 

But  without  any  words  of  this  kind,  the  bill  of  lading  is  not  con- 
clusive upon  the  ship-owner,  in  favor  of  the  shipper,  who  may 
show  that  its.  statements  were  erroneous  through  fraud  or  mis- 
take.^ But  the  ship-owner,  or  master,  is  bound  much  more 
strongly,  and  perhaps  conclusively,  by  the  words  of  the  bill  of 
lading,  in  favor  of  a  third  party,  who  has  bought  the  goods  for 
value  and  in  good  faith,  on  the  credit  of  the  bill  of  lading.^ 

The  law-merchant  gives  to  the  ship,  as  we  have  seen,  a  lien 
on  the  goods  for  the  freight.^  The  master  cannot  demand  the 
freight  without  a  tender  of  the  goods  at  the  proper  time,  in  the 
proper  way,  to  the  proper  person,  and  in  a  proper  condition;* 
but  then  the  consignee  is  not  entitled  to  the  goods  without  pay- 
ing freight.  The  law  gives  this  lien,  whether  it  be  expressed  or 
not.^  But  it  may  be  expressly  waived.  The  bill  of  lading,  or 
other  evidence,  may  show  the  agreement  of  the  parties,  that  the 
goods  should  be  delivered  first,  and  the  freight  not  be  payable 
until  a  certain  time  afterwards  ;  and  such  an  agreement  is  in 
general  a  waiver  of  the  lien.^ 

when  received  on  board,  extended  only  to  the  external  condition  of  the  cases,  excluding 
any  implication  as  to  the  quantity  or  quality  of  the  article,  condition  of  it  at  the  time 
received  on  board,  or  whether  properly  packed  or  not  in  the  boxes." 

1  Barrett  i'.  Rogers,  7  Mass.  297 ;  Benjamin  v.  Sinclair,  1  Bailey,  174;  Hastings  v. 
Pepper,  1 1  Pick.  41 ;  O'Brien  v.  Gilchrist,  34  Maine,  554;  Babcock  v.  May,  4  Ohio,  334 ; 
Bates  V.  Todd,  1  M.  &  Rob.  106  ;  Kuox  v.  The  Ninetta,  Crabbe,  534. 

'^  ''As  between  the  shipper  of  the  goods  and  the  owner  of  the  vessel,  a  bill  of  lading 
may  be  explained  as  far  as  it  is  a  receipt ;  that  is,  as  to  the  quantity  of  the  goods  shipped, 
and  tlic  like ;  but  as  between  the  owner  of  the  vessel  and  an  assignee,  for  a  valuable 
c(M|sideration,  paid  on  the  strength  of  the  bill  of  lading,  it  may  not  be  explained,"  — 
Per  Edmonds^  J.,  in  Dickerson  v.  Seelye,  12  Barb.  102;  Howard  v.  Tucker,  1  B.  &  Ad. 
712.  See  also,  Berkley  v.  Watling,  7  Ad.  &  El.  29.  But  where  a  bill  of  lading  was 
signed  by  tlie  master  before  the  goods  were  shipped,  it  was  held  not  to  be  binding  upon 
the  owner,  even  in  the  hands  of  an  indorsee  for  value.  Grant  v.  Norway,  10  C.  B. 
665;  2  Eng.  L.  &  Eq.  337;  Hubbersty  v.  Ward,  8  Exch.  330;  18  Eng.  L."  &  Eq.  551. 
But  as  far  as  a  bill  of  lading  contains  a  contract,  and  not  an  acknowledgment,  it  is  gov- 
erned by  the  ordinary  rules  of  construction,  and  cannot  be  varied  by  parol  evidence. 
2  Parsons  on  Cont.  67 ;  Babcock  v.  May,  4  Ohio,  334;  Wolfe  v.  Myers,  3  Sandf.  7; 
Ward  V.  Whitney.  3  Sandf.  399. 

2  See  ante^  p.  345,  n.  1. 

*  Lane  v.  Penniman,  4  Mass.  91 ;  Certain  Logs  of  Mahogany,  2  Sumn.  589;  Phelps 
V.  Williamson,  5  Sandf.  578.  In  Bradstreet  v.  Baldwin,  11  Mass.  229,  the  cargo  was 
seized  by  the  government  for  the  default  of  the  shipper.  The  court  held,  that,  "  if  there 
was  evidence  of  a  readiness,  on  the  part  of  the  plaintiffs,  to  deliver  the  cargo  to  the 
defendant,  and  the  actual  delivery  and  discharge  of  it  had  been  prevented  by  the  neglect 
of 'the  defendant  to  receive  it,  or  if  the  delivery  was  intercci)ted  by  an  attachment,  or 
seizure  for  a  default  of  the  defendant,  the  plaintiffs  would  be  entitled  upon  this  evidence, 
as  they  would  be  upon  proving  an  actual  discharge  and  delivery  of  the  cargo."  See, 
also.  Palmer  v.  Lorillard,  16  Johns.  348. 

*  See  ante,  p.  345,  n.  1. 

^  In  the  Schooner  Volunteer,  1  Sumn.  551,  569,  Stori/,J.,  sftid:  "In  general,  it  is 
well  known,  that,  by  the  common  law,  there  is  a  lien  on  the  goods  shipped,  for  the 
freight  due  thereon,  whether  it  arrive  under  a  common  bill  of  lading,  or  under  a  charter- 
party.    But  then  this  lien  may  be  waived  by  consent ;  and  in  cases  of  charter-parties, 


( 


348  ELEMENTS    OP  MERCANTILE    LAW.  [CH.  XVIL  ; 

At  common  law  this  agreement  to  deliver  the  goods  before 
payment  of  freight,  is  destructive  of  the  lien.  But  in  admiralty 
this  lien  would,  we  think,  be  considered  rather  as  the  privilegium 
of  the  civil  law,  than  the  lien  of  common  law;  and  therefore  not 
td  be  so  entirely  dependent  on  the  mere  possession.  Unless  the 
ship-owner  intended  to  give  up  his  security  on  the  goods,  a  court 
of  admiralty  would  be  disposed  so  to  construe  such  an  agreement 
as  to  give  the  consignee  possession  of  the  goods,  for  a  temporary 
purpose,  as  to  ascertain  their  condition,  or,  possibly,  that  he 
might  offer  them  in  the  market,  and  by  an  agreement  to  sell, 
raise  the  means  of  paying  the  freight;  and  yet  would  preserve 
for  the  master  his  security  upon  the  goods  for  a  reasonable  time, 
unless,  in  the  mean  time,  they  should  actually  become,  by  sale, 
the  property  of  a  bond  fide  purchaser.' 

The  contract  of  affreightment  is  entire  ;  therefore  no  freight  is 
earned  unless  the  whole  is  earned,  by  carrying  the  goods  quite  to 
the  port  of  destination.^  If  by  wreck,  or  other  cause,  the  trans- 
portation is  incomplete,  no  absolute  right  of  freight  grows  out  of 
it.  We  say  no  absolute  right,  because  a  conditional  right  of 
freight  does  exist.  To  understand  this,  we  must  remember 
that  as  soon  as  the  ship  receives  the  goods,  it,  on  the  one  hand, 

it  often  becomes  a  question,  whether  the  stipulations  are,  or  are  not,  inconsistent  with 
the  existence  of  the  lien.  For  instance,  if  the  delivery  of  the  goods  is  by  the  charter- 
party  to  ])recede  the  payment,  or  security,  of  payment  of  freight;  such  a  stipulation  fur- 
nishes a  clear  dispensation  with  the  lien  for  freight,  for  it  is  repugnant  to  it,  and  incom- 
patible with  it."  But  it  was  held  in  that  case,  that  a  clause  providing  for  the  paym^t 
of  freight,  "within  ten  days  after  her"  (the  schooner's)  "  return  to  Boston,  or,  in  case 
of  loss,  to  the  time  she  was  last  heard  of,"  was  not  a  waiver,  because  the  law  allows 
fifteen  days  after  arrival,  for  entry  and  discharge  of  cargo.  So  in  the  case  of  Certain 
Logs  of  Mahogany,  2  Sumn.  .589,  a  clause  making  the  freight  "  payable  in  five  days  after 
her  return  to,  and  discharge  in  Boston,"  was  no  waiver  of  die  lien,  on  the  ground,  among 
others,  that  "discharge  "  did  not  necessarily  mean  delivery.  And  Stori/,  J.,  remarked, 
that  the  lien  was  "  favored  in  law,  and  ought  not  to  be  displaced  without  a  clear  and 
determined  abandonment  of  it."  In  Crawshay  v.  Homfray,  4  B.  &  Aid.  50,  Best,  J., 
said:  "  The  jirinciple  has  been  truly  stated,  that  unless  the  special  agreement  be  incon- 
sistent with  the  right  of  lien,  it  will  not  destroy  it."  See  also,  Pinney  v.  Wells,  10 
Conn.  104.  The  general  doctrine  that  a  special  contract,  inconsistent  with  the  right  to 
a  lien,  is  a  waiver  of  it,  is  supported,  also,  in  Chandler  v.  Belden,  18  Johns.  157  ;  Pick- 
man  V.  Woods,  6  Pick.  248;  Chase  v.  Wcstmore,  5  Maule  &  Sel.  180;  Tate  v.  JNIeek, 
8  Taunt.  280;  Horneastle  v.  Farran,  3  B.  &  Aid.  497. 

^  See  the  preceding  note. 

2.  Vlierboom  v.  Chapman,  1.3  M.  &  W.  2.38  ;  Halwerson  i;.  Cole,  1  Spears,  321 ;  Hur- 
tin  V.  Union  Ins.  Co.  1  Wash.  C.  C.  530 ;  The  Nathaniel  Hooper,  3  Sumn.  542.  But 
if,  on  account  of  the  perils  of  the  sea,  only  a  part  of  the  goods  have  been  brought  to  the 
port  of  destination,  it  seems  that  the  owner  is  entitled  to  a  proportional  jiart  of  the 
freight,  if  those  goods  are  accepted.  Luke  r.  Lyde,  2  Burr.  882;  Post  i\  Robertson, 
I  Johns.  24;  The  Nathaniel  Hooper,  3  Sumn.  542.  But  see  the  dissenting  opinion  of 
Livingston,  J.,  in  Post  v.  Kobertson.  But,  in  such  a  case,  notiiing  can  be  recovered 
under  the  special  agreement  to  carry  all  the  goods,  but  tlie  action  must  be  on  the  im- 
plied assumpsit.    Post  v.  Kobertson;  Bright  v.  Cowper,  1  Brownl.  21. 


en.  XVII.]  OF  THE    LAW    OF   SIIirPlNG.  349 

comes  under  the  obligation  of  carrying  them  to  their  destination, 
and  on  the  other,  at  the  same  time,  (or,  perhaps,  only  on  breaking 
ground  and  beginning  the  voyage,)  acquires  the  right  of  so  carry- 
ino-  them.  Therefore,  if  a  wreck  or  other  interruption  intervenes, 
the  ship-owner  has  the  right  of  transshipping  them,  and  sending 
them  forward  to  the  place  of  their  original  destination.  When 
they  arrive  there,  he  may  claim  the  whole  freight  originally 
agreed  on';  but  if  forwarded  in  the  original  ship,  he  can  claim 
no  more  ;  for  the  extra  cost  of  forwarding  the  goods  is  his  loss.^ 
He  not  only  may,  but  must  send  forward  the  goods,  at  his  own 
cost,  if  this  can  be  done  by  means  reasonably  within  his  reach.^ 
He  is  not,  however,  answerable  for  any  delay  thus  occurring,  or 
for  any  damage  from  this  delay.  The  shipper  himself,  by  his 
agent,  may  always  reclaim  all  his  goods,  at  any  intermediate  port 
or  place,  on  tendering  all  his  freight ;  because  the  master's  right  of 
sending  them  forward  is  merely  to  earn  his  fall  freight.  If,  there- 
fore, the  goods  are  damaged  and  need  care,  and  the  master  can 
send  them  forward  at  some  time  within  reasonable  limits,  and 
insists  upon  his  right  to  do  so,  the  shipper  can  obtain  possession 
of  his  goods  only  by  paying  full  freight.^     If,  however,  the  mas- 

1  In  Rosctto  I'.  Gurney,  11  C.  B.  176,  188,  7  Eng.  L.  &  Eq.  461,  Jei-vis,  C.  J.,  refer- 
ring to  a  case  where  the  cargo  was  detained  by  perils  of  the  sea  at  an  intermediate  port, 
said:  "If  the  voyage  is  completed  in  the  original  ship,  it  is  completed  upon  the  original 
contract,  and  no"  additional  freight  is  incurred.  If  the  master  transships,  because  the 
original  ship  is  irreparably  damaged,  without  considering  whether  he  is  bound  to  trans- 
ship, or  merely  at  liberty  to  do  so,  it  is  clear  that  he  transships  to  earn  his  full  freight ; 
and  so  the  delivery  takes  place  upon  the  original  contract.  It  may  happen  that  a  new 
bottom  can  only  be  obtained  at  a  freight,  higher  than  the  original  rate  of  freight.  It 
does  not  seem  to  have  been  settled,  whether,  in  that  case,  the  ship-owner  may  charge 
the  cargo  with  the  additional  freight.  By  the  French  law,  he  may  do  so,  and  as  a  con- 
sequence of  that  rule,  the  increased  freight  would  be  an  average  loss,  to  be  added  to  the 
other  items.  See  Shipton  v.  Thornton,  9  Ad.  &  Ell.  314."  It  was  then  held,  that 
the  increased  freight  should  be  an  item  in  the  average  loss,  thus  holding  the  shipper 
responsible  for  it.  The  same  rule  has  been  adopted  in  the  American  courts.  Mumford 
V.  The  Commercial  Ins.  Co.  5  Johns.  262 ;  Searle  v.  Scovell,  4  Johns.  Ch.  218  ;  Hugg 
V.  Augusta  Ins.  and  Banking  Co.  7  How.  595,  609 ;  3  Kent's  Com.  212.  But  see  Shultz 
V.  Ohio  Ins.  Co.  1  B.  Mon.  339. 

2  In  England  it  does  not  appear  to  be  settled  whether  the  master  is  bound  to  carry  on 
the  goods  in  such  a  case,  or  whether  he  is  merely  at  liberty  to  do  so.  Rosetto  v.  Guer- 
ney,  11  C.  B.  176,  188  ;  7  Eng.  L.  &  Eq.  461  ;  Sliipton  v.  Thornton,  9  Ad.  &  Ell.  314. 
But  in  this  country  it  is  held  to  be  the  duty  of  the  master  to  transship,  '-if  upon  the 
whole  it  should  seem  reasonable,  taking  into  view  the  nature  of  the  voyage,  and  the 
time,  expense,  and  risk  of  the  transportation  to  the  port  of  destination."  Bryant  v. 
Commonwealth  Ins.  Co.  6  Pick.  131  ;  Shieffelin  v.  The  New  York  Ins.  Co.  9  Johns. 
21;  Saltus  v.  Ocean  Ins.  Co.  12  Johns.  107;  Treadwell  v.  Union  Ins.  Co.  6  Cow. 
270.  See  also,  Hugg  v.  Augusta  Ins.  and  Banking  Co.  7  How.  595,  609,  per  Nelson,  J.: 
3  Kent's  Com.  213. 

3  The  rule  is  thus  stated  by  Lord  Mansfield,  in  Luke  v.  Lyde,  2  Burr.  882,  887 : 
"If  a  freighted  ship  becomes  accidentally  disabled  on  its  voyage,  (without  the  fault  of 
the  master,)  the  master  has  his  option  of  two  things  ;  either  to  refit  it,  (if  that  can  be 

30 


350  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XVII. 

ter  tender  the  goods  there,  to  the  shipper,  and  the  shipper  there 
receives  them,  this  is  held  to  sever  the  contract  by  agreement, 
and  now  what  is  called  a  freight  j9ro  rata  Uineris  is  due.  This  is 
quite  a  common  transaction;  Difficult  questions  sometimes  arise 
as  to  what  is  a  reception  of  the  goods.  The  rights  of  the  master 
and  of  the  shipper  are  antagonistic,  and  neither  must  be  pressed 
too  far.  The  master  must  not  pretend  to  hold  them  for  forward- 
ing, to  the  detriment  of  the  goods  or  their  value,  when  he  cannot 
forward  them,  but  merely  uses  his  right  to  coerce  a  payment  of 
full  freight.  And  the  shipper  must  not  refuse  to  receive  the 
goods,  when  the  master  can  do  no  more  with  them,  and  offers 
their  delivery  in  good  faith.  The  questions  of  this  kind,  so  far 
as  they  are  difficult,  are  generally  questions  of  fact.  Courts  tend 
to  this  result ;  where  the  goods  cannot  be  forwarded  by  the 
master  without  unreasonable  effort  or  cost,  or  where  they  need 
measures  for  their  preservation  which  he  cannot  take,  and  they 
come  into  possession  of  the  shipper,  and  their  original  value  has 
been  increased  by  the  transportation  to  that  place  —  the  ship- 
owner is  held  to  be  entitled  to  a  proportionate  share  of  the  freight. 
Still,  as  matter  of  law,  it  seems  to  be  settled,  that  if  the  master 
certainly  will  not,  or  certainly  cannot,  carry  or  send  the  goods 
forward,  the  shipper  is  entitled  to  them  without  any  payment  of 
freight.  So,  the  shipper  may  always  refuse  to  receive  them,  and 
then,  under  no  circumstances,  is  freight  7>>ro  rata  payable,  on  the 
general  ground  that  the  original  contract  is  at  end,  and  no  new  one 

done  within  convenient  time,)  or  to  hire  another  sliip  to  carry  the  goods  to  the  port  of 
delivery.  If  the  merchant  disagrees  to  this,  and  will  not  let  him  do  so,  the  master  will 
be  entitled  to  the  whole  freight  of  the  full  voyage.  And  so  it  was  determined  in  the 
House  of  Lords,  in  the  case  of  Lutwidge  and  How  v.  Gray  ct  al."  See  report  of  Lut- 
widge  V.  Gray,  in  Luke  v.  Lyde,  and  Clark  v.  The  Mass.  Ins.  Co.  2  Pick.  104  ;  Jordan 
V.  Warren  Ins.  Co.  1  Story,  342;  M'Gaw  v.  Ocean  Ins.  Co.  23  Pick.  405  ;  Griswold 
V.  N.  T.  Ins.  Co.  3  Johns.  321  ;  Bradhurst  v.  Columbian  Ins.  Co.  9  Johns.  17.  What 
will  be  a  reasonable  time  to  allow  the  master  for  repairs  must  depend  upon  the  circum- 
stances of  each  case.  In  Clark  v.  The  Mass.  Ins.  Co.,  two  months  was  allowed,  where 
the  vessel,  on  a  voyage  from  Richmond  to  Nice,  with  a  cargo  of  tobacco,  was  driven 
into  Kennebunk,  in  Maine.  See  remarks  of  Putnam,  J.,  on  this  question  in  that  case. 
In  the  case  of  The  Nathaniel  Hooper,  3  Sumn.  542,  555,  Story,  J.,  said:  "And  I 
think  the  whole  of  the  cases,  in  which  the  full  freight  is,  upon  tlie  ordinary  principles  of 
the  commercial  law;  due,  notwithstanding  the  non-arrival  of  the  goods  at  the  port  of 
destination,  may  be  reduced  to  the  single  statement  that  the  non-arrival  has  been  occa- 
sioned by  no  default  or  inability  of  the  carrier-ship,  but  has  been  occasioned  by  the 
default  or  waiver  of  the  merchant  shipper."  The  cases  of  The  Racehorse,  3  Rob. 
101  ;  The  Martha,  3  Rob.  106  note;  The  Hoft'mung,  6  Rob.  231  ;  were  held  to  be 
of  doubtful  authority,  unless  supported  upon  the  ground  that  they  were  prize  cases, 
and  for  that  reason  came  under  "a  very  peculiar  and  extensive  jurisdiction,  sui  r/eneris, 
and  a  sort  of  international  discretion,"  which  do  not  belong  to  Courts  of  Admiralty  as 
instance  courts.  See  also,  Bork  v.  Norton,  2  McLean,  422.  See  also,  a  very  instruc- 
tive case  on  this  subject,  Jordan  v.  Warren  Ins.  Co.  1  Story,  342. 


en.  XVII.]  '  OF   TOE   LAW   OF   SHIPPING.  351 

has  been  substituted,  either  expressly  or  tacitly,  or  by  implication 
of  law.i 

If  freight  pro  rata  is  payable,  the  question  arises  by  what  rule 
of  proportion  shall  it  be  measured.  One  is  purely  geographical, 
aijd  was  formerly  much  used  ;  that  is,  the  whole  freight  would 
pay  for  so   many  miles,  and   the  freight  pro  rata  must  pay  so 

1  In  the  earlier  cases  it  seems  to  have  been  supposed  that  tlic  master  was  entitled  to 
prorata  frcij,'ht.  if  the  goods  were  not  abandoned  by  the  owner,  althoug-h  the  master 
should  find  it  impossible  to  carry  the  poods  to  the  port  of  destination,  or  decline  to  do 
so.  In  Luke  v.  Lyde,  2  Burr.  882,  885,  Lord  Munsjidd  said,  that  in  the  case  of  Lut- 
widge  V.  Gray,  the'  House  of  Lords  held,  tliat  the  master  was  entitled  to  only  pro  rata 
freight  on  goods  which  he  declined  to  carry  to  the  port  of  destination.  And  Lord 
Manxjidd  declared  that  the  decision  was  all  agreeable  to  the  maritime  law.  In  United 
Ins.  Co  V.  Lenox,  1  Johns.  Cas.  377,  383,  Benson,  J.,  after  alluding  to  Luke  ?;.  Lynde, 
said :  "  From  this  doctrine,  considered  as  premises,  I  deduce  these  consequences,  that, 
although  the  slii])  cannot  carry  the  goods,  and  although  the  maste.r  cannot  find  another 
to  carry  tlicm,  vet  that  he  may,  nevertheless,  retain  them  until  he  is  paid  tlie  freight." 
See  also,  Williams  v.  Smith,  2  Caines,  13  ;  Robinson  v.  Mar.  Ins.  Co.  2  Johns.  323, 
where  the  same  doctrine  seems  to  have  been  supported.  But  the  doctrine  stated  in 
the  text,  that  an  involuntary  acceptance  will  not  be  sufficient  to  sustain  a  promise  to 
pay  pro  rata  freiglit ;  and  hence,  that  the  master  cannot,  by  holding  goods  which  he 
cannot  carry  forward,  compel  the  owner  of  them  to  incur  liability  to  pay  freight  or  lose 
his  goods,  seems  to  be  now  well  settled.  Marine  Ins.  Co.  r.  United  Ins.  Co.  9  Johns. 
186;  Welch  r.  Hicks,  6  Cow.  504;  Armroyd  v.  The  Union  Ins.  Co.  3  Binn.  437; 
Portland  Bank  v.  Stubbs,  6  Mass.  422,  427 ;  Caze  v.  Baltimore  Ins.  Co.  7  Cranch,  358  ; 
The  Ship  Nathaniel  Hooper,  3  Surnn.  542  ;  Escopiniche  v.  Stewart,  2  Conn.  262;  Par- 
sons V.  Hardv,  14  Wend.  215  ;  Hurtin  v.  Union  Ins.  Co.  1  Wash.  C.  C.  530  ;  Harris  v. 
Rand,  4  N.  il.  261  ;  Griggs  v.  Austin,  3  Pick.  20;  Hunt  v.  Haskell,  24  Maine,  339  ; 
Bowman  v.  Teall,  23  Wend.  306;  Rossiter  v.  Chester,  1  Douglass,  (Mich.)  154.  In  the 
case  of  The  Sliip  Nathaniel  Hooper,  3  Sumn.  542,  Mr.  Justice  Story  considered,  very 
elaborately,  tlie  various  questions  whicli  arise  as  to  the  freight,  when  a  vessel  is  driven 
by  perils  of  the  sea  into  an  intermediate  port.  In  that  case,  a  cargo  of  sugar  was  on  its 
way  from  Havana  to  St.  Petersburg,  to  stop  at  Boston.  The  vessel  struck  on  the 
South  Shoal,  and  1,000  boxes  of  sugar  were  thrown  overboard,  and  then  she  was  de- 
serted. She  afterwards  floated,  went  adrift  to  sea,  and  was  taken  into  Boston  by  the 
crew  of  another  vessel.  Both  ship  and  cargo  were  libelled  for  salvage.  A  part  of  the 
sugars  were  found  to  be  in  a  perishable  condition,  and  were  sold  under  an  order  of 
court.  One  third  of  the  cargo  was  abandoned  to  the  underwriters  and  accepted  by 
them.  In  twenty  days  after  the  arrival  in  Boston,  the  vessel  was  repaired,  and  oft'ered 
to  proceed  with  the  cargo.  But  it  was  then  in  the  hands  of  the  court,  and  there  was 
no  one  to  release  it,  and  the  ship  was  sold  before  it  was  actually  released.  It  was  held, 
that  in  the  adjustment  of  general  average,  the  owners  of  tlie  ship  were  to  be  allowed 
fuli  freight  on  the  goods  jettisoned,  and  that  no  freight  was  due  on  those  sold  as  in  a 
perishing  condition,  on  the  ground  that  as  to  them  tlie  entire  voyage  neither  was  or 
could  have  been  performed,  but  it  was  defeated  by  an  overwhelming  calamity.  A  part 
was  sold  to  pay  the  duties  and  salvage ;  it  was  held  that  those  were  to  be  treated  as 
if  they  had  been  lost  on  the  voyage,  and  that  no  freight  was  due  on  them.  As  to  the 
remainder,  it  was  held,  that  under  all  the  circumstances,  the  owners  of  the  cargo  had 
waived  the  express  contract,  and  hence  were  bound  to  pay  pro  rata  freight.  No  gener- 
al rule  can  be  laid  down  as  to  what  acts  would  be  sufficient  to  show  a  waiver  of  the 
contract  to  complete  the  voyage,  and  thus  to  raise  a  promise  to  pay  pro  r^ta  freight. 
Mr.  Justice  Storti,  in  his  edition  of  Abbott  on  Shipping,  (5  ed.)  p.  549,  said:  "  If  the 
owner,  or  his  agent,  should  refuse  to  pay  any  freight  at  the  time  of  receiving  them,  or 
should  receive  them  with  a  protest  against  freight,  or  with  a  denial  of  any  right  to 
claim  it,  or  if  his  agents  should  merely  act  in  the  absence  of  the  owner,  for  the  benefit 
of  all  concerned,  there  could  arise  no  implication  of  any  contract  to  pay  freight,  result- 
ing from  the  mere  acceptance  of  the  goods  or  their  proceeds."  The  acceptance  of  the 
proceeds  of  goods  sold  by  necessity  in  an  intermediate  port,  is  not  sufficient  to  raise  a 
promise  to  pay  pro  rata  freight."     Escopiniche  v.  Stewart,  2  Conn.  391. 


352  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

many  less.  Another  is  purely  commercial.  The  whole  freight 
being  a  certain  sum  for  the  whole  distance,  what  will  it  cost  to 
bring  the  goods  to  the  place  where  they  are  received,  and  how 
much  to  take  them  thence  to  their  original  destination.  Let  the 
original  freight  be  divided  into  two  parts  proportional  to  these, 
and  the  first  part  is  the  freight ^ro  rata.  Neither  of  these,  nor 
indeed  any  other  fixed  and  precise  rale  is  generally  adopted  in 
this  country.  But  both  courts  and  merchants  seek  by  combining 
the  two,  to  ascertain  what  proportion  of  the  increase  of  value  by 
the  intended  transportation,  has  been  actually  conferred  upon  the 
goods  by  actual  partial  transportation,  and  this  is  to  be  taken  as 
the  freight  that  is  due  pro  rata  itineris?- 

If  the  bill  of  lading  requires  delivery  to  the  consignee  or  his 
assigns,  "  he  or  they  paying  freight,"  which  is  usual,  —  and  the 
master  delivers  the  goods  without  receiving  freight  which  the 
consignee  fails  to  pay,  the  master  or  owner  cannot  in  the  absence 
of  express  contract  fall  back  on  the  consignor  and  make  him 
liable,  unless  he  can  show  that  the  consignor  actually  owned  the 
goods  ;  in  which  case  the  bill  of  lading,  in  this  respect,  is  nothing 
more  than  an  order  by  a  principal  upon  an  agent  to  pay  money 
due  from  the  principal.^ 

1  In  Luke  v.  Lycle,  2  Burr.  882-888,  the  vessel  had  been  at  sea  17  days  when  she 
was  captured,  and  was  within  4  days  of  her  port  of  destination.  Held,  that  the  ovt'ner 
was  entitled  to  li  of  the  wliole  freight — although  the  freight  from  the  place  where  the 
goods  were  received,  Biddeford,  on  the  coast  of  England,  to  Lisbon,  was  higher  than  for 
the  whole  original  voyage  from  Newfoundland  to  Lisbon.  The  same  rule  was  adopted 
in  Robmson  v.  Marine  Ins.  Co.  2  Johns,  323,  but  Kent,  J.,  said:  "  In  the  case  of  the 
Marine  Ins.  Co.  v.  Leno.x,  decided  in  the  court  for  The  Correction  of  Errors,  in  1801, 
the  rule  adopted  was  to  ascertain  how  much  of  the  voyage  had  been  performed,  not 
when  the  ship  first  encountered  the  peril,  and  was  interrupted  in  her  course,  but  when 
the  goods  had  arrived  at  the  intermediate  port,  because  that  is  the  extent  of  the  voyage 
performed,  as  it  respects  the  interest  of  the  shipper.  .  .  The  rule  appears  to  be 
more  just  than  that  in  Luke  v.  Lynde,  but  we  cannot  adopt  it  in  the  present  case, 
because  we  have  no  data  given  by  which  we  might  ascertain  the  difference  of  the 
voyage,  as  it  respected  the  port  of  destination,  between  Kingston  (where  the  goods  were 
received,)  and  the  place  where  tiie  vessel  was  forced  out  of  her  course."  In  Coffin  v. 
Storer,  5  Mass.  252,  the  vessel  was  chartered  by  the  month,  the  ship-owner  was 
allowed  what  would  have  been  due  for  the  entire  voyage,  at  the  average  time,  deducting 
the  expense  of  transporting  the  goods  from  the  place  where  they  were  wrecked  to  the 
port  of  destination.  Tiie  court  remarked  that  the  rule  in  Luke  v.  Lynde,  was  mani- 
festly unjust. 

■^  In  Barker  v.  Havens,  17  Johns.  234,  Spencer,  C.  J.,  said:  "The  effect  of  this 
clause  has  been  repeatedly  considered  in  the  English  courts  and  the  decisions  have 
been  uniform  in  both  the  King's  Bench  and  Common  Pleas.  In  Shepherd  v.  De  Ber- 
nals,  (13  East,  565,)  Lord  EUenborough  examined  all  the  cases,  and  he  considered  the 
clause  introduced  for  the  benefit  of  the  carrier  of  the  goods  only,  and  merely  to  give 
him  the  option,  if  he  thought  fit,  to  insist  upon  his  receiving  freight  abroad,  f)efore  he 
should  make  delivery  of  the  goods ;  and  that  he  had  a  right  to  waive  the  benefit  of 
that  provision  in  his  favor,  and  to  deliver,  without  first  receiving  payment,  and  was  not 


I 


CH.  XVII.]  OF   THE   LAW    OF   SHIPPING.     .  353 

Generally,  the  one  who  receives  the  goods  under  the  common 
bill  of  lading  is  liable  for  the  freight;^  but  not  if  he  be  merely 
an  indorsee  or  assignee  of  the  consignee,  and  obtain  them  by  his 
order,  and  not  under  the  bill  of  lading,  unless  such  indorsee,  by 
express  or  implied  promise,  agrees  to  pay  the  freight.^  If  the 
master  delivers  goods  to  any  one,  saying  that  he  should  look  to 
him  for  the  freight,  he  may  demand  the  freight  of  him  unless 
that  person  had  the  absolute  right  to  the  goods  without  payment 
of  freight;  which  must  be  very  seldom  the  case. ^ 

If  freight  be  paid  in  advance,  and  not  subsequently  earned,  it 
must  be  repaid,  unless  it  can  be  shown  that  the  owner  took  a  less 
sum  than   he  would  otherwise   have  had,  and  for. this  or  some 


precluded,  by  such  delivery,  from  afterwards  maintaining  an  action  against  the  consignor. 
He  observes,  that  the  cases  he  cited,  proved  that  such  a  clause  did  not,  in  general,  cast 
the  duty  on  the  captain,  at  his  peril,  of  obtaining  freight  from  the  consignee;  but  that 
if  he  coukl  not  get  it  from  him,  he  may  insist  on  having  it  from  the  consignor.  He 
admits  that  the  rule  might  be  otherwise  in  a  case  differently  circumstanced;  and  he 
lays  stress  on  the  fact,  that  the  delivery  was  to  be  to  the  correspondents,  factors,  and 
agents  of  tlie  defendant.  I  should  clearly  be  of  opinion,  that  if  it  appeared  that  the 
goods  were  not  owned  by  the  consignor,  and  were  not  shipped  on  his  account,  and  for 
his  benefit,  that  the  carrier  would  not  be  entitled  to  call  on  the  consignor  for  freight ; 
and  I  should  incline  to  the  opinion  that,  in  all  cases,  the  captain  ought  to  endeavor  to 
get  the  freight  of  the  consignee."  See  also,  Domett  v.  Beckford,  5  B.  &  Ad.  521 ;  Tapley 
V.  Martens,  8  Term,  451  ;" Christy  v.  Row,  1  Taunt.  300;  Marsh  v.  Predder,  4  Camp. 
257;  Collins  r.  Union  Transp.  Co.  10  Watts,  384 ;  Spencer  v.  White,  1  Ired.  236; 
Hay  ward  v.  Middleton,  3  MeCord,  121 ;  Layng  v.  Stewart,  1  Watts  &  Serg.  222  ;  Grant 
V.  Wood,  1  N.  Jer.  292.  But  if  the  consignor,  although  not  the  owner  of  the -goods, 
has  e.Kpressly  agreed  by  charter-party  to  pay  the  freight,  it  would  seem  from  the  princi- 
ples laid  down  in  Shepard  v.  l)c  Bcrnales,  and  in  Uomett  v.  Beckford,  that  he  would 
be  liable  for  it,  if  the  master  had  delivered  the  goods,  without  receiving  the  freight.  In 
the  latter  case,  Parker,  J.,  said  the  clause  gave  the  master  "  the  option  of  insisting  on 
receiving  the  freight  before  he  should  make  delivery  of  the  goods." 

^  Under  the  usual  bill  of  lading,  the  goods  are  to  be  delivered  to  the  consignee  or 
his  assigns,  on  the  payment  of  freight.  If  goods  are  accepted  under  this  bill  of  lading, 
the  i^arty  receiving  them,  whether  the  consignee,  or  his  assignee,  becomes  liable  for  the 
freight.  Cock  u.^Taylor,  13  East,  399  ;  Dougal  v.  Kemble,  3  Bing.  383  ;  Eoberts  v. 
Holt,  2  Show.  443  ;  Moorsom  v.  Kymer,  2  M.  &  S.  303  ;  Merian  v.  Funck,  4  Denio,  1 10 ; 
Trask  v.  Duvall,  4  Wash.  C.  C.  "l.84.  In  Sanders  v.  Vanzeller,  4  Q.  B.  260,  it  was 
held,  in  the  Exchequer  Chamber,  that  the  law  would  not  imply  a  contract  to  pay 
freight,  from  the  acceptance  of  goods,  under  a  bill  of  lading  with  the  usual  clause,  but 
that  a  jury  might  infc-r  from  such  acceptance,  a  promise  to  pay  it.  If  the  bill  of  lading 
does  not  make  the  delivery  conditional  upon  the  payment  of  freight,  then  the  consignor, 
unless  he  is  the  owner,  does  not  incur  any  liability  for  the  freight;  but  a  contract  may 
be  inferred  from  usage.  Coleman  v.  Lambert,  5  ]\I.  &  W.  502  ;  Wilson  v.  Kymer,  I 
M.  &  Sel.  157.  The  indorsement  of  the  bill  of  lading  by  the  consignee,  docs  not 
make  him  liable  for  freight.  Merian  v.  Funck,  4  Denio,  110;  Tobin  v.  Crawford, 
5  M.  &  W.  235.  If  goods  are  received  by  one  as  agent  of  the  consignor  he  does 
not  thereby  become  personally  liable  to  pay  the  freight.  Amos  v.  Temperley, 
8  M.  &  W.  793  ;  Ward  v.  Felton,  1  East,  507.  As  to  liability  of  consignee  to  pay 
demurrage,  see  Smith  v.  Sieveking,  30  E.  L.  &.  E.  382. 

^  Wilson  V.  Kymer,  1  M.  &  S.  157.     See  preceding  note. 

3  Scaife  v.  Tobin,  3  Barn.  &  Adol.  523. 

30* 


354  ELEMENTS    OF   MERCANTILE   LAW.        '  [CH.  XVII. 

other  equivalent  Teasou  the  money  paid  was  in  final  settlement 
and  was  to  be  retained  by  the  owner  at  all  events.' 

If  a  consignee  pay  more  than  he  should,  he  may  recover  it 
back,  if  paid  through  ignorance  or  mistake  of  fact;  but  not 
if  with  full  knowledge  of  all  the  facts,  he  was  ignorant  or  mis- 
taken as  to  the  law. 

If  one  sells  his  ship  after  a  voyage  is  commenced,  he  only  can 
claim  the  freight  of  the  shipper,  although  the  contract  of  sale 
may  require  him  to  pay  it  over  to  the  purchaser.^  A  mortgagee 
of  a  ship  who  has  not  taken  possession,  has  not,  in  general,  any 
right  to  the  freight,  unless  this  is  specially  agreed.  Neither  has  a 
lender  on  a  bottomry  bond.^  But  it  seems  that  a  mortgagee  is 
entitled  to  the  freight  accruing  after  he  takes  possession,  although 
the  outfits  for  the  voyage  were  furnished  by  the  mortgagor.^ 

No  freight,  of  course,  can  be  earned  by  an  illegal  voyage ;  as 
the  law  will  not  enforce  any  illegal  contract,  or  sanction  any 
illegal  conduct.^ 

The  goods  are  to  be  delivered,  by  the  bill  of  lading,  in  good 
condition,  excepting  "  the  dangers  of  the  seas,"  and  such  other 
risks  or  perils  as  may  be  expressed.  If  the  goods  arc  damaged, 
to  any  extent,  by  any  of  these  perils,  and  yet  can  be,  and  are 
delivered  in  specie,  the  freight  is  payable. 

The  shipper  or  consignee  cannot  abandon  the  goods  for  the 
freight,  although  they  may  be  worthless ;  for  damage  caused  by 
an  excepted  risk  is  his  loss,  and  not  the  loss  of  the  owner.^     But 

1  Griggs  V.  Austin,  3  Pick.  20  ;  Watson  v.  Du)'kinck,  3  Johns.  335 ;  Phelps  v.  Wil- 
liamson, 5  Sandf.  578 ;  Pitman  v.  Hooper,  3  Sumner,  50,  66  ;  Gillan  v.  Simpldn, 
4  Camp.  241.  In  Watson  v.  Duykinck,  Kent,  C  J.,  after  a  careful  examination  of  the 
question,  said  :  "  The  general  principle  undoubtedly  is,  that  freight  is  a  compensation 
for  the  carriage  of  goods,  and  if  paid  in  advance,  and  the  goods  be  not  carried,  by 
reason  of  any  event  not  imputable  to  the  shipper,  it  then  forms  the  ordinary  case  of 
money  paid  upon  a  consideration  vv'hich  happens  to  fail."  But  the  agreement  in  that 
case  was  to  sutler  the  plaintiff"  to  proceed  and  go  in  the  defendant's  vessel,  as  a  passen- 
ger, from  New  York  to  St.  Thomas,  and  to  load  on  board,  for  transportation,  goods  to 
the  value  of  $600,  and  it  was  held  to  be  rather  an  agreement  "  for  the  loading  of  the 
article  on  board,"  than  for  freight  in  the  strict  sense  of  the  word,  and  that  the  money 
paid  in  advance  could  not  be  recovered  back  although  the  vessel  was  lost. 

'^  Pelayo  v.  Fox,  9  Barr,  489. 

^  See  ante,  p.  339,  notes  1  and  2. 

*  Kerswill  v.  Bishop,  2  Cr.  &  J.  529. 

^  MuUer  v.  Gernon,  3  Taunt.  394. 

6  Griswold  v.  N.  Y.  Ins.  Co.  3  Johns.  321 ;  S.  C  1  Johns.  205 ;  M'Gaw  v.  Ocean 
Ins.  Co.  23  Pick.  205,210;  Whitney  i'.  N.  Y.  Firemen  Ins.  Co.  18  Johns.  208.  In 
Griswold  v.'N.Y.  Ins.  Co.,  Kent,  C.  J.,  said:  "The  contract  of  aftVcightment,  like 
other  contracts  of  letting  to  hire,  binds  the  shipper  personally,  and  the  lien  which  the 
ship-owner  has  on  the  goods  conveyed,  is  only  an  additional  security  for  the  freight. 
The  lien  is  not  incompatible  with  the  personal  responsibility  of  the  shipper,  and  does 
not  extinguish  it.     The   consideration   of   the  freight  is  the  carriage  of  the  article 


CH.  XVII.]  OF   THE   LAW   OP   SHIPPING.  3o5 

if  they  are  lost,  in  substance,  though  not  in  form  ;  as  if  sugar  is 
waslied  out  of  boxes  or  hogsheads,  or  wine  leaks  out  of  casks, 
by  reason  of  injury  sustained  from  a  peril  of  the  sea,  though  the 
master  may  deliver  the  hogsheads  or  boxes  or  casks,  this  is  not  a 
delivery  of  the  sugar  orof  the  wine,  and  no  freight  is  due.^  If  the 
goods  arc  injured,  or  if  they  actually  perish  and  disappear,  from 
internal  defect  or  decay  or  change,  that  is,  from  causes  inherent 
in  the  goods  themselves,  freight  is  due.^     If  they  are  lost  from  the 

shipped  on  boanl.  ami  the  state  or  condition  of  the  article,  at  the  end  of  tlio  voyage,  has 
nothing  to  do  with  the  obHgation  of  the  contract.  It  requires  a  special  agreement  to 
limit  tlic  remedy  of  the  carrier  for  his  hire  to  the  goods  conveyed.  It  cannot  be 
deduced  from  the  nature  of  the  undertaking.  The  ship-owner  performs  his  engage- 
ment when  he  carries  and  delivers  the  goods.  The  condition  wliich  was  to  precede 
payment,  is  then  fulfilled.  The  right  to  payment  then  becomes  absolute,  and  whether 
we  consider  the  spirit  of  this  particular  contract,  or  compare  it  with  the  common  law 
doctrine  of  carrying  for  hire,  we  cannot  discover  any  principle  which  makes  the  carrier 
an  insurer  of  the  goods  as  to  their  soundness,  any  more  than  he  is  of  the  price  in  the 
market  to  which  they  are  carried.  If  he  has  conducted  himself  with  fidelity  and  vigi- 
lance in  the  course  of  the  voyage,  he  has  no  concern  with  the  diminution  of  their 
value.  It  may  impair  the  remedy  which  his  lien  afi^'orded,  but  it  cannot  aftect  his  per- 
sonal demand  against  the  shipper." 

1  In  Frith  i;. "Barker,  2  Johns.  327,  one  hundred  and  ninety  hogsheads  of  sugar  were 
shipped  from  Surinam  to  New  York.  Owing  to  the  perils  of  the  sea,  the  ship  leaked, 
and  fifty  hogsheads  of  the  sugar  were  washed  out  so  that  the  casks  were  empty  on 
arrival.  The  owner  of  the  cargo  refused  to  pay  freight  on  the  empty  hogsheads.  It 
was  held,  that  he  was  not  liable.  Kent,  C  J.,  said  :  "  The  sugar  was,  in  this  case,  as 
efTcctuully  destroyed,  as  if  it  had  been  at  once  swept  into  the  sea  and  had  .gone  to  the 
bottom.  Bringing  into  port  the  empty  hogsheads,  was  not  bringing  the  hogsheads  of 
sugar  which  the  defendant  had  undertaken  to  do.  A  hogshead  of  merchandise  is 
considered  by  Pothier,  (Charte-Partie,  No.  60,)  as  having  perished,  if  the  cask  arrives 
empty,  because  the  goods  no  longer  exist ;  and,  consequently,  the  master  cannot  be 
said  to  have  carried  them  to  their  place  of  destination.  And  however  the  authorities 
may  differ,  on  the  assumed  right  to  abandon  damaged  goods  in  discharge  of  freight,  yet 
they  all  agree  that  you  may  abandon  casks,  leaked  out  by  the  perils  of  the  sea,  as  the 
subject-matter  of  the  contract  no  longer  exists.  (Le  Guidon,  c.  7,  §  11  ;  Ord.  du  Fret. 
Art.  26,  valin,  672,  and  Pothier's  Charte-Partie,  60.)  I  wish  to  be  understood,  as  con- 
fining this  opinion  strictly  to  the  facts  in  the  case,  which  establish  that  the  sugar  was 
entirely  gone,  by  the  perils  of  the  sea,  before  the  arrival  of  the  vessel  in  port.  It  will 
not,  therefore,  apply  to  the  case  of  an  article  that  is  lost  by  other  causes  than  the  perils 
of  the  sea,  such  as  internal  decay,  leakage,  evaporation,  and  the  like." 

2  See  preceding  note.  In  Clark  v.  Barnwell,  12  How.  272,  a  libel  was  brought  against 
a  vessel  by  the  owners  of  twenty-four  boxes  of  cotton  thread  for  damage  done  to  it  on 
board  the  vessel  on  a  voyage  from  Liverpool  to  Charleston.  Nelson,  J.,  in  delivering  the 
opinion  of  the  oourt,  said :  "  Now  the  evidence  shows  very  satisfactorily  that  the  damage  to 
the  goods  was  occasioned  by  the  effect  of  the  humidity  and  dampness,  which  in  the  absence 
of  any  defect  in  the  ship,  or  navigation  of  the  same,  or  in  the  storage,  is  one  of  the  dan- 
gers and  accidents  of  the  seas,  for  which  the  carrier  is  not  liable.  The  burden  lay  upon  the 
libellants  to  show  that  it  might,  notwithstanding,  have  been  prevented  by  reasonable 
skill  and  dilligence  of  those  employed  in  the  conveyance  of  the  goods.  For,  it  has 
been  held,  if  the  damage  has  proceeded  from  an  intrinsic  principle  of  decay,  naturally 
inherent  in  the  commodity  itself,  whether  active  in  every  situation,  or  only  in  the  con- 
finem.ent  and  closeness  of  the  ship,  the  merchant  must  bear  the  loss  as  well  as  pay  the 
freight;  as  the  master  and  owners  are  in  no  fault,  nor  does  their  contract  contain  any 
insurance  or  warranty  against  such  an  event.  12  East,  381  ;  4  Camp.  119  ;  6  Taunt. 
65  ;  Abbott  on  Ship.  428,  (Shee's  ed.)  But  if  it  can  be  shown  that  it  might  have  been 
avoided  by  the  use  of  proper  precautionary  measures,  and  that  the  usual  and  custom- 
ary methods  for  this  purpose  have  been  ncg"lccted,  they  may  still  be  held  liable."  See 
also  Rich  V.  Lambert,  12  How.  347. 


356  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XVIT. 

fault  of  the  owner,  the  master,  or  crew,  the  owner  must  make  the 
loss  good,  but  in  this  case  may  have  by  way  of  offset  or  deduc- 
tion, his  freight,  because  the  shipper  is  entitled  to  full  indemnifi- 
cation, but  not  to  make  a  profit  out  of  this  loss.'  If  goods  are 
delivered,  although  damaged  and  deteriorated  from  faults  for 
which  the  o-wner  is  responsible,  as  bad  storage,  deviation,  negli- 
gent navigation  or  the  like,  freight  is  due  ;  the  amount  of  the 
damage  being  first  deducted.^ 

The  rules  in  respect  to  passage-money  are  quite  analogous  to 
those  which  regulate  the  payment  of  freight.^  Usually,  however, 
the  passage-money  is  paid  in  advance.  But  it  is  not  earned  ex- 
cept by  carrying  the  passenger,  or,  pro  rata,  by  carrying  him  a 
part  of  the  way  with  his  consent.  And  if  paid  in  advance  and 
not  earned  by  the  fault  of  the  ship  or  owner,  it  can  be  recovered 
back.* 

1  Watkinson  v.  Laughton,  8  Johns.  213;  Amory  v.  M'Gregor,  15  Johns.  24.  In 
Watkinson  v.  Laughton,  the  goods  were  embezzled,  but  without  fraud  on  the  part  of 
the  master,  against  whom  the  action  was  brought.  i/eW,  tliat  the  measure  of  damages 
was  the  net  value  of  the  goods  at  the  port  of  delivery,  deducting  freight  and  other 
charges. 

2  Davidson  v.  Gwynne,  12  East,  381  ;  Sheels  v.  Davies,  4  Camp.  119  ;  Edwards  v. 
Todd,  1  Scam.  462  ;  Leech  v.  Baldwin,  ,5  Watts,  446  ;  Glover  v.  Dufour,  6  Louis.  Ann. 
490;  The  Ninetta,  Crabbe,  534.  In  Davidson  v.  Gwynne,  the  action  was  for  freight  under 
a  charter-party,  which  entitled  the  ship-owner  to  freight  "  on  a  right  and  true  delivery 
of  the  whole  of  the  goods,  agreeably  to  bills  of  lading."  The  bills  of  lading  required 
them  to  be  delivered  in  good  order  and  well  conditioned.  The  cargo,  consisting  of 
chests  of  fruit,  was  much  injured  by  the  negligence  of  the  master  and  crew  in  not 
ventilating  sufficiently.  The  freight  was  recovered.  Lord  Ellenborough  ruled  :  "  That 
the  allegation  of  having  made  a  right  and  true  delivery  of  the  cargo,  was  satisfied  by 
the  delivery  made  of  the  number  of  chests  of  fruit  shipped  on  board  ;  and  that  if  the  con- 
tents of  any  of  them  turned  out  to  be  damaged  by  the  negligent  stowing,  or  subsequent 
want  of  care  and  proper  ventilation  by  the  master  and  crew,  the  defendant  had  a  cross- 
action  to  recover  damages  ;  but  that  it  was  no  answer  to  an  action  for  the  freight. 
.  .  .  That  the  issue  on  the  fact  of  a  right  and  true  delivery  of  the  goods  according  to 
the  bills  of  lading,  was  to  be  taken  in  a  narrow  and  restricted  sense,  such  as  in  his  own 
experience,  it  had  always  received,  as  meaning  a  right  and  true  delivery  of  the  entire 
number  of  chests  or  packages  shipped  on  board,  as  specified  in  the  bills  of  lading."  In 
England,  in  an  action  at  law  for  the  goods,  the  amount  of  damage  from  bad  stowing,  or 
the  like,  cannot  beset  off.  Sheels  v.  Davies,  4  Camp.  119.  In  Pennsylvania,  such  a 
set-off  was  allowed;  Leech  v.  Baldwin,  supra;  and  in  Illinois,  under  a  statute, 
Edwards  v.  Todd,  supra.  See  also.  Glover  v.  l^ufour,  6  Louis.  Ann.  490  ;  Humphreys  v. 
Keed,  G  Whart.  435 ;  Dickinson  v.  Haslet,  3  Har.  &  John.  345.  How  far  this  circuity 
of  action  will  be  sustained  in  this  country,  is  not  settled.  See  notes  to  Cutter  v.  Pow- 
ell, 2  Smith,  Lead.  Cas.  1. 

3  Watson  V.  Duykinck,  3  Johns.  335  ;  Mulloy  v.  Backer,  5  East,  316;  Rowland  v. 
Lavinia,  1  Pet.  Ad.  126;  Griggs  v.  Austin,  3  Pick.  20.  The  ship-owner  has  a  lien  on 
the  baggage  of  a  passenger  for  the  passage-money.  In  Wolf  v.  Summers,  2  Camp. 
631,  an  action  of  trover  was  brought  for  a  trunk  filled  with  wearing  apparel  and  a 
writing-desk.  The  defendant  retained  them  for  the  non-p.ayment  of  passage  money. 
Lawrence,  J.,  said :  "  The  master  of  a  ship  has  certainly  no  lien  on  the  passenger 
himself,  or  the  clothes  which  he  is  actually  wearing,  when  he  is  about  to  leave  the 
vessel ;  but  I  think  the  lien  does  extend  to  any  other  property  he  may  have  on  board." 

*  See  ante,  p.  354.  n.  1,  and  Moffat  v.  East  India  Co.  10  East,  468." 


CH.  XVir.]  OF  THE   LAW   OF   SIIimNG.  357 


SECTION    VII. 

OF    CnARTER-PARTIES. 

The  owner  may  let  his  ship  to  others  ;  and  the  written  instru- 
ment by  which  this  is  done,  is  called  by  an  ancient  name,  the  ori- 
gin of  which  is  not  quite  certain,  a  Charter- Party.  The  form  of 
tlris  instrument  varies  considerably,  because  it  must  express  the 
bargain  between  the  parties,  and  this  of  course  varies  with  circum- 
stances and  the  pleasure  of  the  parties.'  An  agreement  to  make 
and  receive  a  charter,  though  not  itself  equivalent  to  a  charter, 
will,  if  the  purposes  of  the  proposed  charter  are  carried  into 
effect,  be  considered  as  evidence  that  such  a  charter  was  made 
and  was  consummated.^ 

Generally,  only  the  burden  of  the  ship  is  let;  the  owner  hold- 
ing possession  of  her,  finding  and  paying  her  master  and  crew, 
and  supplies  and  repairs,  and  navigating  her  as  is  agreed  upon. 
Sometimes,  however,  the  owner  lets  his  ship  as  he  might  let  a 
house;  and  the  hirer  takes  possession,  mans,  navigates,  supplies, 
and  even  repairs  her. 

In  the  latter  case,  bills  of  lading  are  not  commonly  given  to 
the  hirer,  unless  the  hirer  takes  the  goods  of  other  shippers,  but  in 
that  case  bills  of  lading  are  given  by  him  to  them  ;  but  in  the 
former,  which  we  have  said  is  much  more  common,  bills  of  lad- 
ing are  usually  given  as  in  the  case  of  a  general  ship,  for  much 
the  same  purpose  and  with  much  the  same  effect. 

There  is  no  particular  form  for  a  charter-party,  but  in  all  our 
commercial  cities  blank  forms  are  sold  by  mercantile  stationers. 
They  should  designate  particularly  the  ship,  and  master,  and  the 
parties  ;  should  describe  the  ship  generally,  and  particularly  as  to 
her  tonnage  or  capacity  ;3  should  designate  especially  what  parts 

1  Taggard  w.  Loving,  16  Mass.  336;  Thompson  v.  Hamilton,  12  Pick.  428 ;  Mug- 
gridge  v.  Eveleth,  9  Mete.  233  ;  The  Phebe,  Ware,  263  ;  3  Kent's  Comm.  203-204 ; 
4  Hare,  4,56. 

^  The  Schooner  Tribune,  3  Sumner,  144. 

'•i  Molloy,  Lib.  2,  c.  4,  §  8;  Abbott  on  Ship.  p.  iv.  c.  1,  §  2;  Thomas  v.  Clarke, 2  Stark, 
450,  but  where  a  merchant  covenanted  to  load  a  full  and  complete  cargo  on  board  a 
ship  described  in  the  charter-party  as  of  the  burden  of  261  tons  or  tlicreabouts  ;  the 
burden  thus  expressed  was  considered  by  the  court  in  the  absence  of  fraud,  not  to  be 
conclusive  on  tlie  parties,  and  the  freighter  was  lield  answerable  on  the  covenant  for 
not  furnishing  a  full  cargo.  Although  it  was  found  that  400  tons  of  goods  of  the  kind 
actually  loaded,  were  requisite  to  constitute  such  a  cargo.  Hunter  v.  Fry,  2  B.  «&  Aid. 
421.     See  also,  DufHe  v.  Hayes,  1.5  Johns.  327  ;  Ashburner  v.  Balchen,  3  Seld.  (N.  Y.) 


358  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

of  the  ship  are  let,  and  what  parts,  if  any,  are  reserved  to  the 
owner,  or  to  the  master,  to  carry  goods,  or  for  the  purpose  of 
navigation  ;  should  describe  the  voyage,  or  the  period  of  time  for 
which  the  ship  is  hired,  with  proper  particularity  ;  should  set 
forth  the  lay  days,  demurrage,  the  obligation  upon  either  party  to 
man,  navigate,  supply,  and  repair  the  ship,  and  all  other  particu- 
lars of  the  bargain,  for  this  is  a  written  instrument  of  an  impor- 
tant character,  and  cannot  be  varied  by  any  external  evidence.^ 
Finally  it  should  state,  distinctly  and  precisely,  how  much  is  to 
be  paid  for  the  ship  —  whether  by  ton,  and  if  so,  whether  by  ton 
of  measurement  or  ton  of  capacity  of  carriage,  or  in  one  gross 
sum  for  the  whole  burden,  —  and  when  the  money  is  payable, 
and  how,  that  is  in  what  currency  or  at  what  exchange,  espec- 
ially if  it  be  payable  abroad.  The  charter-party  usually  binds 
the  ship  and  freight  to  the  performance  of  the  duties  of  the 
owner,  and  the  cargo  to  the  duties  of  the  shipper.  .  But  the  law- 
merchant  would,  generally  at  least,  create  this  mutuality  of  obli- 
gation if  it  were  not  expressed.^ 

If  the  hirer  takes  the  whole  vessel,  he  may  put  the  goods  of 
other  shippers  on  board,  (unless  prevented  by  express  stipula- 
tion),^ but  whether  he  fills  the  whole  ship  or  not,  he  pays  for  the 
whole  ;  *  and  what  he  pays  for  so  much  of  the  ship  as  is  empty, 
is  said  to  be  paid  for  dead  freight.^  This  is  calculated  on  the 
actual  capacity  of  the  ship,  unless  she  is  agreed  to  be  of  a  speci- 
fied tonnage.*^     If  either  party  is  deceived  or  defrauded  by  any 

262.  As  to  the  case  of  fraud  in  the  misrepresentations,  see  Johnson  v.  Miln,  14 
Wend.  195. 

1  As  to  the  general  principles  respecting  the  admission  of  parol  evidence  to  affect 
written  contracts,  see  2  Parsons  on  Cont.  59-79. 

2  See  ante,  p.  345,  n.  1. 

3  Hunter  v.  Fry,  2  Barn.  &  Aid.  421 ;  Michenson  v.  Begbie,  6  Bing.  190  ;  Abbott  on 
Ship.  246  ;  3  Kent's  Comm.  202. 

*  Thompson  v.  Inglis,  3  Camp.  428  :  Heckscher  v.  McCrea,  24  Wend.  304.  In  this 
last  case  it  was  held  to  be  the  duty  of  the  master,  where  the  charterer  failed  to  furnish 
a  full  cargo,  according  to  the  agreement,  and  goods  were  offered  by  third  parties  to 
make  up  the  deficiency  at  current,  although  reduced  rates,  to  take  them  and  credit  the 
charterer  with  the  amount  thus  earned. 

^  3  Kent's  Comm.  219.  Chancellor  Kent  considers  it  to  be  the  doctrine  of  Bell  v. 
Puller,  2  Taunt.  286,  that  the  equity  of  this  claim  for  dead  freight  would  extend  to  the 
case  of  the  master's  bringing  back  the  outward  cargo  where  it  could  not  be  disposed  of, 
although  the  charter-party  contained  no  provision  as  to  a  return  cargo. 

**  Supra,  p.  257,  n.  3.  But  if  the  agreement  be  only  to  pay  so  much  per  ton  for  all 
goods  laden  on  board,  and  the  charter-party  contains  no  stipulation  on  the  part  of  the 
shipper  to  furnish  a  full  cargo,  payment  can  only  be  claimed  by  the  ship-owner  for  the 
amount  actually  shipped.  3  Kent's  Comm.  21 9.  Where  payment  was  to  be  made  "  per 
cask  or  bale,"  the  shipper  was  held  to  pay  for  the  goods  brought,  although  the  master 
refused  to  remain  long  enough  to  take  in  a  full  cargo,  which  he  had  agreed  to  take. 
Eitchie  v.  Atkinson,  10  East,  295.      In  such  case,  he  is  not  liable  to  pay  dead  freight, 


en.  XVII.]  OF   THE    LAW   OF   SHIPPING.  359 

statement  in  the  charter-party,  he  has,  of  course,  his  remedy 
against  the  other  party.' 

The  question  has  arisen  under  charter-parties,  analogous  to 
that  under  bills  of  lading,  whether  the  lien  of  the  ship-owner  on 
the  cargo,  for  freight,  is  lost  by  want  of  possession.  Here,  how- 
ever, the  owner  seems  to  let  his  ship  out  of  his  hands,  and  not  to 
be  the  carrier  of  the  charterer.  Hence,  in  England,  there  have 
been  great  doubts  whether  the  technical  defect  of  possession  did 
not  destroy  this  lien.  Less  weight  is  now  given  to  this  agree- 
ment, than  formerly,  even  there.  In  this  country  it  seems  to  be 
settled  that  the  owner,  under  any  common  charter-party,  and 
especially  if  bills  of  lading  are  signed  by  his  master,  has  this  lien 
on  the  cargo  for  his  freight.  If  however  he  lets  his  whole  ship, 
giving  up  the  possession  entirely,  and  having  nothing  to  do  with 
the  officers  or  men  or  navigation,  and  of  course  not  being  a  party 
through  his  master  to  the  bills  of  lading,  it  would  seem  that 
there  can  be  no  sufficient  ground  for  a  lien.  His  contract  with 
the  hirer  is  purely  personal,  and  to  him  alone  he  looks  for  the 
payment  of  the  money  due.^ 

and  the  ship-owner  may  be  liable  to  him  in  damages  for  the  act  of  the  captain.  Dun- 
bar V.  Buck,  G  Mmifd.  34. 

'  In  an  action  upon  a  charter-party  to  recover  the  price  agreed  upon  for  the  use  of  the 
vessel,  the  defendant  may  give  evidence  of  fraudulent  representations  by  the  plaintiff 
as  to  the  burden  of  the  vessel,  in  mitigation  or  satisfaction  of  the  plaintiff's  claim. 
Johnson  v.  Miln,  14  Wend.  195. 

■^  The  question  of  the  ship-owner's  lien  on  the  goods  carried  for  his  freight,  irrespec- 
tive of  the  charter-party,  has  been  already  discussed.  See  arite,  p.  345,  and  notes.  The 
existence  of  this  instlniment  renders  it  necessary  to  decide  the  preliminary  question  of 
possession  under  it.  For  the  party  having  possession  of  the  vessel  we  have  already  seen 
is  usually  the  one  entitled  to  the  benefit  of  the  lien.  Prima  facie  this  is  the  general 
owner,  and  it  will  be  so  accounted  in  doubtful  cases.  Story,  J.,  in  the  case  of  Certain 
Logs  of  Mahogany,  2  Sumn.  589.  But  there  is  no  doubt  that  he  may  make  such  an 
agreement  with  the  charterer  tliat  the  possession  of  the  ship,  and  witli  it  tiic  lien,  will 
thereby  pass  to  the  latter.  "  The  defendant,  the  owner  of  the  ship,"  said  Cliicf  Justice 
Dallas,  in  Christie  v.  Lewis,  2  Brod.  &  Bing.  410,  contends  that  he  had  a  lien  on  the 
goods  on  board,  for  the  freight  due  or  the  money  received  for  such  freight.  To  have  a 
lien,  he  must  have  had  at  the  time  of  the  asserted  exercise  of  it,  the  possession  of  the 
ship.  He  had  the  possession  when  he  executed  the  charter-party,  —  and  the  question 
is  whether  by  the  charter-party,  he  has  parted  with  the  possession  for  the  particular 
voyage,  ^n  the  absence  of  express  provisions  on  this  point  in  the  charter-party  this 
question  of  possession  depends  upon  another,  namely,  who  is  the  owner  pro  tempore 
under  the  instrument  ;  for  upon  such  special  ownership  the  constructive  possession 
attends.  "  Tiie  owner  of  a  ship,  so  long  as  he  continues  in  i)ossession  of  the  ship,  is  in 
possession  also  of  the  goods  carried  by  her,  and  his  right  to  a  lien  on  them  for  the 
freight  due  in  respect  of  them  whether  by  charter-party,  or  under  a  bill  of  lading,  has 
never  been  questioned.  He  may,  if  he  think  proper,  part  with  tiiat  possession,  he  may 
demise  her  for  a  term,  surrender  all  control  over  the  ship  itself,  the  appointment  of  her 
master  and  mariners,  and  even  relieve  himself  from  responsibility  for  wages  and  re- 
pairs. If  he  do  so,  the  person  to  whom  he  lets  the  ship,  who  is  called  the  charterer, 
becomes  owner  pro  tempore,  the  rights  of  the  absolute  owner  are  suspended,  and  among 
them  his  right  of  lien  for  the  freight  of  goods  carried  by  his  ship."    Abbott  on  Ship. 


360  ELEMENTS    OF    MERCANTILE    LAW.  [CH.  XVII. 

If  a  charterer  takes  the  goods  of  other  shippers,  payment  by 
one  of  them  to  the  master  or  owner,  is  a  good  defence  against 
the  claim  of  the  charterer  against  him,  for  so  much  as  the  char- 
terer was  bound  to  pay  the  owner,  but  no  more.' 

p.  288,  289.  Whether  the  contract  is  to  be  considered  as  a  hiring  of  the  vessel  itself, 
or  merely  of  its  tonnage  or  carrying  capacity  a  locatio  rei,  or  locatio  operis  vehendarum 
merciuni  as  writers  on  commercial  law  sometimes  style  it,  is  one  of  construction  on  tlie 
contract.  Clarkson  v.  Edes,  4  Cowen,  470.  In  determining  this  point,  the  court  pay 
more  attention  to  the  intent  of  the  parties  as  manifested  by  the  substantial  provisions 
of  the  agreement  than  to  special  clauses  and  the  employment  of  technical  terms.  See 
Palmer  v.  Gracie,  4  Wash.  C  C  110,  and  8  Wheat.  605;  The  Schooner  Volunteer,  1 
Sumn.  568.  Certain  Logs  of  Mahogany,  supra.  In  the  first  of  these  cases  it  was  held 
by  the  court  upon  a  view  of  the  whole  contract,  that  the  special  ownership  did  not  pass 
to  the  charterer  altliough  the  words  employed  were  "  let  and  hired  "  and  tiie  freight 
was  a  gross  sum  to  be  paid  before  the  discharge  of  the  cargo.  So  in  the  case  of  The 
Schooner  Volunteer,  supra,  the  court  came  to  a  similar  decision,  although  the  general 
owner  declared  in  the  charter-party  that  he  had  "  letten  to  freight "  the  whole  vessel. 
This  of  course  does  not  extend  in  cases  arising  on  the  question  of  lien  to  the  introduc- 
tion into  the  charter-party  of  any  express  provision  upon  the  subject  of  possession  of 
the  goods  for  the  purpose  of  carriage  and  earning  the  freight  thereby,  which  must  from 
the  nature  of  the  case  be  decisive  as  to  the  claim  of  lien.  The  party  having  the  pos- 
session and  control  of  the  ship  under  the  charter-party,  is  the  one  entitled  to  the  lien, 
and  will  be  considered  the  owner  pro  tern,  for  this  purpose.  See  besides  the  cases  before 
cited.  Ruggles  v.  Bucknor,  1  Paine,  C.  C.  358  ;  The  Brig  Spartan,  Ware,  149  ;  The 
Phebe,  Ware,  265;  Marcardier  v.  Chesapeake  Ins.  Co.  8  Cranch,  49;  Lander  v.  Clark, 

1  Hall,  375 ;  Pickman  v.  Woods,  6  Pick.  248  ;  Brown  v.  Howard,  1  Cal.  423  ;  Button 
V.  Bragg,  7  Taunt.  640;  Faith  v.  E.  I.  Co.  4  B."  &  Aid.  640.  This  question  of  owner- 
ship pro  tern  under  tlie  charter-party  is  one  of  very  frequent  occurrence,  arising  as  it 
does,  wherever  the  claim  sought  to  be  enforced  against  one  of  the  parties  to  such  agree- 
ment depends  on  the  existence  of  such  special  ownership  in  the  defendant.  It  has  ac- 
cordingly been  elaborately  discussed  by  the  courts  of  England  and  America  in  a  variety 
of  cases  both  of  tort  and  contract.  See  Rich  v.  Coe,  Cowp.  636 ;  Fletcher  v.  Brad- 
dick,  5  Bos.  &  Pul.  182;  Parish  v.  Crawford,  Abbott  on  Ship.  42;  Frazer  v.  Marsh, 
13  East,  238  ;  Saville  v.  Campion,  2  B.  &  Aid.  503  ;  Laugher  v.  Pointer,  5  B.  &  Cres. 
578 ;  Lucas  v.  Nockells,  4  Bing.  729  ;  Colvin  v.  Newberry,  6  Bligh.  189  ;  Newberry  v. 
Colvin,  7  Bing.  190;  Reeve  v.  Davis,  1  Adol.  &  Ellis,  312;  Trinity  House  v.  Clarke,  4 
M.  &  Sel.  288;  Dean  v.  Hogg,  6  Car.  &  Payne,  54  ;  Belcher  v.  Capper,  4  Man.  &  Gra. 
502;  Martin  v.  Temperly,  7  Jurist.  150;  Hooe  v.  Groverman,  1  Cranch,  214  ;  Ship  Na- 
thaniel Hooper,  3  Sumn.  575;  Arthurs.  Schooner  Cassius,  2  Story,  92;  Skolefield  u. 
Potter,  Daveis,  392  ;  M'Intyre  v.  Bowne,  1  Johns.  229  ;  Hallet  v.  Col  Ins.  Co.  8  Johns. 
272;  Holmes  y.  Pavenstedt,  5  Sandfd.  97;  Reynolds  v.  Toppan,  15  Mass.  370;  Taggard 
V.  Loring,  16  Mass.  336;  Perry  v.  Osborne,  5  Pick.  422;  Cutler  v.  Windsor,  6  Pick.  335  ; 
Thompson  v.  Hamilton,  12  Pick.  425;  Manter  v.  Holmes,  10  Mete  402;  Thompson  v. 
Snow,  4  Greenlf.  264;  Emery  v.  Hersey,  id.  407  ;  Winsor  v.  Cutts,  7  id.  261;  Houston 
V.  Darling,  16  Maine,  413;  Cutler  v.  Thurlo,  20  id.  213  ;  Willi-ams  v.  Williams,  23  id. 
17  ;  Sproat  v.  Donnell,  26  id.  185  ;  Swanton  v.  Reed,  35  id.  176  ;  Webb  v.  Peirce,5  Law 
Rep.  U.  S.  9  ;  Pitkin  v.  Brainerd,  5  Conn.  451.  In  the  greater  part  of  the  above  cases  the 
courts  appear  to  have  recognized  the  existence  of  the  principles  before  stated,  although 
in  their  application  of  them  to  particular  circumstances  there  exists  considerable  dis- 
crepency.  It  was  indeed  doubted  by  Lord  Mansfield  in  the  early  case  of  Rich  v.  Coe, 
whether  any  agreement  between  the  general  owner  of  the  ship  and  the  charterer  could 
be  allowed  to  vary  their  respective  liability  towards  third  parties  having  no  notice  of 
such  agreement.  See  also,  Fletcher  v.  Braddick,  supra.  And  in  the  modern  American 
case  of  Skolefield  v.  Potter,  supra.  Justice  Ware  seemed  inclined  to  favor  the  doctrine 
of  Lord  Mansfield  although  admitting  that  it  appeared  to  be  overruled  to  a  certain  ex- 
tent by  subsequent  decisions.  But  see  the  language  of  Justice  Curtis  in  Webb  v. 
Pierce,  1 5  Law  Rep.  and  that  of  Abbott  before  cited. 

1  Paul  V.  Birch,  2  Atk.  621 ;    Mitchell  v.  Scaife,  4  Campb.  298;    Christie  v.  Lewis, 

2  Brod.  &  Bing.  410 ;  Faith  v.  East  India  Co.  4  B.  &  Aid.  630 ;  Small  v.  Moates,  9 
Bing.  574 ;  Holmes  v.  Pavenstedt,  5  Sandf.  97.    lu  the  first  of  these  cases,  the  char- 


CII.  XVII.]    '  OF   THE    LAW    OF   SHIPPING.  301 

The  voyage  may  be  a  double  one;  a  voyage  out,  and  then  a 
voyage  home ;  or  a  voyage  to  one  port,  and  thence  to  another. 
The  question  sometimes  arise.",  whether  any  freight  is  payable  if 
the  ship  arrives  in  safety  out,  and  delivers  her  cargo  there,  and  is 
lost  on  her  return  with  the  cargo  that  represents  the  cargo  out. 
Of  course,  the  parties  may  make  what  bargain  they  please,  and 
the  law  respects  it;  but  in  the  absence  of  an  agreement  on  this 
point,  the  tendency  of  the  courts,  to  say  the  least,  is  to  consider 
each  voyage,  at  the  termination  of  which  goods  are  delivered, 
as  a  voyage  by  itself,  earning  its  own  freight.' 

terers  appear  to  have  hired  the  ship  itself  at  a  monthly  freight,  but  by  a  clause  in  the 
charter-party,  a  lien  on  the  goods  which  they  miglit  carry,  was  expressly  reserved  to 
the  general  owner.  The  cliarterers  having  become  bankrupt,  the  owner  sued  the 
shippei's  of  goods  for  the  wliole  amount  due  to  him  upon  the  cliarter-party.  But  Lord 
Hardwicke,  admitting  that,  by  the  general  law,  the  cargo  wa»  liable  to  pay  the  freight, 
and  that,  to  tlic  extent  of  their  own  contract  with  the  charterers,  the  defendants  were 
liable,  decided  that  they  were  not  so  for  tlie  amount  due  upon  the  original  agreement, 
to  which  they  were  not  parties.  Mitchell  i'.  Scaife,  supra,  differed  from  Paul  v.  Birch 
in  the  facts,  that  there  appears  not  to  have  been  any  hiring  of  the  ship  itself,  the  gen- 
eral owner  remaining  the  owner  pro  tempore,  and  no  express  lien  was  therefore  neces- 
sary, or,  as  it  seems,  reserved  in  the  charter-party.  The  captain  signed  bills  of  lading 
for  the  cargo,  the  property  of  third  parties,  at  a  lower  rate  than  that  specified  in  the 
charter-party;  but  on  the  arrival  of  the  vessel  in  port,  the  ship-owner  refused  to  deliver 
tlie  goods  till  the  full  amount  due  to  him  was  paid,  and  trover  was  accordingly  brought 
to  recover  them,  hord  E lie nljorough  said:  "Upon  the  facts  proved,  I  am  of  opinion 
that  the  slii])-owner  had  no  right  to  detain  the  cargo  for  more  than  the  freight  mentioned 
in  the  bill  of  lading.  The  plaintfff  is  the  bond  Jide  indorsee  of  the  bill  of  lading,  and, 
having  paid  the  bills  of  exchange,  must  be  taken  to  be  the  purchaser  and  owner  of  the 
cargo.  He  is  in  no  degree  connected  with  any  fraud  upon  the  charter-party.  He  knew 
that  this  is  an  instrument  which  the  master  has,  in  general,  authority  to  sign,  and  he 
seems  to  have  had  no  reason  to  suspect  that  this  authority  was  not  properly  exercised 
upon  this  occasion.  Under  such  circumstances,  I  am  of  opinion  that  the  owner  of  the 
ship  cannot  be  heard  to  aver  against  the  contract  created  by  his  own  agent."  The  doc- 
truie  of  Paul  v.  Birch  was  further  ratified  in  Christie  v.  Lewis,  and  Faith  v.  East  India 
Co.  In  the  former,  Chief  Justice  Richardson  said  :  "  It  is  true  that,  according  to  the 
decision  in  Paul  ^!.  Birch,  the  owner  has  not  a  lien  on  the  goods  mentioned  in  the  bills 
of  lading,  for  all  his  freight  due  on  the  charter-party,  but  he  is  entitled  to  the  freight  on 
the  bills  of  lading,  in  preference  to  the  freighter."  But,  sentble,  "  that,  if  the  lading  of 
the  ship  belong  to  the  charterer,  and  such  lading  is  subject  to  the  ship-owner's  lien  for 
the  freight  reseiwed  by  the  charter-party,  such  lading,  if  it  be  sold  by  the  charterer  after 
it  is  put'on  board,  would  pass  to  the  purchaser,  subject  to  the  lien  which  the  ship-owner 
had  before  the  sale."     Per  Tindall,  C.  J.,  in  Small  v.  Moates,  supra. 

1  Abbott  on  Shipping,  463  ;  Mackrell  v.  Simond,  id.  464 ;  Byrne  v.  Pattinson,  id. 
466  ;  Smith  v.  Wilson,  id.  469,  8  East,  4.37 ;  Storer  v.  Gordon,  3  M.  &  S.  308 ;  Gibbon 
V.  Mendez,  2  B.  &  Aid.  17;  Crozier  v.  Smith,  1  Scott,  N.  R.  338  ;  The  Friends,  1  Edw. 
Ad.  246  ;  Barker  v.  Cheriot,  2  Johns.  352  ;  Scott  v.  Libby,  2  Johns.  336  ;  Pennoyer  v. 
Hallet,  15  Johns.  332;  Burrill  v.  Cleeman,  17  Johns.  72;  Coffin  v.  Storer,  5  Mass. 
252  ;  Brown  v.  Hunt,  11  id.  45;  Locke  v.  Swan,  13  id.  76  ;  Towle  v.  Kettcll,  5  Cush. 
18-;  Blanchard  v.  Bucknam,  3  Grecnl.  1;  Hamilton  v.  Warfield,  2  Gill  &  Johns.  482. 
In  Brown  v.  Hunt,  supra,  Chief  Justice  Sewall  said :  "  It  is  not  disputed  that,  where 
an  outward  voyage  and  a  homeward  voyage  are  spoken  of  in  a  contract  as  distinct, 
there  the  freight  becomes  due  upon  the  performance  of  each  voyage.  It  would,  how- 
ever, be  unreasonable  to  suppose  this  construction  to  be  restricted  to  the  particular  ex- 
pressions and  case  of  an  outward  and  homeward  voyage.  Any  other  expressions 
descriptive  of  a  voyage  or  adventure  consisting  of  several  distinct  and  separate  pas- 
sages or  voyages,  are  within  the  same  reason,  and  seem  to  be  governed  by  the  same 
rule."  • 

31. 


362  ELEMENTS   OF   MERCANTILE   LAW.  *    [CIL  XVII. 

As  time  has  become  of  the  utmost  importance  in  commercial 
transactions,  both  parties  to  this  contract  should  be  punctual,  and 
cause  no  unnecessary  delay  ;  and  for  such  delay  the  party  injured 
would  have  his  remedy  against  the  party  in  fault.'  The  charter- 
party  usually  provides  for  so  many  "  lay-days,"  and  for  so  much 
"demurrage."  Lay-days,  or  working  days,  are  so  many  days 
which  the  charterer  is  allowed  for  loading,  or  for  unloading  the 
vessel.  These  lay-days  are  counted  from  the  arrival  of  the  ship 
at  her  dock,  wharf,  or  other  place  of  discharge,  and  not  from  her 
arrival  at  her  port  of  destination,  unless  otherwise  agreed  on  by 
the  parties.2  In  the  absence  of  any  custom  or  bargain  to  the 
contrary,  Sundays  are  computed  in  the  calculation  of  lay-days  at 
the  port, of  discharge  ;  but  if  the  contract  specifies  "  working  lay- 
days," Sundays  and  holidays  are  excluded.^  If  more  time  than 
the  agreed  lay-days  is  occupied,  it  must  be  paid  for ;  and  "  de- 
murrage" means  what  is  thus  paid.  Usually,  the  charterer  agrees 
to  pay  so  much  demurrage  a  day.  If  he  agrees  only  to  pay  de- 
murrage, without  specifying  the  sum,  or  if  so  many  working  days 
are  agreed  on,  and  nothing  more  is  said,^  it  would,  generally  at 

1  "  There  can  be  no  doubt,  I  think,  that,  when  theve  has  been  no  express  agreement 
for  demurrage,  if  the  vessel  is  detained  an  unreasonable  time  by  the  freighter  or  con- 
signee, the  owner  of  the  vessel  may  recover  damages  in  the  nature  of  demurrage  for 
such  detention.  To  sustain  such  action,  it  must  appear  that  the  vessel  was  improperly 
detained."  Per  Harris,  J.,  in  Clcndaniel  v.  Tuckcrman,  17  Barb.  184.  See  also  Kell 
V.  Anderson,  10  Mees.  &  Wels.  498;  Horn  v.  Bensusan,  9  Car.  &  Payne,  709. 

2  Brown  v.  Johnson,  10  Mees.  &  Wels.  331 ;  Kell  v.  Anderson,  id.  498  ;  Brereton  v. 
Chapman,  7  Bing.  559 ;  Gibbens  v.  Buisson,  1  Bing.  N.  C.  283,  1  Scott,  133 ;  Bailey 
V.  De  Arroyave,  7  Adol.  &  Ell.  919. 

^  Brooks  V.  Minturn,  1  Cal.  481.  In  England,  it  has  simply  been  held  that  the 
lay-days  may  be  "  running  days,"  where  such  appears  on  the  charter-party  to  have 
been  the  intention  of  the  parties.  Brown  v.  Johnson,  supra.  It  is  not  necessary,  before 
they  can  begin  to  run,  that  the  consignees  should  be  notified  of  the  arrival  of  the  vessel. 
Harman  v.  Clarice,  4  Campb.  159  ;   The  Same  v.  Mant,  id.  161. 

*  "  Demurrage,"  so  called,  can  be  recovered,  properly  speaking,  only  where  it  is 
reserved  by  the  charter-party  or  bill  of  lading.  The  remedy,  where  no  such  express 
reservation  exists,  appears  to  be  by  an  action  on  the  case  for  damages,  in  the  nature  of 
demurrage,  for  the  detention.  See  Kell  v.  Anderson,  10  Mees.  &  Wels.  498,  where 
Abinger,  C.  B.,  said :  "  I  thought  that,  as  no  •  time  was  limited  by  the  charter-party, 
from  which  the  demurrage  was  to  be  reckoned,  it  must  be  reckoned  from  the  time  of 
the  ship's  arrival  at  the  ordinary  place  of  discharge,  and  that,  if  she  was  prevented  from 
discharging  sooner  by  the  fault  of  the  defendant,  that  should  have  been  the  subject  of 
an  action  on  the  case,  and  not  of  an  action  for  demurrage."  So,  Harris,  J.,  in  4he 
recent  American  case  of  Clendaniel  v.  Tuckerman,  17  Barb.  184:  "It  is  true  that  de- 
murrage, properly  so  called,  is  only  payable  when  it  is  stipulated  for  in  the  contract  of 
aftrcightment;  but  it  is  also  true,  that,  when  a  vessel  has  been  improperly  detained  by 
the  freighter  or  consignee  of  the  cargo,  the  owner  may  have  a  special  action  for  the 
damage  resulting  to  him  from  the  detention."  See  also,  on  this  point,  Brouncker  v. 
Scott,  4  Taunt.  1  ;  Horn  v.  Bensusan,  9  Car.  &  Payne,  709  ;  Atty  v.  Parish,  4  Bos.  & 
Pul.  104 ;  Robertson  v.  Bethune,  3  Johns.  342  ;  Evans  v.  Forster,  1  Barn.  &  Adol.  118. 
In  Brouniker  v.  Scott,  supra,  the  master  of«a  ship  brought  an  action  to  i-ecover  a  com- 


CII.  XVir.]  OF   THE   LAW    OF   SHIPPING.  303 

least,  be  considered  that  the  number  of  lay-days  determined  what 
was  a  reasonable  and  proper  delay,  and  that  for  whatsoever  was 
more  than  this,  the  party  in  fault  must  pay  a  reasonable  indem- 
nity.^ If,  after  the  lay-days  allowed  for  unlading,  have  com- 
menced, and,  of  course,,  after  a  safe  arrival,  but  before  the  cargo 
is  unladen,  ship  and  cargo,  or  cargo  alone,  is  lost,  without  the 
fault  of  the  ship,  of  the  owner,  or  of  the  master,  the  freight  or 
charter-money  is  due,  because  that  was  earned  by  the  safe 
arrival,^ 

If  time  be  occupied  in  the  repairs  of  the  ship,  which  are  made 
necessary,  without  the  fault  of  the  owner  or  master,  or  of  the 
ship  itself,  that  is,  if  they  do  not  arise  from  her  original  unsea- 
worthiness, the  charterer  pays  during  this  time.^ 

Many  cases  have  arisen  wherggthe  ship  was  delayed  by  differ- 
ent causes,  aiKi  the  question  occurred,  which  party  should  pay 
for  the  time  thus  lost.  On  the  whole,  we  should  say  that  no 
delay  arising  from  the  elements,  as  from  ice,  or  tide,  or  tempest, 
or  from  any  act  of  government,  or  from  any  real  disability  of  the 
consignee,  which   could  not  be  imputed  to  his  own  act,  or  to 

pensation  in  damages  for  the  deteution  of  bis  ship  beyond  a  reasonable  time  for  the 
delivery  of  her  cargo  in  the  port  of  London,  and  declared  also  generally  for  demurrage. 
It  was  held  that  such  an  action  could  not  be  maintained  by  the  master,  whatever  right 
the  owners  might  have  to  sue  in  their  own  names.  See  also  Evans  v.  Forster,  supra. 
But  where  the  master  is  owner  pro  tempore,  he  may  bring  the  action.  Thus,  whei-e  he 
sailed  the  vessel  under  a  contract  with  the  owner,  by  which  he  was  to  find  the  crew  and 
provisions,  pay  half  the  labor,  port  charges,  &c.,  and  receive  half  the  net  freight  earned 
by  the  vessel,  "it  was  held  that  he  thereby  acquired  a  special  property  in  the  ship  suffi- 
cient to  enable  him  to  maintain  an  action  for  damages  in  the  nature  of  demurrage. 
Clendaniel  v.  Tuckerman,  supra. 

1  Rogers  v.  Forresters,  2  Campb.  483 ;  Burmester  v.  Hodgson,  id.  488.  Even  where 
the  rate  of  demurrage  is  fixed  by  the  agreement,  it  has  been  held  not  conclusive  on 
either  party.  See  Moorsom  v.  Bell,  2  Campb.  616,  where  Lord  Ellenhorough  said: 
"  If  a  ship  "is  detained  beyond  her  days  of  demurrage,  pirima  facie,  the  sum  allowed  as 
demurrage  shall  be  taken  as  the  measure  of  compensation.  But  it  is  open  to  the  ship- 
owner to  show  that  more  damage  has  been  sustained,  and  to  the  freighter  to  show 
there  has  been  less  than  would  thus  be  compensated.  We  think,  however,  that  it 
would  require  strong  evidence  to  overcome  the  specific  agreement  of  the  parties,  even 
if  such  evidence  were  admitted." 

^  Brown  v.  Kalston,  9  Leigh,  5.32;  Clendaniel  v.  Tuckerman,  17  Barb.  184.  In  this 
last  case,  whilst  waiting  to  unload  her  cargo,  the  vessel  was  capsized  by  a  freshet,  and 
the  greater  part  of  her  cargo  lost.  But  freight  was  claimed  and  allowed  for  the  whole, 
on  the  ground  stated  in  the  text. 

3  See  Kimball  i\  Tucker,  10  Mass.  192.  "The  hirer  must  not  abandon  the  vessel 
while  he  can  keep  her  afloat,  and  suitably  provided  for  the  employment  and  destination 
for  which  she  was  hired  ;  and  the  owner  must  be  ready  to  pay  all  expenses  and  damages 
necessarily  incurred  for  the  purpose."  But  the  freight  will  not  be  bound  by  the 
charter-partv,  unless  the  vessel  can  be  repaired  within  a  reasonable  time.  Purvis  v. 
Tunno,  1  Brev.  260. 


364  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

his  own. wrongful  neglect,  would  give  rise  to  a  claim  on  the  char- 
terer for  demurrage.^ 

Den:iurrage  seems  essentially  due  only  for  the  fault  or  volun- 
tary act  of  the  charterer;^  but  if  he  hires  at  so  much  on  time, 
that  is,  by  the  day,  week,  or  month,  then,  if  the  vessel  be  delayed 

1  Rogers  V.  Hunter,  1  Mood.  &  Mai.  63  ;  Dobsou  v.  Droop,  id.  441 ;  Douglas  v.  Moody, 
9  Mass.  555.  In  England,  liowever,  it  was  held,  in  the  earlier  cases,  that,  where  the 
charter-party  contains  a  stipulation  to  pay  demurrage,  and  the  ship  is  detained  beyond 
the  lay-days  allowed  by  the  agreement,  the  merchant  must  pay  the  demurrage,  although 
the  delay  was  owing  to  circumstances  entirely  beyond  his  control.  As,  where  the  de- 
tention was  owing  to  the  crowded  state  of  the  London  docks.  Randall  v.  Lynch,  2 
Campb.  356,  12  East,  179.  As  to  the  fact  that  the  goods  of  the  defendant  wei'e  stowed 
underneath  tliose  of  other  parties,  see  Leer  v.  Yates,  3  Taunt.  387 ;  Harman  v.  Gandolph, 
Holt,  N.  P.  35.  But  see  Lord  Tenterden,  in  Dobson  v.  Droop,  1  Mood.  &  Mai.  441. 
By  a  proliibition  of  intercourse  between  the  ship  and  the  shore,  on  account  of  infectious 
disease,  see  Barker  v.  Plodgson,  3  Maul.  &  Sel.  267.  So,  where  the  delay  was  owing  to 
frost.  Barret  v.  Dutton,  4  Campb.  333.  Or  to  the  act  of  a  foreign  government,  in  pro- 
hibiting the  exjiortation  of  the  goods  stipWatcd.  Blight  v.  Page,  3  Bos.  &  Pul.  295,  n.  a. 
To  the  regulations  of  the  custom-house.  Hill  v.  Idle,  4  Campb.  327.  Or  the  unlawful 
act  of  the  custom-house  agents.  Bessey  v.  Evans,  4  Campb.  131.  On  the  other  hand, 
in  Rogers  v.  Hunter,  1  Moo.  &  Mai.  63,  Lord  Tenterden  remarked,  in  reference  to  the 
foregoing  decisions :  "  I  have  great  difficulty  in  saying,  that,  when  the  consignee  has 
had  no  opportunitj^  of  taking  his  goods  within  the  time  stipulated,  he  is  bound  by  the 
contract  to  pay  for  not  doing  so ;  he  cannot,  I  think,  in  that  case,  be  said  to  detain  the 
vessel.  On  the  other  hand,  I  do  not  agree  to  the  proposition  that  he  has  necessarily 
the  stipulated  time,  to  be  computed  from  the  period  when  the  discharge  of  his  own 
goods  can  be  commenced  ;  I  think,  aft'er  that  period  he  must  use  reasonable  dispatch. 
The  true  principle  seems  to  be  this :  If  the  goods  of  the  particular  consignee  are  not 
ready  for  discharge  at  the  time  of  the  ship's  arrival,  he  must  have  a  reasonable  time  for 
removing  them  after  they  are  so ;  if  in  such  a  case,  using  reasonable  despatch,  he  can- 
not clear  them  within  the  stipuhited  period  from  the  ship's  being  ready  to  discharge  her 
cargo  generally,  he  will  not  be  liable  for  demurrage  till  the  expiration  of  such  reason- 
able time ;  butwhen.it  is  expired,  he  will  be  liable,  though  the  stipulated  period,  if 
computed  from  the  time  wlien  tlie  discharge  of  his  own  goods  could  have  commenced, 
is  not  at  an  end."  In  this  country,  the  equitable  doctrine  of  Lord  Tenterden  seems  to 
have  met  with  approval.  Thus,  in  Douglas  u.  Moody,  9  Mass.  555,  the  court  say: 
"As  to  the  demurrage,  a  detention  by  capture  is  not  demurrage.  A  covenant  to  pay 
for  demurrage  applies  to  a  detention  voluntary  in  the  party  contracting  for  the  freight." 
If  the  delay  be  owing  to  the  act  of  the  ship-owner  or  his  agent,  no  demurrage,  of 
course,  is  payable.  Barker  v.  Mo A'g&on,  supra ;  Benson  v.  Blunt,  1  Ad.  &  Ell.  N.  S. 
870.  Where  it  is  agreed  that  demurrage  shall  be  paid  for  the  time  during  which  a 
ship  is  detained  to  take  on  board  her  cargo,  the  claim  ceases  so  soon  as  she  is  loaded 
and  cleared,  although,  owing  to  adverse  weather,  she  cannot  put  to  sea,  or  is  driven 
back  into  port.  And  it  was  so  held  in  a  case  where  the  delay  caused  by  the  freighters 
appears  to  have  been  the  ultimate  cause  of  the  subsequent  detention,  by  keeping  the 
vessel  in  port  until  the  season  for  navigation  was  almost  closed.  Jamieson  v.  Laurie, 
6  Bro.  P.  C.  474,  and  Abbott,  p.  315,  where  a  British  vessel  was  detained  in  St.  Peters- 
burg, to  take  on  board  her  cargo,  nearly  two  months  beyond  the  stipulated  time,  and 
then  setting  sail,  was  driven  back  and  frozen  in  for  the  winter,  which  began  somewhat 
earlier  than  usual.  Demurrage  in  this  case  was  awarded  only  to  the  sailing  of  the 
vessel.  And  so,  where,  by  the  delay,  the  vessel  lost  the  opportunity  of  sailing  with 
convoy,  and  was  obliged  to  wait  nearly  two  months  for  another,  the  owner  having 
covenanted  that  she  should  sail  with  convoy.  Connor  v.  Smythe,  5  Taunt.  654.  A 
similar  rule  was  adopted  where  demurrage  was  stipulated  to  be  paid  whilst  tiie  ship 
was  waiting  for  convoy.  See  Lannoy  y.  Werry,  4  Bro.  P.  C.  630.  Tliese  cases  appear 
to  illustrate  the  principle  that  the  freighter  is  not  responsible,  at  least  in  this  form  of 
action,  for  any  consequential  injury,  to  the  ship-owner,  arising  from  the  delay.  See 
Clendaniel  v.  Tuckerman,  17  Barb.  184. 

-  Douglas  V.  Moody,  9  Mass.  555.     See  preceding  note. 


• 


CII.  XVII.]  OF   THE   LAW   OF    SIIIPriNO.  365 

by  seizure,  embargo,  or  capture,  and  the  impediment  is  removed, 
and  the  ship  completes  her  voyage,  the  charterer  pays  for  the 
whole  time.i  If  she  be  condemned,^  or  otherwise  lost,  this  termi- 
nates the  voyage  and  the  contract.- 

The  contract  may  be  dissolved  by  the  parties,  by  mutual  con- 

1  So  held  in  the  following:  cases,  as  to  capture:  Odlin  v.  Ins.  Co.  of  Pcnn.  2  Wash. 
C.  C.  312;  The  Ship  Nathaniel  Hooper,  3  Sumn.  542;  Patron  v.  Silva,  1  Miller, 
(Louis.)  277;  Spaflbrd  v.  Dod^-e,  14  Mass.  G6.  See  post,  n.  2,  infra.  But  sec  The 
llirarn,  3  Kol).  Adm.  180.  For  the  application  of  the  doctrine  to  embargo,  see  Bork  v. 
Norton,  2  JMcLcan,  422  ;  M'Bride  v.  JMarine  Ins.  Co.  5  Johns.  308;  Palmer  v.  Loril- 
lard,  16  id.  357;  Baylies  v.  Fettyplace,  7  Mass.  325;  Hadley  v.  Clarke,  8  Term,  25!). 
A  distinctiqn  .ijipe.ars,  however,  to  have  been  taken  in  some  of  the  English  cases,  be- 
tween the  ctlect  of  an  embargo  upon  British  vessels,  upon  contracts  of  affreightment 
between  British  subjects,  and  one  imposed  upon  the  ships  of  a  foreign  nation,  "by  way 
of  hostility  and  reprisal."  Thus,  in  Touteng  r.  Hubbard,  3  Bos.  &  Pul.  291,  Lord 
Alvanley  held  that  the  contract  of  afiVeightment  between  the  British  merchants  and  the 
owner  of  a  Swedish  vessel,  was  dissolved  by  a  hostile  embargo  on  all  Swedish  ships  ; 
admitting,  however,  that,  had  the  embargo  been  laid  on  by  a  third  State,  it  might,  per- 
haps, have  only  pro<lueed  a  suspension  of  the  contract.  And  in  the  three  cases,  of 
Conway  i\  Gray,  Conway  v.  Forbes,  and  Mowry  v.  Shedden,  cited  in  Park  on  Ins. 
(6th  cd.)  p.  610,  Lord  Ellenboi'ough  held  that  an  American  citizen  could  not  recover 
from  a  I3ritish  underwriter,  under  an  abandonment  founded  upon  the  Embargo  imposed 
by  the  American  go\«rnment.  These  cases,  it  was  remarked  by  Chief  Justice  Kent,  in 
McBride  v.  Mar.  Ins.  Co.  supra,  seem  to  have  been  decided  rather  upon  political  con- 
siderations than  upon  any  principle  of  law.  The  case  of  The  Isabella  Jacobina,  4  C. 
Eobins.  77,  (Adm.  R.)  also  came  up  under  the  Swedish  embargo  ;  but  the  decision  in 
this  case  appears  to  have  turned,  partly  at  least,  upon  the  fact,  that  the  cargo,  one  of 
"pilchards,"  could  not  wait  till  the  embargo  might  be  taken  off.  A  blockade  of  the 
port  of  departure  suspends,  but  does  not  dissolve  the  contract.  So  held  in  this  country, 
in  Palmer  v.  Lorillard,  supra,  overruling  15  Johns.  14.  See  also  Ogden  v.  Barker,  18 
Johns.  87.  And  Richardson  v.  Maine  Ins.  Co.  6  Mass.  102,  118.  In  Stoughton  v. 
llappclo,  3  Serg.  &  Rawde,  559-,  the  court  held,  in  direct  opposition  to  Ogden  v.  Barker, 
supra,  that  the  right  of  the  master  to  retain  the  g^ods  was  destroyed  by  the  blockade, 
his  remedy,  if  any,  being  by  action  on  the  case,  without,  however,  expressly  deciding 
that  the  contract  of  affreightment  was  dissolved. 

^  See  Spaflbrd  v.  Dodge,  14  Mass.  66.  The  effects  of  the  hostile  seizure  of  a  vessel 
on  the  contract  of  charter-party,  are  thus  stated  by  Justice  Jackson,  in  this  case,  where 
the  charterers  were  owners  pro  tempore  :  "  Here  was  a  hostile  seizure  of  the  ship.  This 
might  have  been  followed  by  a  condemnation  as  prize,  which  would  undoubtedly  have 
dissolved  the  contract  of  aflVeightment;  but  in  the  events  which  have  happened,. it 
produced  only  a  prolongation  of  the  voyage.  The  ship  was  restored  by  the  sovereign 
under  whose  authority  she  was  seized.  The  captors,  therefore,  admit  that  they  had  no 
right  to  condemn  the  property,  or  to  deal  with  it  as  captiired.  It  makes  no  diflcrence 
that  the  ship  was  carried  into  a  port  of  the  captors,  for  examination,  before  she  was 
restored.  If  this  seizure  produced  a  dissolution  of  the  charter-party,  the  same  conse- 
quence would  follow,  however  short  might  be  the  period  of  the  detention,  and  whether 
she  was  restored  by  the  captors  upon  examination  of  her  papers  at  sea,  or  upon  a  like 
examination  in  port,  or  in  a  court  of  admiralty.  AVe  must  not  confound  this  contract 
with  that  contained  in  a  policy  of  insurance.  The  assured  may,  during  such  a  deten- 
tion, abandon  the  ship  to  the  insurers,  and  recover  as  for  a  total  loss  ;  because  the  in- 
surers have  agreed  that,  in  case  of  such  an  interruption  of  his  voyage,  whilst  it  is  un- 
certain how  soon  it  can  be  resumed,  or  whether  it  can  ever  be  further  prosecuted,  he 
may  disembarrass  himself  of  the  adventure,  and  that  they  will  pay  him  for  the  ship,  and 
take  the  future  risk  upon  themselves.  But  the  owner  of  the  ship  makes  no  such  con- 
tract with  the  hirer,  in  a  common  charter-party  of  alfreightment.  '  He  is  to  be  paid  for 
the  whole  time  the  ship  is  out  of  his  possession,  in  virtue  of  the  contract,  whether  her 
voyage  be  long  or  short,  and  by  whatever  accident  she  may  be  delayed  ;  provided  the 
delay  do  not  arise  from  his  own  default,  and  provided  also',  that  the  voyage  be  finally 
completed." 

31* 


366  ELEMENTS    OF   MERCANTILE   LAW.  [CH.   XVII. 

sent,  or  against  their  consent  by  any  circumstance  which  makes 
the  fulfihnent  of  the  contract  illegal ;  ^  as,  for  example,  by  a  dec- 
laration of  war  on  the  part  of  the  country  to  which  the  ship 
belongs,  against  that  to  which  she  was  to  go.^  So,  either  an 
embargo,^  or  an  act  of  non-intercourse,*  or  a  blockade  of  the  port 
to  which  the  ship  was  going,^  may  either  annul  or  suspend  the 
contract  of  charter-party.  And  we  should  say  they  would  be 
held  to  suspend  only,  if  they  were  temporary  in  their  terms,  and 
did  not  require  a  delay  wiiich  would  be  destructive  of  the  purposes 
of  the  voyage. 

In  reference  to  all  these  points,  it  is  to  be  understood  that  if 
the  parties  know  the  circumstance  when  they  make  their  bar- 

1  See  Ocllin  v.  Ins.  Co.  of  Penn.  2  Wash.  C.  C  312 ;  ralmer  v.  Lorillard,  15  Johns. 
14,  and  16  id.  348;  Baylies  v.  Fettyplace,  7  Mass.  338,  per  Sedgwick,  J. ;  Browne  v. 
Delano,  12  Mass.  370;  Barker  v.  Hodgson,  3-  Maule  &  Sel.  2G7  ;  Liddard  v.  Lopes, 
10  East,  526;  Evans  r.  Hutton,  6  Jurist,  1042.  But  it  has  been  held  that  the  prohi- 
bition of  a  foreign  government  to  export  the  articles  of  which  the  cargo  was  to  be 
composed,  did  not  dissolve  the  contract  or  excuse  its  non-performance.  Blight  v. 
Page,  3  Bos.  &  Pul.  295,  n.  (a,)  and  Abbott,  p.  597.  See  also<6joerds  v.  Luscombe, 
16  East,  201,  and  Richardson  et  al.  v.  Marine  Ins.  Co.  6  Mass.  112.  "Because  the 
municipal  laws  of  any  State  have  not  the  force  of  laws  without  its  jurisdiction,  voyages 
prohibited  in  one  State  are  not  in  any  other  State  deemed  for  that  reason  to  be  illegal." 
Per  Parsons,  C.  J. 

■-^  Abbott  on  Ship.  596  ;  Palmer  v.  Lorillard,  16  Johns.  356,  357.  But  the  breaking 
out  of  hostilities  between  the  nation  to  which  either  the  ship  or  cargo  belongs,  and  any 
other  nation  to  which  they  are  not  destined,  does  not  dissolve  the  contract.  Abbott  on 
Ship.  p.  596. 

3  "  An  embargo,"  said  Chief  Justice  Kent,  in  M'Briie  v.  Marine  Ins.  Co.  5  Johns. 
299,  308,  "  is  not  required  to  be,  upon  the  face  of  the  Act,  definite  as  to  time.  It  is  fre- 
quently otherwise ;  and  the  case  of  the  British  embargo  on  vessels  bound  to  Leghorn, 
as  stated  in  Hadley  v.  Clarke,  8  Term,  259,  is  a  pertinent  and  strong  instance  of  the 
kind.  But  it  is,  from  tlie  very  nature  and  policy  of  the  measure,  a  temporary  restraint. 
It  suspends,  but  does  not  dissolve  the  contract  of  insurance,  any  more  than  the  contract 
to  carry  goods.  The  error  of  the  counsel  for  the  defendants  consists  in  considering  the 
embargo  imposed  by  congress  as  a  permanent  prohibition,  working  a  dissolution  of  the 
contract.  We  must  judge  of  the  act  from  what  it  purports  to  be,  and  from  the  terms 
which  it  uses.  An  embargo  'ex  vi  tcnnini'  means  only  a  temporary  suspension  of 
trade.  A  general  and  permanent  prohibition  of  trade  would  not  be  an  embargo."  See 
ante,  p.  365,  n.  1. 

*  "  When  the  sovereign  of  the  country  to  which  the  ship  belongs  shall  prohibit  his 
subjects  from  trading  with  a  foreign  country  or  port,  whether  the  prohibition  be  a  con- 
sequence of  his  declaring  war  against  the  foreign  country,  or  be  made  by  an  express 
ordinance  for  any  cause  at  the  will  of  the  sovereign,  a  voyage  to  that  country  for  the 
purpose  of  trade  is  illicit."  Per  Parsons,  C.  J.,  in  Richardson  et  al.  v.  Marine'  Ins.  Co. 
6  Mass.  111.  See  also  Palmer  v.  Lorillard,  16  Johns.  356.  "  There  is  no  difference 
in  principle,"  says  Chancellor  Ke^it,  (3  Comment.  249,)  "  between  a  complete  interdic- 
tion of  commerce,  which  prevents  the  entry  of  the  vessel,  or  a  partial  one  in  relation  to 
the  merchandise  on  board,  which  prevents  it  from  being  landed."  Patron  v.  Silva, 
1  Mill,  (Lou.)  277.  So  where  the  cargo  is  prohibited  from  exportation.  Barker  v. 
Hodgson,  3  M.  &  S.  267. 

^  A  blockade  of  the  port  of  destination,  by  rendering  the-  voyage  to  such  port  in  a 
certain  sense  illegal,  would  appear  on  principle  to  have  the  effect  of  dissolving  the  char- 
ter-party, (see  n.  1,  supra,)  and  accordingly  this  has  been  held  to  be  its  efi'ect  in  several 
cases.  See  Scott  v.  Libby,  2  Johns.  336  ;  The  Tutela,  G  Rob.  177.  As  to  the  effect  of 
a  blockade  of  the  port  of  departure,  see  ante,  p.  365,  n.  1. 


en.   XYII.]  OF   THE   LAW    OF   SniPPINQ.  367 

gain,  and  provide  for  it,  any  bargain  they  choose  to  make  in  rela- 
tion'to  it  would  be  enforced,  unless  it  required  one  or  other  of 
the  parties  to  do  something  prohibited  by  the  law  of  nations,  or 
of  the  country  in  which  the  parties  resided,  and  to  whose  tribu- 
nals they  must  resort.^  ^ 


SECTION  VIII. 

OF    GENERAL   AVERAGE. 

Whichever  of  the  three  great  mercantile  interests  —  ship, 
freight,  or  cargo  —  is  voluntarily  lost  or  damaged  for  the  benefit 
of  the  others,  if  the  others  receive  benefit  therefrom,  they  must 
contribute  ratably  to  the  loss.  That  is  to  say,  such  a  loss  is 
averaged  upon  all  the  interests  and  property  which  derive  ad- 
vantage from  it.     This  rule  is  ancient  and  universal.^ 

The  loss  must  be  voluntary.  Therefore,  if  the  cargo  be  actu- 
ally thrown  over,  and  the  ship  saved  thereby,  or  if  the  ship  be 

1  "  Every  engagement  to  perform  a  future  act  is  in  one  sense  conditional.  If  it  be- 
comes impossible  by  any  act  not  imputable  to  the  party  who  is  bound  to  perform  it, 
unless  he  assumes  the  risk  of  all  contingencies,  he  is  excused."  Per  Ware,  in  The 
Eliza,  Daveis,  316.  Where  the  master  of  a  ship  covenanted  in  a  charty-party  to  go  to  a 
certain  port  of  America  and  receive  a  loading  from  the  freighter,  with  the  exception  of  the 
restraints  of  rulers,  &c.,  but  the  freighter  covenanted  absolutely  to  provide  the  loading, 
without  any  such  exception.  Lord  EUenborough  was  of  opinion  that  an  embargo  in  the 
American  jjort,  which  prevented  the  freighter  from  loading  the  ship,  did  not  discharge 
him  from  his  covenant.  Sjoerds  i\  Luscombe,  16  East,  201.  "  Supposing,"  said  his  lord- 
ship, "  all  the  facts  stated  appeared  upon  the  records,  the  restraint  of  the  government 
would  not  operate  as  an  excuse  for  the  freighter,  who  was  to  load  the  goods  on  board 
at  all  events,  even  if,  by  the  law  of  the  country,  it  could  not  be  done,  hut  only  for  the 
ship-owner,  who  covenanted  with  that  exception.  I  assume  the  fact  that  nothing  but 
the  embargo  prevented  the  loading  of  the  cargo ;  but  the  result  of  Blight  v.  Page, 
(3  Bos.  &  Pul.  295,  in  note,)  is,  that  if  the  freighter  undertakes  what  he  cannot  per- 
form, he  shall  answer  for  it  to  the  person  with  whom  he  undertakes." 

-  The  doctrine  of  average  is  supposed  to  be  derived  from  the  ancient  Rhodian  law. 
In  the  Digest,  it  is  recognized  as  the  Lex  Rhodia.  Dig.  14,  2,  1.  The  rule,  as  there 
laid  down,  is  this:  "If  goods  are  thrown  overboard  in  order  to  lighten  a  ship,  the  loss 
incurred  for  the  sake  of  all  shall  be  made  good  by  the  contribution  of  all."  The  doc- 
trine has  been  much  discussed  by  foreign  writers,  and  various  rules  respecting  it  have 
been  adopted  in  foreign  ordinances.  Laws  of  Oleron,  art.  8,  9  ;  Ord.  of  Wisbuy, 
art.  20,  21,  38  ;  J'rench  Ord.  liv.  3,  tit.  8;  Cod.  de  Com.,  art.  410;  Emerigon,  ch.  12, 
§  39  ;  Consolato  del  Mare,  cap.  47,  48,  49  ;  Lo  Guidon,  ch.  5,  art.  28;  2  Valin,  167; 
Beawes,  16.5.  But  the  numerous  decisions  upon  questions  of  average,  in  the  English 
and  American  courts,  are  now  the  sources  from  which  the  law  of  average  must  be 
chiefly  derived.  The  history  of  the  law  of  average  is  most  thoroughly  considered  by 
Mr.  Justice  Story,  in  The  Columbian  Ins.  Co.  ;•.  Ashby,  13  Pet.  343.  The  question 
has  been  raised,  whether  the  principles  of  general  average  ajiply  to  a  case  of  jettison  on 
inland  waters.  Rossiter  i'.  Chester,  1  Doug.  (Mich.)  154.  On  principle,  we  have  no 
doubt  that  they  should  be  so  applied.  See  also  Welles.i'.  Boston  Ins.  Co.  6  Pick.  182, 
for  an  instance  of  general  average  in  fire  insurance. 


368  ELEMENTS    OF   MERCANTILE   LAW.  [CH.    XVII. 

actually  cast  ashore,  and  the  goods  saved  thereby,  yet,  if  in  the 
first  case  the  cargo  could  not  possibly  have  been  saved,  and  it  in 
the  second  case,  the  ship  could  not  possibly  have  been  saved, 
there  is  no  average.  We  distinguish  this  from  the  cases  where 
all  cannot  possibly  be  saved,  but  something  may  be  if  something 
else  is  sacrificed.  Here  there  is  no  doubt  that  the  thing  lost  by 
voluntary  choice  is  to  be  paid  for.  But,  while  we  admit  that  the 
question  is  one  of  much  difHculty,  as  well  as  of  uncertainty  on 
the  authorities,  we  incline  to  say  that  the  loss  must  be  voluntary ; 
and  if  the  peril  of  any  one  whole  thing  is  such  that  its  safety  is 
impossible,  the  destruction  of  it  in  a  way  to  insure  the  safety  of 
the  rest  is  not  such  a  volunlari/  loss  or  sacrifice  as  would  give  a 
claim  for  indemnity.  There  have  been  many  cases,  and  some 
conflict,  respecting  the  voluntary  stranding  of  the  ship.  But  there 
ought  to  be  no  doubt  whatever  about  the  principle,  w^hatever  may 
be  the  difficulty  of  applying  it  in  different  cases.  If  the  ship  must 
be  lost  in  that  tempest,  and  only  a  place  is  selected  favorable  to 
the  safety  of  life  and  cargo,  there  can  be  no  average.  But  if  the 
ship,  although  in  imminent  danger,  may  be  saved,  and  a  substan- 
tial chance  of  safety  is  voluntarily  given  up  for  the  sake  of  the 
cargo,   there   must  be   an  average.^      If  a  ship  is  accidentally 

1  Two  questions  have  given  rise  to  much  discussion  in  cases  where  a  claim  for  aver- 
age has  been  made  for  the  benefit  of  a  ship  which  has  been  voluntarily  stranded. 
1.  Can  there  be  a  voluntaiy  stranding  so  as  to  give  a  claim  for  average,  if  the  vessel 
would  have  perished  at  any  rate  ?  2.  Do  the  ship-owners  have  a  claim  for  average,  if 
a  vessel  is  voluntarily  stranded,  and  cannot  be  got  off,  so  that  she  is  totally  lost  1 
Both  of  these  questions  have  been  settled  in  the  Supreme  Court  of  the  Unite"d  States, 
by  most  elaborate  decisions.  The  Columbian  Ins.  Co.  ('.  Ashby,  13  Pet.  331,  and  Bar- 
nard V.  Adams,  10  How.  270.  In  the  arguments  and  decisions  in  these  two  cases,  the 
law  on  these  questions  seems  to  be  exhausted.  Upon  the  first  question,  Grief,  J.,  in 
Barnard  v.  Adams,  said :  "  In  order  to  constitute  a  case  for  general  average,  three 
things  must  concur:  1st.  A  common  danger,  or  a  danger  in  which  ship,  cargo,  and 
crew  all  participate,  —  a  danger  imminent  and  apparently  '  inevitable,'  except  by  vol- 
untarily incurring  the  loss  of  a  portion  of  the  whole  to  save  the  remainder.  2d.  There 
must  be  a  voluntary  jettison,  jactus,  or  casting  away,  of  some  portion  of  the  joint  con- 
cern for  the  purpose  of  avoiding  this  imminent  peril,  periculi  imminentis  evitandi  causa  ; 
or,  in  other  words,  a  transfer  of  the  peril  from  the  whole  to  a  particular  portion  of  the 
whole.  3d.  This  attempt  to  avoid  the  imminent  common  peril  must  be  successful.  It 
is  evident  from  these  propositions,  that  the  assertion  so  much  relied  on  in  the  argument, 
namely,  '  that  if  the  peril  be  inevitable,  there  can  bo  no  contribution,'  is  a  mere  truism, 
as  the  hypothesis  of  the  case  requires  that  the  common  peril,  though  imminent,  shall 
be  successfully  avoided.  Those  who  urge  it  must  therefore  mean  something  else  ;  and 
it  seems,  when  more  carefully  stated,  to  be  this,  '  that  if  the  common  peril  was  of  such 
a  nature  that  the  ^jartits,''  or  thing  cast  away  to  save  the  rest,  would  have  perished  any- 
how, or  perished  '  inevitably,'  even  if  it  had  not  been  selected  to  sufi"er  in  place 
of  the  whole,  there  can  be  no  contribution."  The  cases  of  Caze  t\  Eeilly,  3  Wash. 
C.  C.  298;  Sims  y.  Gurney,  4  Binney,  513;  and  Gray  v.  Wain,  2  Serg.  &  Kawle, 
229  ;  supported  substantially  the  doctrine  of  the  two  cited  above.  Sec  also  Rey- 
nolds  V.  Ocean   Ins.  Co.  22   Pick.    197.       But  the   cases   of   Meech  v.    Robinson, 


CH.   XVII.]  OF   THE   LAW   OF   SHIPPING.  369 

stranded,  and  got  off,  and  the  voyage  resumed,  and  ship,  cargo, 
and  freight  saved,  all  must  contribute  to  the  expense  of  getting 
her  off.'  So,  if  she  be  stranded  near  her  port  of  destination,  and 
the  cargo  be  transported  thither  in  lighters,  this  expense  is  a 
matter  of  average.^  So  would  be  any  sea  damage  sustained  by 
the  goods  in  the  lighters.^ 

So  the  loss  must  not  only  be  voluntary,  but,  what  is  indeed 
implied  in  its  being  voluntary,  it  must  be  for  the  purpose  and 
with  the  intention  of  saving  something  else.  And  this  intention 
must  b'e  carried  into  effect ;  for  only  the  interest  or  property 
which  is  actually  saved  can  be  called  to  contribute  for  that  which 
was  lost.* 

Any  loss  which  comes  within  this  reason,  is  an  average  loss  ; 
as  ransom  paid  to  a  captor  or  pirate  ;  not  so,  however,  if  he  take 
what  he  will,  and  leave  the  ship  and  the  rest,  for  here  is  no  con- 
tribution.^ So,  cutting  away  bulwarks  or  the  deck,  to  get  at 
goods  for  jettison,  is  an  average  loss.^  So  is  a  damage  which, 
though  not  intended,  is  the  direct  effect  and  consequence  of  an 
act  which  was  intended  ;  as,  where  a  mast  is  cut  away,  and  by 

4  Whart.  360,  "Walker  v.  United  States  Ins.  Co.  11  Serg.  &  Rawlc,  61,  and  Crock- 
ett V.  l^oilge,  3  Fairf.  190,  support  the  doctrine  that,  if,  at  the  time  of  the  sacri- 
fice of  the  ship,  there  was  no  possibility  of  saving-  it,  there  will  be  no  average.  In 
Bradhurst  v.  Columbian  Ins.  Co.  9  Jolins.  9,  it  was  held  that,  if  a  ship  in  a  case 
of  extremity,  and  to  avoid  impending  danger,  be  voluntarily  run  ashore,  and  she  is 
afterwards  recovered  and  performs  the  voyage,  the  damages  resulting  from  this  sac- 
rifice are  to  be  borne  as  general  average ;  but  if  the  ship  should  happen  to  be  de- 
stroyed by  so  running  ashore,  then  there  is  no  contribution  from  the  surviving  cargo. 
The  opinion  of  the  court  in  that  case  was  delivered  by  Mr.  Chief  Justice  Kent,  and  gave 
evidence  of  much  thought,  and  of  a  careful  examination  of  authorities.  But  the  decision 
in  Columbian  Ins.  Co.  v.  Ashby,  delivered  by  Mr.  Justice  Story,  with  the  light  derived 
from  the  deci.-^ion  of  Bradhurst  v.  Columbian  Ins.  Co.,  and  from  a  thorough  examina- 
tion of  the  foreign  autliorities,  was  directly  opposed  to  it. 

1  Bedford  Cum.  Ins.  Co.  i'.  Parker,  2  Pick.  1.  If  the  stranding  were  voluntary,  and 
the  ship  recovered,  it  seems  to  be  well  settled  that  the  expense  would  be  a  subject  of 
general  average.  Bradhurst  v.  Columbian  Ins.  Co.  9  Johns.  13  ;  Reynolds  v.  Ocean 
Ins.  Co.  22  Pick.  199. 

-'  Heyliger  r.  N.  Y.  Firemen's  Ins.  Co.  11  Johns.  85. 

3  Lewis  r.  Williams,  1  Hall,  430. 

*  Scudder  v.  Bradford,  14  Pick.  13;  If^illiams  v.  Suffolk  Ins.  Co.  3  Sumner,  .'ilO. 
In  the  latter  case,  Story,  J.,  said  :  "  Tlie  expenses  and  charges  of  going  to  a  port  of  ne- 
cessity to  refit,  can  properly  be  a  general  average  only  where  the  voyage  has  been,  or 
might  be  resumed."  In  Butler  v.  Wildman,  3  B.  &  Aid.  398,  dollars  were  thrown  over- 
board from  a  vessel  which  was  on  the  point  of  being  captured,  to  save  them  from  the 
enemy.     This  was  admitted  by  counsel  not  to  be  a  case  of  general  average.  ^ 

^  Dig.  14,  2,  2,  3.  So  the  necessary  expenses  incurred  in  procuring  the  restoration 
of  a  ship  and  cai'go,  after  capture,  are  allowed  as  general  average.  Spaftbrd  v.  Dodge, 
14  Mass.  66;  Douglas  v.  Moody,  9  Mass.  548.  In  Price  v.  Noble,  4  Taunt.  122,  it 
was  held  that  a  jettison,  made  while  the  vessel  and  cargo  were  in  the  hands  of  the 
enemy,  would  support  a  claim  for  general  average. 

«  Dig.  14,  2.  2,  1  ;  MoIIoy  b.  2,  c.  6,  ^  15  ;  Laws  of  Wisbuv.  art.  55 ;  Abbott  on 
Ship.  580. 


370  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XVII. 

reason  of  it,  water  gets  into  the  hold  and  damages  a  cargo  of 
corn,  this  damage  is  as  much  a  general  average  as  the  loss  of  the 
mast.i 

But  if  a  ship  makes  all  sail  in  a  violent  gale  to  escape  a  lee 
shore,  and  so  saves  ship  and  cargo,  but  carries  away  her  spars, 
&c. ;  or  if  an  armed  ship  fights  a  pirate  or  enemy,  or  beats  him 
off  at  great  loss ;  the  first  is  a  common  sea  risk,^  the  second  a 
common  war  risk,'^  and  neither  of  them  is  a  ground  for  average 
contribution. 

It  is  not  considered  prudent  to  lade  goods  on  deck,  because 
they  are  not  only  more  liable  to  loss  there,  but  hamper  the  vessel, 
and  perhaps  make  her  top-heavy,  and  increase  the  common 
danger  for  the  whole  ship  and  cargo.  Therefore,  by  the  general 
rule,  if  goods  on  deck  are  jettisoned,  (or  cast  overboard,)  they  are 
not  to  be  contributed  for.*  But  there  are  some  voyages  on  which 
there  is  a  known  and  established  usage  to  carry  goods  of  a  cer- 
tain kind  on  deck.     This  justifies  the  carrying  them  there,  and 

1  In  Maggrath  v.  Church,  1  Caines,  196,  the  vessel,  loaded  with  corn,  encountered 
severe  weather,  and  a  mast  was  cut  away  for  the  general  preservation.  In  consequence 
of  the  cutting  away  the  mast,  the  corn  was  injured  by  the  water.  Kent,  J.,  said  :  '•  The 
corn  being  damaged  by  the  cutting  away  of  the  mast,  is  to  be  considered,  equally  with 
the  mast,  a  sacrifice  for  the  common  benefit — a  price  of  safety  to  the  rest ;  and  it  is 
founded  on  the  clearest  equity,  that  all  the  property  and  interest  saved,  ought  to  con- 
tribute their  due  proportion  to  this  sacrifice." 

2  Tower  v.  Whitmore,  4  M.  &  S.  141 ;  Covington  v.  Koberts,  2  B.  &  P.  N.  K.  378. 
In  the  latter  case,  a  vessel  was  captured  by  a  French  privateer,  but,  on  account  of  a 
heavy  gale,  the  privateer  could  not  take  possession  of  her.  To  escape  from  the  priva- 
teer, she  carried  an  unusual  press  of  sail.  She  succeeded  in  escaping,  but  was  much 
strained,  most  of  her  seams  were  opened,  and  the  head  of  her  mainmast  was  carried 
away.  Held,  that  the  damage  to  the  vessel  was  not  a  subject  for  general  average.  Sir 
James  Mansfield,  C.  J.,  said:  "  This  is  only  a  common  sea  risk.  If  the  weather  had 
been  rather  better,  or  the  ship  stronger,  nothing  might  have  happened." 

'^  In  Taylor  v.  Curtis.  6  Taunt.  608,  a  vessel  resisted  a  privateer,  and  finally  beat  her 
off.  The  losses  suffered  were  claimed  as  general  average.  The  claim  was  not  allowed. 
Gihhs,  C.  J.,  said :  "  The  losses  for  which  the  plaintilTs  seek  to  recover  this  contribu- 
tion, are  of  three  descriptions.  1.  The  damage  sustained  by  the  hull  and  rigging  of 
the  vessel,  and  the  cost  of  her  repairs.  2.  The  expense  of  the  cure  of  the  wounds 
received  by  the  crew  in  defending  the  vessel.  3.  Tiie  expenditure  of  powder  and  shot 
in  the  engagement.  The  measure  of  resisting  the  privateer  was  for  the  general  benefit, 
but  it  was  a  part  of  the  adventure.  No  partiRilar  part  of  the  property  was  voluntarily 
sacrificed  for  the  protection  of  the  rest.  The  losses  fell  where  the  fortune  of  war  cast 
them,  and  there,  it  seems  to  me,  they  ought  to  rest."  Mr.  Flanders,  in  his  able  work 
on  Maritime  Law,  is  inclined  to  doubt  whether  this  decision  should  be  adopted  by  the 
American  courts. 

J  Smith  V.  Wright,  1  Caines,  43;  Lenox  v.  United  Ins.  Co.  3  Johns.  Cas.  178; 
Dodge  V.  Bartol,  5  Greenl.  286;  Cram  v.  Aikin,  13  Maine,  229;  Hampton  y.  Brig 
Thaddeus,  4  Martin,  582 ;  Taunton  Copper  Co.  v.  Merchants'  Ins.  Co.  22  Pick.  108 ; 
Doane  w.  Keating,  12  Leigh,  391.  The  same  rule  prevails,  generally,  upon  the  con- 
tinent. f)rd.  Louis  14,  tit.  Jettisons,  a.  13;  Code  de  Commerce,  a.  232;  Valin, 
vol.  2,  p.  203.  See  also  Abbott  on  Ship.  (8th  Eng.  Ed.)  482,  where  there  is  an  elabo-, 
rate  note  on  this  subject. 


en.  XVII.]  OF   THE   LAW   OF   SHIPPING.  371 

then  the  jettison  of  them  would  seem  to  entitle  the  owner  to  con- 
tribution.^ 

The  repairs  of  a  ship  are  for  the  benefit  of  the  ship  itself.  But 
if  a  ship  be  in  a  damaged  condition,  at  a  port  where  she  cannot 
be  permanently  repaired,  and  receive  there  a  temporary  repair, 
which  enables  her  to  proceed  to  another  port,  where  she  may 
have. a  thorough  repair,  and  thereby  the  voyage  is  saved,  all  of 
the  first  repair,  which  was  of  no  further  use  than  to  make  the 
permanent  repair  possible,  is  to  be  contributed  for  by  ship,  freight, 
and  cargo.2 

If  a  ship  put  into  a  port  for  necessary  repair,  and  receive  it, 
and  the  voyage  is  by  reason  thereof  successfully  prosecuted,  the 
wages  and  provisions  of  the  crew,  from  the  time  of  putting  away 
for  the  port,  thfi  expense  of  loading  and  unloading,  and  every 

1  This  doctrine  does  not  appear  to  be  settled  in  tlie  Ameriean  courts.  But  it  was 
thoroughly  discussed  in  England  in  Milward  v.  Hibbert,  3  Q.  B.  120.  In  that  case, 
pigs  were  shipped  on  deck  from  Waterford,  in  Ireland,  to  London,  in  accordance  with 
a  usage  so  to  do.  They  were  thrown  overboard  for  the  general  safety.  The  owners  of 
the  steamboat  paid  their  proportional  part  of  the  contrilmtion  in  general  average,  and 
brought  an  action  against  their  insurers  to  recover  it.  The  insurers  were  held  liable.  In 
Gould  V.  Oliver,  4  Bingh.  N.  C.  1.34,  it  had  been  held,  that  where  goods  were  carried 
on  deck  with  the  consent  of  the  shipper,  the  ship-owner  was  liable  to  contribute  in  case 
of  jettison,  but  the  doctrine  had' not  been  extended  so  as  to  charge  the  shippers  of  goods 
below  deck.  The  decision  in  Mildward  v.  Hibbert,  did  not  expressly  carry  the  doctrine 
so  far  as  that,  but  the  principles  there  laid  down  would  seem  to  make  goods  shipped  in  ^ 
tiie  hold  chargeable.  The  exception  stated  in  the  text  seems  in  some  cases  to  be 
adopted  in  practice  in  America,  although  not  directly  sanctioned  by  our  courts.  See 
Phillips  on  Ins.  vol.  2,  §  1282,  and  Cram  v.  Aikin,  13  Maine,  229.  Valin,  (vol.  2,  p. 
203,)  says  that  contribution  is  allowed  for  the  jettison  of  goods  on  deck,  in  case  of 
boats  or  other  small  vessels  going  from  port  to  port,  or  in  cases  where  this  mode  of 
stowing  is  sanctioned  by  custom.  But  see  Dodge  v.  Bartol,  5  Greenl.  286,  and  Cram  v. 
Aikin,  13  Maine,  229. 

^  In  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259,  the  vessel  received  repairs  at  Balize,  to 
enable  her  to  complete  her  voyage.  They  were  charged  to  the  general  average.  Put- 
nam, J.,  said  :  "  As  to  the  third  question,  it  is  contended  for  the  defendants  that  the  tem- 
porary repairs  should  be  charged  to  general  average ;  and  we  are  referred  to  Pluramer 
V.  Wildman,  3  Maule  &  Selwyn,  482,  which,  in  several  particulars,  resembles  the  case 
•at  bar.  The  ship  had  been  run  foul  of,  and  so  much  damaged  as  to  make  it  necessary 
to  return  to  her  port  to  repair,  to  enable  her  to  perform  the  voyage,  and  she  was  after- 
wards completely  repaired  at  the  end  of  the  voyage.  The  expenses  of  repairs  whicff 
were  made  abroad,  which  were  strictly  necessary  to  enable  the  ship  to  perform  her 
voyage,  were  placed  to  the  account  of  general  average.  Bayley,  J.,  doubted  whether 
the  repair  of  a  particular  damage  could  be  placed  to  the  account  of  general  average, 
inasmuch  as  it  is  a  benefit  done  to  the  ship.  The  cojirt  considered  these  repairs  only 
under  the  account  of  general  average,  which  were  absolutely  necessary  for  the  enabling 
of  the  ship  to  pursue  her  voyage ;  and  all  beyond  were  to  be  set  down  to  the  account  of 
the  ship.  "  Therefore,  deducting  the  benefit,  if  there  be  any,  which  still  results  to  the 
ship  from  the  repair,  the  rest  may  be  placed  to  the  account  of  general  average."  See 
Padelford  v.  Boardman,  4  Mass.  548,  where  it  was  held  that  repairs  generally  do  not 
go  to  the  account  of  general  average.  Sec  also  Jackson  v.  Charnock,  8  Term,  509. 
In  the  case  of  Plummer  v.  Wildman,  cited  above,  the  injury  on  account  of  which  the 
vessel  was  obliged  to  seek  the  port  of  refuge,  was  itself  the  subject  of  general  average, 
and  that  may  have  influenced  the  decision  under  the  principles  adopted  in  the  English 
cases,  but  in  this  country,  no  distinction  appears  to  rest  upon  that  fact. 


372  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XVIR 

other  necessary  expense  arising  from  this  need  of  repair,  seems, 
by  the  best  authority,  to  be  an  average.  Nor  do  we,  in  this 
country,  refuse  an  average  where  the  repair  was  made  necessary 
by  a  common  sea  peril,  and  allow  one  where  the  repair  was  re- 
quired by  a  voluntary  lossj  as  the  cutting  away  of  a  mast,  or  the 
like.i 

As  to  the  expenses,  wages,  &c.,  during  a  capture,  or  a  deten- 
tion by  embargo,  it  is  not  quite  certain  what  the  rule  is.  We 
should  prefer  to  limit  the  claim  for  contribution  to  those  expenses 
which  were  necessarily,  and  successfully  incurred,  in  saving  or 
liberating  the  property.- 

In  regard  to  the  rules  or  principles  for  estimating  the  contribu- 
tory interests,  —  how,  that  is  to  say,  the  value  of  the  ship,  or  of 

• 

1  The  cases  of  Power  v.  Whitman,  4  M.  &  Selw.  141,  and  of  Plummer  v.  Wildmore, 
3  M.  «&  Selvv.  482,  seem  to  have  left  this  question  in  some  doubt  in  England.  The 
most  satisfactory  rule  which  can  be  deduced  from  them,  appears  to  be  this : — If  the  in- 
jury which  led  the  vessel  to  seek  a  port  of  refuge,  was  itseljf  a  subject  for  general  aver- 
age, then  the  wages  and  provisions  of  the  crew,  and  other  expenses  during  the  deten- 
tion, will  give  a  claim  for  conti'ibution  ;  but  if  the  injury  did  not  give  a  claim  for 
contribution,  the  expenses  and  wages,  and  pi'ovisions  of  the  crew  will  not.  But  see 
3  Kent's  Comm.  235,  where  a  different  rule  is  deduced  from  these  cases.  In  America, 
it  seems  to  be  well  settled,  that  the  wages  and  provisions  of  the  crew,  and  other  ex- 
penses, from  the  time  a  vessel  leaves  its  course  to  seek  a  port  of  refuge,  are  to  be  con- 
tributed for.  Padelford  v.  Boardman,  4  Mass.  548  ;  Walden  v.  Leroy,  2  Caines,  263 ; 
^  Barker  v.  Phoenix  Ins.  Co.  8  Johns.  307;  Dunham  v.  Com.  Ins.  Co.  11  Johns.  315; 
Jones  V.  Ins.  Co.  of  N.  A.  4  Dallas,  246 ;  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259  ; 
Thornton  v.  U.  S.  Ins.  Co.  3  Fairf.  150;  Potter  v.  Ocean  Ins.  Co.  3  Sumn.  27..  But  see 
Weightman  v.  Macadam,  2  Brev.  230  ;  Perry  v.  Ohio  Ins.  Co.  5  Ohio,  306. 

■^  M'Bride  v.  Mar.  Ins.  Co.  7  Johns.  431  ;  Penny  w.  N.  Y.  Ins.  Co.  3  Caines,  155; 
The  doctrine  of  the  text  was  also  sustained,  after  much  discussion,  in  Spafford  v.  Dodge, 
14  Mass.  66.  The  vessel  was  detained  as  a  prize  several  months.  A  contriliution  was 
claimed  for  the  wages  and  provisions  of  the  crew  during  the  detention.  Jackson,  J.,  in 
delivering  the  opinion  of  the  court,  said  :  "  As  to  the  wages  and  provisions  of  the  crew 
during  the  detention,  we  are  unable,  notwithstanding  the  very  respectable  authorities 
cited  in  support  of  this  claim,  to  see  any  ground  upon  which  we  can  allow  it,  consist- 
ently with  the  established  principles  on  this  subject,  and  the  course  of  decisions  in  this 
State.  The  only  case  in  which  the  charge  has  been  allowed,  in  an  account  of  general 
average,  in  our  courts,  was  when  it  was  necessary  to  go  into  port  to  repair  damages . 
sustained  during  the  voyage,  from  the  perils  of  the  sea  ;  and  the  master,  for  that  reason, 
Toluntarily  sought  a  port  to  refit.  Here,  it  is  to  be  observed,  the  delay  was  voluntarily 
incurred  by  the  master;  the  mind  and  agency  of  man  were  employed  in  producing  it ; 
and  tins  circumstance  is  deemed  essential  in  every  case  of  general  average,  in  contradis- 
tinction to  such  unavoidable  detentions  and  losses,  as  arise  from  accident  beyond  the 
control  of  the  master.  We  see  no  ground  of  distinction,  in  this  respect,  between  a 
temporary  detention  occasioned  by  a  hostile  seizure,  and  one  which  is  occasioned  by  an 
embargo,  or  by  a  tempest,  or  other  common  peril  of  the  sea.  .  .  .  The  ship- 
owner might  as  well  claim  a  contribution  for  the  wear  and  tear  of  his  ship  during  the 
detention,  or  the  owner  of  the  cargo  for  the  interest  of  his  money,  for  the  detei'ioration 
of  his  merchandise,  or  for  the  loss  of  a  market  by  the  delay,  as  the  owner  of  the 
freight  for  the  extraordinary  wages  and  provisions  expended  on  such  an  occasion." 
It  seems  difficult  to  resist  the  force  of  this  reasoning.  But  there  are  earlier  cases  in 
which  contrary  decisions  have  been  made.  Ins.  Co.  of  N.  A.  v.  Jones,  2  Binn.  547 ; 
Leavenworth  v.  Delatield,  1  Caines,  573.  See  Walden  v.  Leroy,  2  Am.  Lead.  Cas.  404, 
where  this  question  is  considered  with  care. 


CII.  XVII.]  OF   THE   LAW   OF   SEIPPING.  373 

the  freight,  or  of  the  cargo,  is  to  be  ascertained, — it  is  to  be  regret- 
ted that  we  have  nothing  like  uniformity  in  the  usages  of  different 
parts  of  this  country.  Perhaps  this  cannot  be  determined  in  any 
better  way  than  by  an  arbitrary  rule,  or  estimate ;  but  there  are 
many  such  rules  in  the  law  of  insurance  and  shipping;  and  we 
believe  it  would  be  well  if  the  rules  applied  by  the  courts  in  New 
York,  (which  are  stated  in  our  notes,)  should  be  generally  received. 
If  any  one  place  should  have  the  right  and  authority  of  a  commer- 
cial metropolis,  it  would  seem  to  be  that  where  the  greater  extent 
of  commerce  brings  up  such  questions  most  frequently,  and  where 
the  practical  bearing  of  any  rule  is  likely  to  be  best  illustrated.^ 

1  The  contributory  value  of  the  ship  was  heUl  in  some  cases  to  be  her  value  at  the 
commencement  of  the  voyage,  deducting  one  fifth  for  supposed  deterioration.    Leaven- 
worth V.  Delafield,  1  Caines,  573  ;  Gray  v.  Wain,  2  Serg.  &  R.  229.   But  this  rule  never 
lias  been  adopted  in  Massachusetts.     Spaft'ord  v.  Dodge,  14  Mass.  66 ;  Douglas  v. 
iloody,  9  Mass.  548.    And  it  seems  not  to  have  been  applied  in  a  late  case  in  New 
York.    In  Mutual  Safety  Ins.  Co.  v.  Cargo  of  Ship  George,  8  Law  Eep.  361,  the  value 
at  the  port  of  departure,  deducting  the  actual  wear  and  tear,  was  held  her  contributory 
value.    See  also  Eell  v.  Smith,  2  Johns.  98.     But  in  cases  of  jettison  of  goods,  where  the 
vessel  arrives  in  safety,  the  rule  adopted,  both  in  England  and  generally  in  this  country, 
seems  to  be  to  take  the  value  at  the  end  of  the  voyage.     3  Kent,  243 ;  Abbott  on  Ship. 
(8th  Eng.  ed.)  503.     Where  masts,  sails,  or  cables,  or  other  parts  of  the  equipment  of 
a  ship  are  lost,  one  third  is  deducted  from  the  cost  of  the  new  articles,  and  the  re- 
mainder is  contributed  for.     Strong  v.  Firemen's  Ins.  Co.  1 1  Johns.  323  ;  3  Kent,  243. 
The  freight  pending  contributes,  after  deducting  the  expenses  of  earning  it.     Williams 
V.  London  Ass.  Co.  1  M.  &  S.  318.     But  if  only  pro  rata  freight  is  earned,  that  only 
contrilnites.     Maggrath  v.  Church,  1  Caines,  196;    The  Nathaniel  Hooper,  3  Sumner, 
542.     If  no  freight  is  eventually  earned,  there  is  no  contribution  on  account  of  it. 
Potter  V.  Washington  Ins.  Co.  4  Mason,  298;    Tudor  v.  Macomber,  14  Pick.  34.     In 
Massachusetts,  and  generally  in  the  United  States,  one  third  is  deducted  from  the  gross 
freight  for  seamens'  wages  and  other  expenses.   Bedford  Com.  Ins.  Co.  v.  Parke,  2  Pick. 
I ;  Humphreys  v.  Union  Ins.  Co.  3  Mason,  439,  per  Story,  J.    But  in  New  York,  the  rule 
seems  to  be  to  deduct  two  thirds.     Leavenworth  v.  Delafield,  1   Caines,  873 ;  Heyliger 
>:.  N.  Y.  Firemens'  Ins.  Co.  M  Johns.  85.     If  a  vessel  is  wrecked  and  the  cargo  trans- 
shipped, the  contributory  value  of  the  freiglit  is  the  excess  of  its  amount  over  the  amount 
paid  the  other  vessel.     Searle  ??.  Scovcll,  4  Johns.  Ch.  218;  Dodge  v.  Union  Ins.  Co, 
17  Mass.  471.     The  cargo,  if  the  vessel  arrives  at  the  port  of  destination,  contributes 
its  net  value  at  that  place.     Barnard  v.  Adams,  10  How.  270.     But,  if  a  jettison  takes 
place,  and  the  vessel  returns  to  the  port  of  departure,  or  some  neigliboring  port,  then 
the  invoice  price  is  to  be  taken,  or  tlie  market  value  at  that  place.    Tudor  i\  Macomber, 
14  Pick.  84;    Mutual  Safety  Ins.  Co.  v.  Cargo  of  Ship  George,  8  Law  Rep.  361.     In 
Tudor  V.  Macomber,  a  cargo  of  ice  was  shipped  from  Boston  to  Charleston,  S.  C.    The 
vessel  ran  ashore  on  Cape  Cod,  the  ice  was  thrown  overboard  to  save  her  from  destruc- 
tion, and  the  voyage  was  broken  up.     As  no  freight  was  earned,  no  contribution  was 
made  on  account  of  it.     The  value  of  the  ice  was  taken  as  stated  in  the  bill  of  lading, 
there  being  no  invoice.     Putnam,  J.,  said :  "If  the  goods  had  arrived  at  the  port  of 
destination  in  safety,  the  owner  would  have  realized  the  price  there.     He  suffers  just  so 
much  loss  as  was  caused  by  the  jettison,  wliich  could  be  there  accurately  estimated. 
And  the  freight  would  then  be  brought  into  tlie  contribution.    But  when,  as  in  the  case 
at  bar,  the  voyage  is  broken  up  near  the  port   of  departure,  and  the  vessel  has  not 
adopted  an  intermediate  port  as  and  for  the  port  of  destination,  but  has  returned  home, 
and  tlie  freight  has  not  been  saved  b}'  the  jettison,  the  contribution  to  the  general  aver- 
age loss,  should  be  between  tlie  ship  and  the  cargo,  upon  the  assumed  value  of  the  cargo 
at  the  port  of  departure.     This,  we  think,  furnishes  an  exact  rule;  where.as  the  adopt- 
ing the  value  at  the  port  of  destination  would,  in  such  a  case,  be  uncertain, — depending 
upon  matters  of  opinion  instead  of  matters  of  certainty." 

32 


374  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XVII. 

It  is  the  master's  duty  to  have  an  average  adjustment  made 
at  the  first  port  of  delivery  at  which  he  arrives.  And  an  adjust- 
ment made  there,  and  especially  if  this  be  a  foreign  port,  is  gen- 
erally held  to  be  conclusive  upon  all  parties.'  For  the  purpose 
of  this  rule,  our  States  are  foreign  to  each  other  ;  as  they  are  in- 
deed for  most  purposes  under  the  Law  of  Admiralty,  or  the  Law 
of  Shipping.2  But  a  foreign  adjustment  might  doubtless  be  set 
aside  or  corrected,  for  fraud  or  gross  error ;  and  our  courts  differ 
somewhat  in  the  degree  in  which  they  regard  it  as  conclusive.^ 

It  is  universally  admitted  that  the  master  has  the  right  of  refus- 
ing delivery  of  the  goods,  until  the  contribution  due  from  them 
on  general  average,  is  paid  to  him.  That  is,  he  cannot  hold  the 
whole  cargo,  if  it  belong  to  different  consignees,  until  the  whole 
average  is  paid  ;  but  he  may  hold  all  that  belongs  to  each  con- 
signee, until  all  that  is  due  from  that  consignee  is  paid.^  And  in 
this  country  the  doctrine  has  been  carried  so  far,  that  the  master 
may  retain  property  belonging  to  the  United  States,  until  the 
average  contribution  due  upon  it  has  been  paid.^ 

As  the  purpose  of  average  and  contribution  is  to  divide  the 
loss  proportion  ably  over  all  the  property  saved  by  it,  the  whole 
amount  which  any  one  loses  is  not  made  up  to  him,  but  only 
so  much  as  will  make  his  loss  the  same  per  centage  as  every 
other  party  suffers.  Thus,  if  there  be  four  shippers,  and  each  has 
on  board  $5,000,  and  the  ship  is  worth,  (for  the  purpose  of  the 
adjustment,)  $15,000,  and  the  freight  $5,000,  and  all  the  goods 
of  one  shipper  are  thrown  over  ;  now  the  whole  contributing  in- 

'  Strong  w.  Firemen's  Ins.  Co.  11  Johns.  323;  Simondsv.  White,  2  B.  &  C.  806;  Pe- 
ters V.  Warren  Ins.  Co.  1  Storv,  4G3 ;  Depau  v.  Ocean  Ins.  Co.  5  Cowen,  63 ;  Loring 
V.  Neptune  Ins.  Co.  20  Pick.  4n  ;  Tliornton  v.  U.  S.  Ins.  Co.  3  Fairf.  153.  In  deliver- 
ing tiic  opinion  in  Simonds  v.  Wliite,  Abbott,  C.  J.,  said  :  "  The  shipper  of  goods,  ta- 
citly, if  not  expressly  assents  to  general  average,  as  a  known  maritime  usage,  which 
may,  according  to  the  events  of  the  voyage,  he  either  beneficial  or  disadvantageous  to 
him.  And  by  assenting  to  general  average,  he  must  be  understood  also  to  assent  to  its 
adjustment,  and  to  its  adjustment  at  tlie  usual  and  proper  place;  and  to  all  this  it 
seems  to  us,  to  be  only  an  obvious  consequence  to  add,  that  he  must  be  understood  to 
consent  also  to  its  adjustment  according  to  the  usage  and  law  of  the  place  at  which 
the  adjustment  is  to  be  made." 

^  Lewis  V.  Williams,  1  Hall,  (N.  Y.)  430. 

^  The  extract  above  from  the  opinion  of  Abbott,  C.  J.,  in  Simonds  v.  White,  places 
the  binding  force  of  a  foreign  adjustment  upon  the  implied  contract  to  agree  to  it. 
This  ground  seems  to  be  unobjectionable,  as  it  leaves  the  adjustment  open  to  attacks 
on  account  cither  of  fraud  or  mistake. 

*  United  States  v.  Wilder,  3  Sumner,  308 ;  Chamberlain  v.  Reed,  13  Maine,  357 ; 
Eckford  v.  Wood,  5  Ala.  136;  Simonds  v.  White,  2  B.  &  C.  805;  Scaife  v.  Tobin,  3 
Bar.  &  Ad.  523  ;  Tlie  Hoftnung,  G  Rob.  383. 

^  United  States  v.  Wilder,  supra. 


CII.  XVIT.]  OF   THE    LAW    OP   SUIPPING.  375 

terest  is  $40,000,  and  the  loss  is  one  eighth  of  this.  The  ship- 
per whose  goods  are  jettisoned  therefore  loses  one  eighth  of  his 
goods,  and  the  remaining  seven  eighths  are  made  up  to  him,  by 
each  owner  of  property  saved  giving  up  one  eighth. 

There  are  usually  in  every  commercial  place,  persons  whose 
business  it  is  to  make  up  adjustments.  As  the  losses  usually 
consist  of  many  items,  some  of  which  are  general  average  and 
some  rest  on  the  difll'erent  interests  on  which  they  fell,  and  as  the 
contributory  interests  must  all  be  enumerated,  and  the  value  of 
each  ascertained  according  to  the  general  principles  of  law,  qual- 
ified, perhaps,  by  the  local  law  or  usage  of  the  port,  and  then  the 
average  struck  on  all  these  items,  it  is  obvious  that  this  must  be 
a  calculation  requiring  great  care  and  skill.  And  as  the  adjust- 
ment affects  materially  persons  who  may  not  be  present,  but  spe- 
cially represented,  —  for  all  these  reasons  only  those  who  are 
known  to  be  competent  to  the  work  should  be  employed  to  make 
this  adjustment.  The  name  given  to  such  persons  in  France  is 
depacheur,  and  this  name  is  frequently  used  in  other  countries. 

SECTION  IX. 

OF    THE   NAVIGATION   OF    THE  SHIP. 

1.  Of  the  poivers  and  duties  of  the  master. —  The  master  has 
the  whole  care  and  the  supreme  command  of  his  vessel,  and  his 
duties  are  coequal  with  his  authority.  He  must  see  to  every 
thing  that  respects  her  condition  ;  including  her  repair,  supply, 
loading,  navigation,  and  unloading.  He  is  principally  the  agent 
of  the  owner;  but  is,  to  a  certain  extent,  the  agent  of  the  ship- 
per, and  of  the  insurer,  and  of  all  who  are  interested  in  the  prop- 
erty under  his  charge. 

Much  of  his  authority  as  agent  of  the  owner,  springs  from 
necessity.  He  may  even  sell  the  ship,  in  a  case  of  extreme 
necessity ;  so  he  may  make  a  bottomry  bond  which  shall  pledge 
her  for  a  debt ;  so  he  may  charter  her  for  a  voyage  or  a  term  of 
time  ;  so  he  may  raise  money  for  repairs,  or  incur  a  debt  therefor, 
and  make  his  owners  liable.  All  these,  however,  he  can  do  only 
from  necessity.^     If  the   owner  be  present,  in  person  or  by  his 

1  "  The  autliority  of  the  master  of  a  ship  is  very  large,  and  extends  to  all  acts  that 
are  usual  and  necessary  for  the  use  and  enjoyment  of  the  ship ;  but  is   subject  to 


376  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIL 

agent,  or  is  within  easy  access,  the  master  has  no  power  to  do 
any  of  these  things.  If  he  does  them  in  the  home  port,  the 
owner  is  liable  only  where  by  some  act  or  words  he  ratifies  or 
adopts  the  act  of  his  master.'  If  in  a  foreign  port,  even  if  the 
owner  were  there,  he  may  be  liable  on  his  master's  contracts  of 
this  kind,  to  those  who  neither  knew,  nor  had  the  means  of  know- 
ing that  the  master's  power  was  superseded  or  qualified  by  the 
presence  of  the  owner.^ 

Beyond  the  ordinary  extent  of  his  power,  which  is  limited  to 
the  care  and  navigation  of  the  ship,  he  can  go,  as  we  have  said, 
only  from  necessity.  But  this  necessity  must  be  greater  for 
some  purposes  than  for  others.  Thus  he  can  sell  the  ship  only 
in  a  case  of  extreme  and  urgent  necessity ;  that  is,  only  when  it 
seems  in  all  reason  impossible  to  save  her,  and  a  sale  is  the  only 
way  of  preserving  for  the  owners  or  insurers  any  part  of  her 
value.3     We  say  "seems;"  for  if  such  is  the  appearance  at  the 

several  well-known  limitations.  He  may  make  contracts  for  the  hire  of  the  ship,  but 
cannot  vary  that  which  the  owner  has  made.  He  may  take  np  money  in  foreign  ports, 
and,  under  certain  circumstances,  at  home  for  necessary  disbursements,  and  for  repairs, 
and  bind  the  owner  for  repayment ;  but  his  authority  is  limited  by  the  necessity  of  the 
case,  and  he  cannot  make  them  responsible  for  money  not  actually  necessary  for  those 
purposes,  although  he  may  pretend  that  it  is.  He  may  make  contracts  to  carry  goods 
on  freight,  but  cannot  bind  his  owners  by  a  contract  to  carry  freight  free.  So,  with 
regard  to  goods  put  on  board,  he  may  sign  a  bill  of  lading,  and  acknowledge  the  na- 
ture and  quality,  and  condition  of  the  goods.  Constant  usage  shows  that  masters  have 
that  general  authority  ;  and  if  a  more  limited  one  is  given,  a  party  not  informed  of  it 
is  not  affected  by  such  limitation.  "  The  master  is  a  general  agent  to  perform  all  things 
relating  to  the  usual  employment  of  his  ship  ;  and  the  authority  of  such  an  agent  to 
perform  all  things  usual  in  the  line  of  business  in  ichich  he  is  employed,  cannot  be  limited 
by  any  private  order  or  direction  7iot  known  to  the  party  dealing  with  him."  Smith's 
Merc.  Law,  59.  Per  Jervis,  C.  J.,  in  Grant  v.  Norway,  10  C.  B.  665,  687  ;  2  E.  L.  & 
E.  337.  In  that  case  it  was  held  that  a  master  has  no  autliority  to  sign  a  bill  of  lading 
for  goods  which  had  never  been  shipped.  See  also  Gen.  Int.  Ins.  Co.  v.  Ruggles,  12 
Wheat.  408. 

1  In  The  Schooner  Tribune,  3  Sumner,  144,  the  master  of  a  vessel  made  a  charter- 
party  at  the  home  port.  It  was  held,  under  the  circumstances,  to  be  binding  on  the 
owners.  Story,  J.,  said  :  "  As  to  the  right  to  make  such  a  contract  in  the  home  port  of 
the  owners,  I  agree  that  it  cannot  be  ordinarily  presumed  from  his  character  as  master. 
It  is  not  incident  to  liis  general  authority ;  nor  can  it  be  presumed,  under  such  circum- 
stances, as  an  ordinary  superadded  agency.  But  there  are  peculiar  circumstances, 
however,  in  the  present  case,  which  do  create  some  presumption  of  superadded  agency. 
In  the  first  place,  such  has  been  his  authority  in  the  former  voyages  of  the  vessel ;  and 
such  seems  also  to  have  been  his  authority  under  her  subsequent  employment.  And  I 
think  it  might  fairly  be  presumed,  that  in  tiie  home  port  he  would  scarcely  have  had 
the  rashness  to  make  so  important  and  definitive  a  contract  without  some  authority." 

2  In  Ward  v.  Green,  6  Cow.  173,  it  was  licld,  tliat  the  mere  fact  that  an  owner  was 
on  board  as  supercargo,  did  not  free  him  from  liability  on  contracts  respecting  freight, 
made  by  the  master  in  a  foreign  port.  The  owner  must  show  that  he  alone  attended 
to  the  shipment  of  the  cargo. 

^  Many  cases  h.ave  been  decided  upon  the  question  what  circumstances  will  justify  a 
sale  of  a  ship  by  the  master.  All  the  cases  admit  tliat  it  is  not  sufficient  tliat  the  sale 
was  bond  Jide  and  intended  for  the  benefit  of  all  concerned ;  it  must  have  been  neces- 


en.  XVII.]  OF  THE   LAW   OF   SHIPPING.  377 

time,  when  all  existing  circumstances  are  carefully  considered 
and  weighed,  the  sale  is  not  void  for  want  of  authority,  if  some 
accident,  or  cause  which  could  not  be  anticipated,  as  a  sudden 
change  in  the  wind  or  sea,  enables  the  purchaser  to  save  her 
easily.' 

So  to  pledge  her  by  bottomry;  there  must  be  a  stringent  and 
sufficient  necessity,  but  it  may  be  far  less  than  is  required  to  au- 
thorize a  sale.     It  is  enough  if  the  money  is  really  needed  for 

sary.  We  can  find  no  better  account  of  the  circumstances,  which  will  create  such  a 
necessity  than  the  followiiifj  by  Tlndal,  C.  J.,  in  Somes  v.  Sugrue,  4  Car.  &  Payne, 
276.  "  A  great  deal  has  been  said  about  the  word  nccessiti/.  Undoubtedly,  it  is  not  to 
be  confined  to,  or  so  strictly  taken  as  it  is  in  its  ordinary  acceptation.  There  can,  in 
such  a  case,  be  neither  a  legal  necessity  nor  a  physical  necessity,  and  therefore  it 
must  mean  a  mond  necessity ;  and  the  question  will  be,  whether  the  circumstances 
were  such  that  a  person  of  prudent  and  sound  mind  could  have  no  doubt  as  to  the 
course  he  ought  to  pursue.  The  point  principally  for  consideration  will  be,  the  expen- 
diture necessary  to  put  the  ship  into  a  condition  to  bring  home  her  cargo ;  the  means 
of  performing  the  repairs,  and  the  comparison  between  those  two  things  and  the  sub- 
ject-matter which  was  at  stake  ;  and  it  must  not  be  a  mere  measuring  cast,  not  a  mat- 
ter of  doubt  in  the  mind,  whether  the  expense  would  or  would  not  have  exceeded  the 
value ;  but  it  must  be  so  preponderating  an  excess  of  expense,  that  no  reasonable  man 
could  doubt  as  to  the  propriety  of  selling  under  the  circumstances  instead  of  repairing. 
....  A  captain  has  no  power  to  sell,  except  from  necessity,  considered  as  an  im- 
pulse, acting  morally,  to  excuse  his  departure  from  the  original  duty  cast  upon  him  of 
navigating  and  bringing  back  the  vessel.  If  he  has  no  means  of  getting  the  repairs 
done  in  the  place  where  the  injury  occurs ;  or  if,  being  in  a  place  where  they  might  be 
done,  he  has  no  money  in  his  possession,  and  is  not  able  to  raise  any,  then  he  is  justi- 
fied in  selling,  as  the  best  thing  that  can  be  done."  The  leading  English  cases  in 
which  this  question  has  been  discussed,  are,  Idle  v.  Royal  Exch.  Ass.  Co.  8  Taunt.  755  ; 
Havman  v.  Molton,  5  Esp.  65  ;  Reid  v.  Darby,  10  East,  144  ;  Robertson  v.  Clarke,  1 
Biu^.  445 ;  Read  v.  Bonham,  3  Brod.  &  Bing.  147  ;  Hunter  v.  Parker,  7  M.  &  W.  322  ; 
Ireland  v.  Thompson,  4  C.  B.  149.  The  principal  American  cases  are,  Gordon  v. 
Mass.  F.  &  M.  Ins.  Co.  2  Pick.  249  :  The  Schooner  Tilton,  5  Mason,  465,  475  ;  The 
American  Ins.  Co.  v.  Center,  4  AVend.  45  ;  S.  C.  7  Cow.  564 ;  The  Ship  Fortitude,  3 
Sumner,  254 ;  Patapsco  Ins.  Co.  v.  Soutbgate,  5  Pet.  604  ;  American  Ins.  Co.  v.  Og- 
den,  15  Wend.  532;  Winn  v.  Columbian  Ins.  Co.  12  Pick.  285  ;  Robinson  v.  Common- 
wealth Ins.  Co.  3  Sumner,  220;  The  New  England  Ins.  Co.  v.  The  Sarah  Ann,  13  Pet. 
387.  If  the  circumstances  are  such  as  will  admit  of  delay  to  consult  the  owners,  the 
master  cannot  sell.  The  New  England  Ins.  Co.  v.  The  Brig  Sarah  Ann,  13  Pet.  387  ; 
Tiie  Brig  Sarah  Ann,  2  Sumner,  215;  Scull  v.  Briddle,  2  Wash.  C.  C.  150  ;  Hall  v. 
Franklin  Ins.  Co.  9  Pick.  466  ;  Peircc  r.  Ocean  Ins.  Co.  18  Pick.  83. 

1  The  Brig  Sarah  Ann,  2  Sumner,  215 ;  S.  C.  13  Pet.  387 ;  Fontaine  v.  Phcenix  Ins. 
Co.  11  Johns.  293.  In  the  case  of  The  Brig  Sarah  Ann,  the  vessel  had  run  upon  the 
shore  at  Nantucket.  She  was  stripped  of  her  rigging,  and  then  sold  for  §127.  The 
sale  by  the  master  was  held  to  be  valid,  although  tlie  vessel  was  gotten  oft'  by  the  pur- 
chasers, and  repaired  at  a  cost  considerably  less  than  her  value  when  repaired.  Slon/, 
J.,  said  :  "  The  fact  that  the  brig  was  actually  gotten  off"  by  the  purchasers  after  the 
sale,  is  certainly  a  strong  circumstance  against  the  necessity  of  the  sale.  But  it  is  by 
no  means  decisive;  for  we  are  not,  in  cases  of  this  sort,  to  judge  by  the  event, —  for  a 
vessel  may  be  apparently  in  a  desperate  situation,  and  yet  by  some  lucky  accident,  or 
unexpected  concurrence  of  fortunate  circumstances,  she  may  be  delivered  from  her 
peril.  We  must  look  to  the  state  of  things  as  it  was  at  the  time  of  the  sale  ;  and  weigh 
all  the  circumstances, — the  position  and  exposure  of  the  brig  ;  season  of  the  year  ;  the 
dangers  from  storms  ;  the  expense  of  any  attempts  to  get  her  oft";  the  probable  chances 
of  success  ;  and  the  necessity  of  immediate  action  on  the  part  of  the  master,  one  way 
or  the  other." 

32* 


378  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVU. 

the  safety  of  the  ship,  and  cannot  otherwise  be  raised,  or  not 
without  great  waste.' 

So,  to  charter  the  ship,  there  must  be  a  sufficient  necessity, 
unless  the  master  has  express  power  to  do  this.  But  the  neces- 
sity for  this  act  may  be  only  a  mercantile  necessity  ;  or  in  other 
words,  a  certain  and  considerable  mercantile  expediency.^ 

So,  to  bind  the  owners  to  expense  for  repairs  or  supplies,  there 
must  also  be  a  necessity  for  them.  But  here  it  is  sufficient  if  the 
repairs  or  supplies  are  such  as  the  condition  of  the  vessel,  and 
the  safe  and  comfortable  prosecution  of  the  voyage,  render 
proper.-^  Where  the  master  borrows  money,  and  the  lender  sues 
the  owner,  great  stress  is  sometimes  laid  upon  the  question 
whether  the  captain  was  obliged  to  pay  the  money  down.  But 
we  do  not  see  in  principle  any  great  difference  between  incurring 
a  debt  for  service  or  materials  which  the  owner  must  pay,  or  in- 
curring the  same  debt  for  money  borrowed  and  applied  to  pay 
for  the  service  or  materials.* 

1  The  Ship  Fortitude,  3  Sumn.  228  ;  The  Ship  Virgin,  8  Peters,  538 ;  The  Nelson, 
1  Hagg,  169.  In  The  Ship  Fortitude,  Siori/,  J.,  said:  "In  relation  to  what  are  neces- 
sary repairs  in  the  sense  of  the  law,  for  which  the  master  may  lawfully  bind  the  owner 
of  the  ship,  I  have  not  been  able,  after  a  pretty  thorough  search  into  the  authorities 
and  text  writers,  ancient  and  modern,  to  find  it  anywhere  laid  down  in  direct  or  per- 
emptory terms,  that  they  are  such  repairs,  and  such  repairs  only,  as  are  absolutely 
indispensable  for  the  safety  of  the  ship  or  the  voyage,  —  or  that  there  must  be  an  ex- 
treme necessity,  an  invincible  distress,  or  a  positive  urgent  incapacity,  to  justify  the 

master  in  making  the  repairs But  a  thorough  examination  of  the  common 

text  writers,  ancient  as  well  as  modern,  will,  as  I  think,  satisfactorily  show,  that  they 
have  all  understood  tlic  language  in  a  very  mifigated  sense ;  and  that  necessary  repairs 
mean  such  as  are  reasonably  fit  and  proper  for  the  sliip  under  the  circumstances,  and 
not  merely  such  as  are  absolutely  indispensable  for  the  safety  of  the  ship  or  the  ac- 
complishment of  the  voyage."  To  authorize  the  master  to  give  a  bottomry  bond,  not 
only  must  the  repairs  be  necessary  in  the  sense  of  the  word  taken  in  the  above  extract, 
but  it  must  appear  that  the  funds  for  making  them  could  not  have  been  obtained  on 
the  credit  of  the  owner  alone.  The  Aurora,  1  Wheat.  96  ;  Tlie  Randolph,  Gilpin,  459. 
See  ante,  p.  341,  n.  3,  and  Reade  r.  Com.  Ins.  Co.  3  Johns.  352  ;  Fontaine  v.  Col.  Ins. 
Co.  9  Johns.  29;  Walden  v.  Chamberlain,  3  Wash.  C.  C.  290;  The  Brig  Hunter, 
Ware,  249  ;  The  Packet,  3  Mason,  255;  The  Gratitudine,  3  Rob.  240  ;  The  Hannah, 
Bee,  348. 

2  Hurry  v.  Hurry,  2  Wash.  C.  C.  145;  The  Schooner  Tribune,  3  Sumner,  144; 
Ward  V.  Green,  G  Cowen,  173.  In  Hurry  v.  Hurry,  it  was  held,  that  the  master  has  a 
general  authority  to* charter  a  vessel  in  a  foreign  port,  if  the  owner  has  no  agent  there. 
But  this  must  be  taken  with  the  limitation  tiiat  chartering  the  vessel  would  be  con- 
sistent with  her  usual  course  of  employment. 

3  The  Aurora,  1  AVheat.  102;  Thc'Ship  Fortitude,  3  Sumner,  228,  236;  Milward  v. 
Hallett,  2  Caincs,  77;  Rocher  v.  Busher,  1  Stark.  27;  James  v.  Bixby,  11  Mass.  37. 

*  See  ante,  note  1,  as  to  how  necessary  the  supplies  must  be.  If  necessary,  the 
master  may  borrow  money  for  supplies,  repairs,  or  for  any  other  purpose  connected 
■with  the  navigation  of  the"ship.  In  Beldon  v,  Campbell,  6  I^xch.  886  ;  6  Eng.  L.  &  Eq. 
473,  Pai-lr,  B.,  said :  "  In  this  case  the  point  reserved  for  the  consideration  of  the  court 
was,  whether  the  owner  of  a  vessel  wlio  resided  at  Newport,  was  liable  to  the  plaintiff, 
a  merchant  a"t  Newcastle,  (which  is  within  one  day's  post  of  Newport,)  for  a  sum  of 
money  which  had  been  borrowed  by  the  master  of  the  defendant's  ship  at  Newcastle, 


en.  XVII.]  OF  THE  LAW   OF   SHIPPING.  379 

So  the  master, —  unlike  other  agents,  who  have  generally  no 
power  of  delegation,  —  may  substitute  another  for  himself,  to 
discharge  all  his  duties,  and  possess  all  his  authority,  if  he  is  un- 
able to  discharge  his  own  duties,  and  therefore  the  safety  of  the 
ship  and  property  calls  for  this  substitution.^ 

Generally,  the  master  has  nothing  to  do  with  the  cargo  be- 
tween the  lading  and  the  delivery.  But,  if  the  necessity  arises, 
he  may  sell  the  cargo,  or  a  part  of  it,  at  an  intermediate  port,  if 

for  the  purpose  of  paying  a  debt  contracted  for  towing  a  vessel  by  steam-tug  into  port, 
and  also  for  a  sura  paid  on  Saturday  to  a  master  carpenter,  who  had  been  employed  to 
repair  the  vessel.  Wc  arc  of  opinion  that  a  nonsuit  must  be  entered.  There  is  no 
doubt  of  the  power  of  the  master  bj'  law  (but  some  as  to  what  extent  it  goes)  to  bind 
the  owner.  The  master  is  appointed  for  the  purpose  of  conducting  the  navigation  of 
the  ship  to  a  favoralde  termination,  and  he  has,  as  incident  to  that  employment,  a  right 
to  bind  the  owner  for  all  tliat  is  necessary,  —  that  is  upon  the  legal  maxim  —  quando 
aliquid  maiidutiu;  mandatur  ct  omne  per  quod  pervenitur  ad  illud.  Consequently  the  mas- 
ter has  perfect  authority  to  bind  his  principal,  the  owner,  as  to  all  repairs,  necessary 
for  the  purpose  of  bringing  the  ship  to  her  port  of  destination ;  and  he  has  also  power, 
as  incidental  to  his  appointment,  to  borrow  money,  but  only  in  cases  where  ready 
money  is  necessary, —  that  is  to  say,  when  certain  payments  must  be  made  in  the 
course  of  the  voyage,  and  for  which  ready  money  is  required.  An  instance  of  this  is 
the  payment  of  port  dues,  which  are  required  to  be  paid  in  cash,  or  lights,  or  any  dues 
which  require  immediate  cash  payments.  So  also  in  the  case  referred  to  in  the  course 
of  the  argument,  where,  a  ship  being  at  the  termination  of  one  voyage,  and  about  to 
proceed  on  another,  money  borrowed  to  pay  the  wages  of  seamen,  who  would  not  go 
on  the  second  voyage  witliout  being  paid,  was  considered  necessary.  Robinson  i\  Ly- 
all,  7  Price,  592.  I5ut  these  instances  do  not  apply  when  tlie  owner  of  the  vessel  is  so 
near  the  spot  as  to  be  conveniently  communicated  with.  In  that  case,  before  the  mas- 
ter has  any  right  to  make  the  owner  a  debtor  to  a  third  person,  he  must  consult  him, 
and  see  whether  he  is  willing  to  be  made  a  debtor,  or  whether  he  will  refuse  to  pay  tlic 
money.  It  appears  to  us  that  there  arc  two  objections  to  the  plaintiti's  recovering 
cither  the  one  sum  or  the  other.  With  respect  to  the  money  borrowed  for  the  purpose 
of  paying  the  steam-tug,  it  appears  that  the  vessel  was  off  the  port  of  Newcastle,  which 
was  its  ultimate  port  of  destination,  at  the  time  when  the  assistance  of  the  steam-tug 
was  necessary  in  order  to  tow  the  vessel  into  the  river  Tyne,  and  the  owner  of  the 
steam-tug  did  not  object  to  tow  the  vessel  without  previous  payment.  If  the  owner  of 
the  steam-tug  had  said,  "  I  will  not  tow  you  in  unless  you  will  actually  pay  the  money 
down,"  then  it  would  have  been  necessary  for  the  master  to  have  borrowed  the  money 
for  that  purpose.  It  could  not  be  expected  that  he  would  wait  at  the  mouth  of  the 
harbor,  where  it  would  have  been  impossible  for  him  to  have  communicated  with  the 
owner  at  Newport,  a  great  distance  oif,  in  order  to  ascertain  whether  he  should  bon'ow 
the  money  or  not.  In  this  case,  however,  the  owner  of  the  steam-tug  did  not  make 
any  such  stipulation ;  but  the  vessel  was  towed  into  Newcastle,  and  the  money  was  not 
paid  until  after  several  days  had  elapsed,  during  which  it  Was  perfectly  competent  for  the 
master  to  have  written  to  Newport,  (which  was  only  a  day's  post,  as  it  happened)  and 
got  an  answer  from  the  owner  of  the  vessel.  Instead  of  that,  he  goes,  four  or  five 
days  afterwards,  and  borrows  money  from  the  plaintiff,  for  the  purpose  of  paying  this 
debt  to  the  owner  of  the  steam-tug,  —  a  debt  for  which  the  owner  of  the  vessel  was 
liable,  because  it  was  within  the  province  of  the  master  to  employ  the  steam- vessel. 
We  think  that  under  these  circumstances,  that  the  master  had  no  power  to  borrow 
money  in  order  to  pay  a  debt  for  wliich  the  owner  of  the  vessel  was  already  responsi- 
ble by  the  original  contract,  and  still  less  to  borrow  tliat  money  without  consulting  the 
owner."  It  was  held  in  Arthur  ?■.  Barton,  6  ]\I.  &  W.  138,  and  in  Johns  v.  Simons,  2 
Q.  B.  425,  that,  if  a  master  cannot  communicate  with  the  owner  without  great  delay, 
he  may  borrow,  although  in  a  home  port.  See  also  Selden  v.  Hendrickson,  1  Brock. 
396. 

1  1  Bell's  Coram.  413.  Sec  also  The  Alexander,  1  Dods.  Adm.  278,  where  a  new 
master  was  appointed  by  the. consignees. 


380  ELEMENTS    OF  MERCANTILE   LAW.  [CII.  XVIL 

he  cannot  carry  it  on  or  transmit  it,  and  it  must  perish  before  he 
can  receive  specific  orders.^  So,  he  may  sell  it,  or  a  part,  or 
pledge  (or  hypothecate)  it,  by  means  of  a  respondentia  bond,  in 
order  to  raise  money  for  the  common  benefit.^  A  bond  of 
respondentia  is  much  the  same  thing  as  to  the  cargo,  that  a  bot- 
tomry bond  is  as  to  the  ship.  Money  is  borrowed  by  it,  at  mari- 
time interest,  on  maritime  risk,  the  debt  to  be  discharged  by  a 
loss  of  the  goods.'^  But  it  can  be  made  by  the  master  only  on 
even  a  stronger  necessity  than  that  required  for  bottomry ;  only 
when  he  can  raise  no  money  by  bills  on  the  owner,  nor  by  a 
bottomry  of  the  ship,  nor  by  any  other  use  of  the  property,  or 
credit  of  the  owner.* 


'  Bryant  v.  Commonwealth  Ins.  Co.  13  Pick.  543;  Freeman  v.  East  Ind.  Co.  5  B.  & 
Aid.  619;  Morris  v.  Eobinson,  3  B.  &  C.  196;  Cannan  v.  Meaburn,  1  Bingh,  243; 
Smith  V.  Martin,  6  Binn.  202  ;  Pope  v.  Nickerson,  3  Story,  465 ;  Jordan  v.  Warren  Ins. 
Co.  1  Story,  342;  Saltus  v.  Ocean  Ins.  Co.  12  Johns.  107;  The  Ship  Packet,  3 
Mason,  255;  Dodge  v.  Union  Mar.  Ins.  Co.  17  Mass.  471.  In  Bryant  v.  Common- 
wealth Ins.  Co.  13  Pick.  543,  553,  Putnam,  J.,  said:  "In  American  Ins.  Co.  v.  Center, 
4  Wend.  52,  (Cases  in  Error,)  '  tlie  master  is  not  authorized  to  sell  the  ship  or  cargo, 
except  in  a  case  of  absolute  necessity,  when  he  is  not  in  a  situation  to  consult  with  the 
owner,  and  when  the  preservation  of  the  property  makes  it  necessary  for  him  to  act  as 
agent  for  whom  it  may  concern.' "  Per  the  Chancellor.  Abbott  on  Ship.  (4th  Amcr. 
ed.)  241:  "  Tlic  disposal  of  the  cargo  by  the  master,  is  a  matter  that  requires  the 
utmost  caution  on  his  part.  He  should  always  bear  in  mind  that  it  is  his  duty  to  con- 
vey it  to  the  place  of  destination,  by  every  reasonable  and  practicable  method."  Id. 
243 :  "  Transshipment  for  the  place  of  destination,  if  it  be  practicable,  is  the  first  object, 
because  that  is  in  furtherance  of  the  original  purpose."  ..."  The  merchant  should  be 
consulted,  if  possible.  A  sale  is  the  last  thing  tliat  the  master  should  think  of,  because 
it  can  only  be  justified  by  that  necessity  Avhich  supersedes  all  human  laws.  If  he  sell 
without  necessity,  the  persons  who  buy,  under  such  circumstances,  will  not  acquire  a 
title  as  against  the  merchant,  but  must  answer  to  him  for  the  value  of  the  goods."  The 
learned  editor  remarks,  in  note  1  :  "  When  a  ship  is  driven  out  of  her  course  by  stress 
of  weather,  the  charge  of  the  cargo  devolves  on  the  master,  whose  duty  it  is  to  take 
care  of  it.  In  such  case,  he  has  power  to  sell  goods  which  are  perishable  or  damaged. 
But  he  has  no  right  to  sell  goods,  which  ar.e  in  good  condition  and  not  perishable,  with- 
out tlic  orders  of  the  owners,  to  wliom  he  is  bound  to  give  immediate  information." 
See  ante,  p.  376,  n.  3,  on  sale  of  ship  by  the  master. 

■■^  The  Gratitudine,  3  Bob.  240  ;  Pope  v.  Nickerson,  3  Story,  465  ;  The  Packet,  3 
Mason,  255  ;  The  United  Ins.  Co.  v.  Scott,  1  Johns.  106  ;  Fontaine  v.  Col.  Ins.  Co.  9 
Johns.  29 ;  Searle  v.  Scoveli,  4  Johns.  Ch.  222 ;  Amer.  Ins.  Co.  v.  Coster,  3  Paige,  323 ; 
Boss  V.  Ship  Active,  2  Wash.  C.  C.  226.  It  seems  that,  when  goods  are  sold  by  the 
master,  to  repair  the  vessel,  it  is  to  be  considered  as  in  the  nature  of  a  forced  loan,  for 
which  the  owner  of  the  vessel  is  liable  to  the  shipper,  whether  the  vessel  arrive  or  not. 
Pope  V.  Nickerson,  3  Story,  465. 

8  See  ante,  cases  on  bottomry  bonds.  But  in  Franklin  Ins.  Co.  v.  Lord,  4  Mason, 
248,  the  respondentia  bond  was  for  $10,000,  and  it  contained  a  clause  that  the  vessel 
was  to  have  goods  to  that  amount  on  board.  The  vessel  was  lost,  with  only  $9,000 
worth  of  goods  on  board.  Held,  that  the  lenders  could  recover  the  difference  between 
the  amount  lent  and  the  amount  on  board. 

*  The  Gratitudine,  3  Rob.  240 ;  Boss  v.  The  Ship  Active,  2  Wash.  C  C.  226 ;  The 
Packet,  3  Mason,  255  ;  Ilussey  v.  Christie,  13  Ves.  599  ;  U.  S.  Ins.  Co.  v.  Scott,  I 
Johns.  106.  In  the  case  of  The  Gratitudine,  this  right  of  the  master,  in  a  case  of  neces- 
sity, to  give  a  respondentia  bond,  was  thoroughly  considered,  in  the  light  both  of  prin- 
ciple and  authority,  and  the  right  was  firmly  established. 


en.  XVII.]  OP   THE   LAW   OF   SIIIPPINO.  381 

The  general  remark  may  be  made,  that  a  master  has  no  ordi- 
nary power,  and  can  hardly  derive  any  extraordinary  power  even 
from  any  necessity,  except  for  those  things  which  are  fairly  within 
the  scope  of  his  business  as  master,  and  during  his  employment 
as  master.  Beyond  this,  he  has  no  agency  or  authority  that  is 
not  expressly  given  him.^ 

•  The  master  has  a  lien  on  the  freight  for  his  disbursements  and 
charges  for  the  owner.^  The  extent  of  this  lien  is  not  quite  cer- 
tain on  the  authorities.  But  in  this  country,  we  think,  it  secures 
the  whole  amount  due  to  him,  for  wages,  primage,  or  disburse- 
ments.3  And  that  he  may  hold  the  cargo  even  from  the  con- 
signor or  shipper,  until  his  lien  is  discharged. 

The  owner  is  liable  also  for  the  wrong  doings  of  the  master.* 
But,  we  think,  with  the  limitation  which  belongs  generally  to  the 
liability  of  a  principal  for  the  torts  of  his  agent,  or  of  a  master 
for  the  torts  of  his  servant.  That  is,  he  is  liable  for  any  injury 
done  by  the  master,  while  acting  as  master.  But  not  for  tljjp 
wrongful  acts  which  he  may  do  personally,  when  he  is  not  acting 
in  his  capacity  of  master,  although  he  holds  the  office  at  the 
time.  Thus,  if,  through  want  of  skill  or  care,  while  navigating 
the  ship,  he  runs  another  down,  the  owner  is  liable  for  the  coUis- 

1  The  master  cannot  settle  claims  against  a  vessel,  which  do  not  accrue  while  he  is 
master.  Kelley  v.  Merrill,  14  Maine,  228.  Or  purchase  a  cargo,  unless  he  has  received 
some  authority  beyond  that  implied  by  his  appointment  as  master.  Hewett  v.  Buck, 
17  Maine,  153  ;  Lyman  v.  Kcdman,  23  Maine,  289.  But,  if  so  appointed,  he  may  be 
the  agent  of  the  owners,  both  to  buy  and  sell  cargoes.  Peters  v.  Ballistier,  3  Pick.  495. 
See  also  Mervin  v.  Shailcr,  16  Conn.  489. 

^  Ingersoll  v.  Bokkelin,  7  Cow.  670,  S.  C  5  Wend.  315  ;  The  Ship  Packet,  3  Mason, 
255;  Richardson  v.  Whiting,  18  Pick.  530;  Lewis  v.  Hancock,  11  Mass.  72;  The  Brig 
Spartan,  Ware,  149  ;  Shaw  v.  Gookin,  7  N.  H.  19;  The  Ship  New  Jersey,  Pet.  Adm. 
223;  The  Sloop  Rainbow,  Bee's  Adm.  116.  In  England,  it  is  now  held  that  the 
master  has  no  lien  on  the  freight  for  necessary  disbursements.  Smith  v.  Plummer,  1 
B.  &  Aid.  575.  But  see  White  v.  Baring,  4  Esp.  22,  and  Hussey  r.  Christie,  9  East, 
426.  Whether  the  master  has  a  lien  on  the  ship  as  well  as  on  the  freight,  is  not  quite 
settled.  It  was  favored  in  The  Ship  Packet,  3  Mason,  225,  per  Stori/,  J. ;  in  The  Ship 
New  Jersey,  1  Pet.  Adm.  227;  The  Sloop  Rainbow,  Bee's  Adm.  116. 

3  In  The  Brig  Spartan,  Ware,  149,  it  was  held  that  the  master  had  a  lien  on  the 
ship  for  his  wages,  as  well  as  for  necessary  disbursements.  And  in  Richardson  v. 
Whiting,  18  Pick.  530,  Putnam,  J.,  said,  that  the  able  judge  of  the  United  States  Court 
of  that  district  of  Massachusetts,  had  extended  the  lien  on  freight  to  the  wages  of  the 
master.  But  in  the  case  of  The  Grand  Turk,  1  Paine,  C.  C.  73,  and  in  Fisher  v.  Wil- 
ling, 8  Serg.  &  R.  118,  it  was  held  that  the  master  had  no  lien  on  the  ship  for  his 
wages.  And  in  Ingersoll  v.  Van  Bokkelin,  7  Cow.  670,  it  was  helcT  that  he  had  no  lien 
whatever  for  his  wages,  his  contract  to  serve  as  master  giving  only  a  claim  upon  the 
owner  personally. 

*  Dusar  v.  Margatroyd,  1  Wash.  C.  C  13  ;  Stone  v.  Ketland,  1  Wash.  C.  C.  142; 
Bussy  V.  Donaldson,  4  Dall.  206 ;  Manro  v.  Almeida,  10  Wheat.  473  ;  Dean  v.  Angus, 
Bee's  Adm.  369  ;  The  Karasan,  5  Rob.  291 ;  Nostra  Signora  de  los  Dolores,  1  Dobson, 
290 ;  The  Mary,  1  Mason,  365. 


382  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XVII. 

ion.^  But  not,  if  the  master,  when  on  shore,  or  even  on  his  own  < 
deck,  quarrels  with  a  man,  and  beats  him.^  Nor  is  the  owner 
liable  if  the  master  embezzles  goods  which  he  takes  on  board  to 
fill  his  own  privilege,  he  to  have  all  the  freight  and  profit.^  Nor 
for  injury  to,  or  embezzlement  of,  goods  put  clandestinely  on 
board,  when  the  owner  is  on  board  and  attending  to  the  lading 
of  the  ship,  and  the  shipper  of  the  goods  knows  this,  or  has 
notice  enough  to  put  him  on  his  guard.* 

1  The  Thames,  5  Eob.  345  ;  The  Woodrop  Sims,  2  Dodson,  83. 

2  The  Druid,  1  W.  Rob.  391,  6  Jurist,  144  ;  The  Richmond  Turnpike  Co.  v.  Van- 
derbilt,  Mlill,  4S0,  S.  C.  2  Comst.  479  ;  The  Dias  v.  The  Privateer  Revenge,  3  Wash. 
C.  C.  262  ;  Ralston  v.  Tlie  States  Rights,  Crabbe,  22;  1  Parsons  on  Cont.  87,  and 
note.  In  the  case  of  Tlie  Druid,  a  Danish  vessel  was  passing  out  of  the  port  of  Liver- 
pool, when  she  was  wilfully  injured  by  the  master  of  a  steam-tug,  who  towed  her  about 
in  a  violent  manner,  and  carried  her  out  of  her  course,  in  consequence  of  which  she 
received  considerable  damage.  It  was  held  that  the  owners  of  the  steam-tug  were  not 
liable.  But  Dr.  Lusliingion,  m  so  deciding,  commented  forcibly  upon  the  hai'dship  of 
the  rule  wliich  exonerates  the  owners  in  such  cases,  saying :  "  The  general  principle  of 
law,  that  the  master  is  liable  for  the  acts  done  by  his  servants  in  the  scope  of  their 
employment,  is  not  denied,  but  it  is  contended,  on  behalf  of  the  owners  of  The  Druid, 
tlrat  the  principle  does  not  apply  to  this  case,  and  that  no  such  liability  exists  where 
the  servant,  though  occupied  in  the  affairs  of  his  master  generally,  has  occasioned  an 
injury  by  his  violent,  wilful,  and  malicious  conduct.  The  justness  of  the  reasoning 
upon  w^hich  this  distinction  is  founded,  is,  I  must  confess,  not  altogether  apparent  to 
my  mind ;  and  if  I  had  been  called  upon  to  decide  this  question  upon  my  own  judg- 
ment alone,  in  the  absence  of  any  decided  cases,  I  might,  perhaps,  have  felt  some  diffi- 
culty in  arriving  at  the  conclusion  to  which  I  am  about  to  come  in  the  present  instance. 
It  is  consistent  with  reasoji  and  natural  justice,  that  a  master  should  be  responsible  for 
the  skill  and  lionesty  of  the  agent  whom  he  employs  in  the  management  of  his  busi- 
ness. He  selects  him,  and  holds  him  out  to  the  world  as  a  fit  person  to  be  trusted  ; 
and  in  so  doing,  to  a  certain  extent,  he  may  be  said  to  contract  with  the  person  with 
whom  he  deals  for  the  existence  of  these  qualities  in  his  agent.  Unless,  therefore,  the 
principal  was  responsible,  mankind  would  have  no  securit}'  or  protection  in  the  ordi- 
nary transaction  of  tlicir  affairs."  But,  notwithstanding  his  objections  to  the  rule,  he 
felt  bound,  by  the  decided  ea.ses,  to  abide  by  it. 

3  King  V.  Lenox,  19  Johns.  235  ;  Boucher  v.  Lamson,  Cas.  Temp.  Hardwicke,  85. 
See  following  note. 

*  Walter  v.  Brewer,  11  Mass.  99;  Reynolds  v.  Toppan,  15  Mass.  370;  Ward  v. 
Green,  6  Cowen,  173.  The  cases  cited  in  this  note  and  the  preceding,  were  decided  on 
the  ground  tliat  the  master  was  not  authorized  to  contract  to  carry  the  goods  which 
were  lost,  and  hence,  that  the  owner  was  not  liable  for  the  breach  of  the  contract.  In 
Walter  v.  Brewer,  the  owner  was  with  his  vessel  at  Monte  Video,  for  the  purpose  of 
taking  a  cargo  for  himself,  and  not  intending  to  take  freight  for  others.  The  master, 
without  the  knowledge  of  the  owner,  took  on  Ijoard  a  few  bales  of  Neutra  skins,  to  carry 
to  Boston.  It  was  in  evidence  that  the  bales  would  not  more  than  fill  the  '  privilege,' 
which  tlie  masters  of  vessels,  in  a  case  like  that,  were  accustomed  to  have.  The  judge, 
at  Nisi  Prius,  instructed  the  jury,  "  That,  although  the  owners  of  ships  were  generally 
liable  for  the  contracts  of  their  masters  abroad,  touching  tlie  ship  on  the  voyage,  yet, 
as  the  owner,  in  this  instance,  had  himself  gone  in  the  ship,  for  the  jnirpose  of  procuring 
a  cargo,  and  as  tlie  ^lip  was  not  put  up  for  freight,  and  as  the  defendant  was  not  con- 
sulted respecting  this  shipment,  nor  the  persons  who  attended  to  his  business  in  his 
absence,  but  they  were  taken  on  board  without  his  knowledge,  he  was  not  accountable 
originally  for  tiie  safe  transportation  and  delivery  of  the  goods  ;  but  if  tlie  jury  believed 
that  tlie  defendant  knew,  before  his  ship  sailed  from  Monte  Video,  that  tiicsc  bales  had 
been  taken  on  board  by  the  master,  he  must  be  considered  as  having  adopteil  the  act 
of  the  master,  and  as  having  consented  thereto,  and  so  would  be  accountable."  These 
instructions  were  held  to  be  correct,  with  the  exception  that  it  was  not  sufficient  to 


en.  xvri.]  OF  the  laav  of  shipping.  383 

The  general  rule  in  this  country,  in  respect  to  collision,  should 
perhaps  be  stated  here.  It  is,  that,  if  both  parties  be  equally  in 
fault,  the  loss  is  apportioned;'  if  neither  party  be  in  fault,  the 
loss  rests  where  it  falls.-  But  if  the  fault  be  wholly,  or  substan- 
tially, on  the  one  side,  the  other  can  recover  full  compensation.-'^ 
There  are  certain  rules  in  regard  to  sailing ;  as,  that  the  ship  that 
has  a  fair  or  leading  wind  shall  give  way  to  one  on  a  wind,  or 
go  under  her  stern,  and  that  steamers  shall  give  way  to  sailing 

charge  the  owner  tliat  he  knew  that  the  goods  were  taken  on  board,  but  that  he  must 
have  '"knowledge  tliat  the  goods  were  received  on  board  upon  freight." 

1  The  Woodrop  Sims,  2  Dodson,  83  ;  Hay  i-.Lc  Neve,  2  Shaw,  Scotch  App.  Cas.3G5; 
The  Scioto,  Daveis,  359  ;  Lenox  f.  Winisimmet  Co.  1  Law  Rep.  (N.  S.)  80 ;  Rogers  v. 
The  Rival,  9  Law  Rep.  28.  In  Ralston  v.  State  Rights,  Crabbe,  22,  it  was  held  that 
the  rule,  that,  where  both  parties  arc  in  fault,  the  damages  must  be  shared,  applies  only 
to  cases  where  both  parties  are  in  fault  in  the  acts  which  produced  the  collision,  and 
where  the  faults  are  not  egregiously  unequal.  In  Rogers  v.  The  Rival,  the  costs  were 
thrown  upon  the  party  more  in  fault,  altliough  the  loss  was  divided.  In  the  courts  of 
common  law,  if  both  parties  are  in  fault,  the  loss  rests  where  it  falls.  Veunall  v. 
Garner,  1  Crompt.  &  Mees.  21 ;  Rathbun  v.  Payne,  19  Wend.  399  ;  Barnes  v.  Cole.  21 
Wend.  188  ;  Simpson  r.  Hand,  6  Whart.  311 ;  "Kelly  v.  Cunningham,  1  Cal.  36,5.  But 
if  there  were  gross  negligence  on  one  side,  the  other  party  might  recover,  notwith- 
standing slight  negligence  on  his  part.  Rathbun  r.  Payne,  19  Wend.  399 ;  Innis  v. 
The  Steamer  Senator,  1  Cal.  459.  See  1  Parsons  on  Cont.  702,  where  numerous  cases 
upon  this  point  are  cited. 

-  Stainback  v.  Rae,  14  How.  532;  The  Woodrop  Sims,  2  Dodson,  83;  The  Shannon, 
1  W.  Rob.  463.  In  Stainback  v.  Rae,  Mr.  Justice  Nelson  said  :  "  We  are  of  opinion, 
therefore,  that  the  collision  was  the  result  of  an  inevitable  accident,  arising  out  of  one 
of  the  perils  of  navigation,  and,  in  judgment  of  law,  is  not  attributable  to  the  fault  of 
either  party.  And  in  such  eases,  the  settled  rule  in  admiralty  in  England  is,  that  each 
vessel  must  bear  its  own  loss,  which  rule  has  been  heretofore  recognized  by  this  court, 
but  has  not  been  directly  applied."  The  Woodrop  Sims,  2  Dodson's  Adm.  R.  83 ; 
Smith  r.  Condry,  1  How.  28;  Strout  v.  Foster,  id.  89;  3  Kent's  Com.  231;  Abbott  on 
Shipping,  pt.  3,'c.  1,  and  pt.  4,  c.  10,  §  10;  2  Brown's  Civ.  and  Adm.  Law,  204-207;  5 
How.  503  ;  and  other  cases.  The  rule  is  not  uniform  upon  the  continent,  as  several  of 
the  maritime  States,  in  such  cases,  apportion  the  loss  between  the  two  vessels.  Abbott, 
224,  230;  2  Brown's  Civ.  and  Adm.  Law,  204-206  ;  3  Kent's  Com.  230,  231,  232.  But 
we  think  it  more  just  and  equitable,  and  more  consistent  with  sound  principles,  that, 
where  the  loss  happens  from  a  collision  which  is  the  result  of  inevitable  accident, 
without  the  negligence  or  fault  of  either  party,  each  should  bear  his  own.  There  seems 
no  good  reason  for  charging  one  of  the  vessels  with  a  share  of  a  loss  resulting  from  a 
common  calamity,  beyond  that  happening  to  herself,  when  she  is  without  fault,  and 
therefore  in  no  just  sense  responsible  for  it." 

^  In  the  Woodrop  Sims,  2  Dodson,  83,  a  case  of  collision,  Sir  W.  Scott  said :  "  There 
are  four  possibilities  under  which  an  accident  of  this  sort  may  occur.  In  the  first  place, 
it  may  happen  without  blame  being  imputable  to  either  party ;  as,  where  the  loss  is 
occasioned  by  a  storm,  or  any  other  vis  nuijor.  In  that  case,  the  misfortune  must  be 
borne  by  the  party  on  whom  it  happens  to  light ;  the  other  not  being  responsible  to 
him  in  any  degree.  Secondly,  a  misfortune  of  this  kind  may  arise  when  both  parties 
are  to  blame;  when  there  has  been  a  want  of  due  diligence,  or  of  skill,  on  both  sides. 
In  such  a  case,  the  rule  of  law  is,  that  the  loss  must  be  apportioned  between  them,  as 
having  been  occasioned  by  the  fault  of  both  of  them.  Thirdly,  it  ma}'  happen  by  the 
misconduct  of  the  suffering  party  only;  and  then  the  rule  is,  that  the  sutterer  must 
bear  his  own  burden.  Lastly,  it  ma.y  have  been  the  fault  of  the  ship  which  ran  the 
other  down  ;  and  in  this  case,  the  injured  party  would  be  entitled  to  an  entire  compen- 
sation from  the  other.'" 


384  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVn. 

ships  ;^  and  that  vessels  in  tide  ways,  or  otherwise  in  danger  of 
collision,  should  hang  out  lights,^ — these  should  all  be  observed, 

1  In  St.  John  v.  Paine,  10  How.  557,  581,  Mr.  Justice  Nelson  laid  down  the  rules  as 
follows  :  "A  vessel  that  has  the  wind  free,  or  sailing  before  or  with  the  wind,  must  get 
out  of  the  way  of  the  vessel  that  is  close  hauled,  or  sailing  by  or  against  it ;  and  the 
vessel  on  the  starboard  tack  has  a  right  to  keep  her  course,  and  the  one  on  the  larboard 
tack  must  give  way,  or  be  answerable  for  tlie  consequences.  So,  when  two  vessels  arc 
approaching  each  other,  both  having  the  wind  free,  and  consequently  the  power  of 
readily  controlling  tlicir  movements,  the  vessel  on  the  larboard  tack  must  give  way, 
and  each  pass  to  the  right.  The  same  rule  governs  vessels  sailing  on  the  wind,  and 
approaching  each  other,  when  it  is  doubtful  which  is  to  the  windward.  But  if  the 
vessel  on  the  larboard  tack  is  so  far  to  windward  that,  if  both  persist  on  their  course, 
the  other  will  strike  her  on  the  lee  side,  abaft  the  beam,  or  near  the  stern,  in  that  case, 
the  vessel  on  the  starboard  tack  should  give  way,  as  she  can  do  so  with  greater  facility, 
and  less  loss  of  time  and  distance,  than  the  other.  Again,  when  vessels  are  crossing 
each  other  in  opposite  directions,  and  there  is  the  least  doubt  of  their  going  clear,  the 
vessel  on  the  starboard  tack  should  persevere  on  her  course,  while  that  on  the  larboard 
tack  should  bear  up,  or  keep  away  before  the  wind."  The  Friends,  1  W.  Rob.  483: 
The  Traveller,  2  W.  Rob.  197;  The  Ann  and  Mary,  id.  189;  The  Chester,  3  Hagg'. 
316;  The  Jupiter,  id.  320;  The  Celt,  id.  327 ;  The  Woodrop  Sims,  2  Dodson,  86; 
The  Thames,  5  Rob.  345 ;  3  Carr.  &  Payne,  528 ;  9  id.  601 ;  12  Moore,  148 ;  3  Kent's 
Comm.  230.  .  .  "  Steam-vessels  are  regarded  in  the  light  of  vessels  navigating  with  a 
fair  wind,  and  are  always  under  obligations  to  do  whatever  a  sailing  vessel,  going  free 
or  with  a  fair  wind,  would  be  required  to  do  under  similar  circumstances.  Their  obli- 
gation extends  still  further,  because  they  possess  a  power  to  avoid  the  collision,  not 
belonging  to  sailing  vessels,  even  with  a  free  wind,  the  master  having  the  steamer  under 
his  command,  both  by  altering  the  helm  and  by  stopping  the  engines.  .  .  .  As  a  gen- 
eral rule,  therefore,  when  meeting  a  sailing  vessel,  whether  close-hauled  or  with  the 
wind  free,  the  latter  has  a  right  to  keep  her  course,  and  it  is  the  duty  of  the  steamer  to 
adopt  such  precautions  as  will  avoid  her."  The  Osprey,  17  Law  Rep.  (7  N.  S.)  384 : 
The  Leopard,  Daveis,  193;  The  Northern  Indiana,  16  Law  Rep.  (6  N.  S.)  433  ;  New- 
ton V.  Stebbings,  10  How.  586.  The  English  rules  appear  to  have  differed  from  the 
above  in  that  a  sailing  vessel,  with  a  free  wind,  was  put  upon  the  same  footing  with  a 
steamer,  and  tliat,  in  case  two  sailing  vessels  have  the  wind  free,  both  must  put  their 
helms  to  port ;  while  under  the  rules  laid  down  above,  a  steamer  has  the  duty  of  avoid- 
ing a  sailing  vessel  in  all  cases,  although  the  latter  have  the  wind  free,  and  if  two  sail- 
ing vessels  have  the  wind  free,  the  one  on  the  larboard  tack  must  give  way  to  the  other. 
The  Gazelle,  2  W.  Rob.  517;  The  City  of  London,  4  Notes  of  Cas.  40,  5  Eng.  Adm. 
Rep.;  The  George,  5  Notes  of  Cases,  368  ;  The  Birkenhead,  3  W.  Rob.  75.  But  the 
Merchant  Shipping  Act  of  17  &  18  Vict,  contains  regulations  Avhich  modify  in  some 
respect  these  rules.     See  8  Law  Rep.  N.  S.  181.  where  this  subject  is  considered. 

-  The  Iron  Duke,  2  W.  Rob.  377;  The  Rose,  2  W.  Rob.  4;  The  Scioto,  Daveis, 
359;  Lenox  v.  Winisimmct  Co.  1  Law  Rep.  N.  S.  80;  Carsley  v.  White,  21  Pick! 
254  ;  Simpson  v.  Hart,  6  Whart.  324 ;  Bark  Delaware  v.  Steamer  Osprey,  2  Wallace, 
Jr.  26§;  Kelly  v.  Cunningham,  1  Cal.  365  ;  Innis  v.  The  Steamer  Senator,  1  Cal.  459. 
In  Carsley  v.  White,  Morion,  J.,  in  delivering  the  opinion  of  the  court,  said  :  "  We 
know  of  no  positive  rule  or  usage  requiring  the  master,  always,  in  the  night  time,  to  ' 
keep  a  light  exhilnted  on  his  vessel,  and  operating  like  the  rule  in  the  laws  of  Oleron 
or  of  Wi"'huy,  which  made  it  the  duty  of  the  master,  always,  when  in  port,  to  keep  a 
buoy  to  liis  anchor,  and  rendered  him  liable  for  all  damage  caused  by  his  neglect  to  do 
it."  Laws  of  Oleron,  art.  14;  Laws  of  Wisbuy,  art.  28,  51.  See  1  Peter's  Adm.  Ap- 
pendix, 28,  78,  85.  "  Whether  common  prudence  required  of  the  plaintift's  to  have  a 
light,  and  the  omission  to  have  it  amounted  to  negligence,  must  depend  upon  the  dark- 
ness of  the  night,  the  number  and  the  situation  of  the  vessels  in  the  harbor,  and  all  the 
other  circumstances  connected  with  tlie  transaction.  This  is  a  question  of  fact,  within 
the  province  of  the  jury."  In  The  Scioto,  Ware,  J.,  after  an  examination  of  the  author- 
ities, said:  "On  these  authorities,  as  well  as  the  obvious  reason  of  the  thing,  I  feel 
justified  in  stating  that  a  vessel,  lying  in  the  channel  of  this  port,  (Portland,  Maine,) 
(and  by  the  channel  I  mean  that  part  of  the  water  wliich  is  traversed  by  vessels  coming 
into  the  harbor,  whether  they  can  lay  their  course  in,  or  are  under  the  necessity  of 
beating  in,)  is  bound  to  show  a  liglit  in  the  night-time,  whether  the  night  is  obscured 
by  clouds,  or  it  is  starlight,  provided  there  be  no  moon  " 


CII.  XVIT.]  OF   THE    LAW    OF   SHIPPING.  385 

and  neglect  of  them  would  go  far  to  imply  want  of  care  or  skill. 
But  none  of  these  rules  are  positive,  and  binding  with  the  force 
of  law. 

For  any  misdeed  of  the  master,  for  which  the  owner  is  liable, 
this  liability  is  limited  in  our  own  country  as  well  as  in  many 
others,  and  also  in  one  or  two  of  our  own  States,  to  the  value  of 
the  ship  and  freight.^ 


SECTION  X. 

OF    THE    SEAMEX. 

The  law  makes  no  important  distinction  between  the  officers, 
or  mates,  as  they  are  usually  called,  and  the  common  sailors.^ 
Our  statutes  contain  many  provisions  in  behalf  of  the  seamen, 
and  in  regulation  of  their  rights  and  duties,  although  the  con- 
tract between  them  and  the  ship-owner  is  in  general  one  of  hiring 
and  service.-^     Our  statutory  provisions  relate  principally  to  the 

1  Rev.  Stats,  of  Mass.  c.  32,  §  1  ;  Eev.  Stats,  of  Maine,  c.  47,  §  8.  Few  questions 
api)ear  to  have  been  brought  before  the  courts  under  these  statutes.  See  Pope  v.  Kick- 
crson,  3  Story,  465;  Stlnson  r.  Wyman,  Daveis,  172.  In  the  hitter  case,  it  was  inti- 
mated that,  in  case  of  loss  from  the  ne<;ligence  of  the  master,  the  owner  may  relieve 
himself  from  responsibility  by  abandoning  the  vessel.  This  would  seem  to  be  doubt- 
ful. Sec,  also,  the  act  of  Congress  of  March  3,  1851,  which  limits  the  liability  of  ship- 
owners, and  the  case  of  Wattson  v.  Marks,  2  Am.  Law  Register,  157. 

-  Sec  Grant  v.  Baily,  12  Mod.  440;  S.  C.  Viner's  Ab.  tit.  Mariners,  B.  2,  where  it 
is  said  of  the  mate :  "  The  court  inclined  to  consider  him  as  a  mariner,  because  he  is 
liired  by  the  master,  as  other  mariners  ;  but  the  master  is  put  in  by  the  owners."  See, 
also,  the  case  of  The  E.xeter,  2  Rob.  Ad.  261,  where  Lord  Sloiretl  laid  it  down  that 
officers  come  before  the  courts  of  admiralty  with  as  strong  a  title  to  indulgence  and 
favorable  attention  as  common  mariners.  It  was  said,  likewise,  by  C.  J.  Rider,  in 
Mills  r.  Long,  1  Sayer,  136,  and  repeated  by  Sir  J.  Nicholl,  in  The  Prince  George,  3 
Hagg.  379,  that  the  privilege  of  siring  for  wages  in  admiralty,  extends  "  to  every  person 
employed  on  board  ship  except  the  master."'  Thus  it  has  been  held  tliat  the  purser 
has  tliat  jirivilege.  The  Prince  George,  supra.  And  so  with  the  surgeon.  Mills  v. 
Long,  supra;  The  New  Jersey,  1  Pets.  Ad.  230,  233;  Trainer  v.  Superior,  Gilp.  514: 
Packard  v.  Louisa,  2  Wood.  &"Min.  53  ;  The  Carpenter  ;  The  Lord  Hobart,  2  Dods.  I04'. 
The  Boatswain;  Ragg  v.  King,  2  Stra.  858.  The  pilot,  engineer,  and  fireman  on  board  a 
steamboat.  Wilson  v.  The  Ohio,  1  Gilp.  505  ;  Packard  i\  Louisa,  supra.  And  a  woman 
who  acted  as  cook  and  steward,  and  as  a  mariner.  The  Jane  and  IMatilda,  1  Hagg.  187. 
But  not  musicians  on  board  a  vessel,  who  are  hired  and  employed  merely  as  such. 
Trainer  r.  The  Superior,  supra.        # 

.  3  Wilkinson  i;.  I>azier,  4Espin.  182;  Pitman  ?'.  Hooper,  3  Sumn.  59;  Farral  v. 
McClea,  1  Dall.  393  ;  Bishop  v.  Shepherd,  23  Pick.  495  ;  Smith  i'.  Leard,  Hopkins, 
199.  The  personal  liability  of  the  master  to  the  seamen  for  wages  being  founded  on 
contract,  if  he  did  not  make  the  original  contract,  but  merely  succeeded  to  the  place  of 
master  in  tlie  course  of  the  voyage,  by  reason  of  the  death  or  removal  of  the  former 
master,  he  is  not  liable  for  the  wages  antecedeiuly  earned,  but  only  for  those  earned 
while  he  is  master.  AVyshain  i\  Rossen,  11  Johns.  72;  Mayo  v.  Harding,  6  Mass. 
300.     The  contract  is  still  con.sidered  a  contract  to  hire,  and  not  a  contract  of  partner- 

33 


386  ELEMENTS    OF    MERCANTILE    LAW.  [CH.  XVII. 

following  points  :  1st,  the  shipping  articles  ;  2(1,  wages;  Sd,  pro- 
visions and  subsistence  ;  4th5  the  sea-worthiness  of  the  ship  ; 
5th,  the  care  of  seamen  in  sickness ;  6th,  the  bringing  them  home- 
from  abroad  ;  7th,  regulation  of  punishment. 

First.  Every  master  of  a  vessel  is  bound  to  have  shipping  arti- 
cles, which  articles  every  seaman  on  board  must  sign,  and  they 
must  describe  accurately  the  voyage,  and  the  terms  on  which  each 
seaman  ships.^     Courts  will  protect  seamen  against  indefinite  or 

ship  in  the  fisheries,  wlicrc,  hy  a  usage  of  the  trade,  the  crew  generally  ship  for  a  speci- 
fic share  of  the  oil  or  fish,  in  lieu  of  wages.  Baxter  v.  Rodman,  3  Pick.  435  ;  Grozier  v. 
Atwood,  4  ib.  234;  Bishop  y.  Shepherd,  s(/pm  ;  Wilkinson  t'.  Frazier,  supra;  Dry  i;. 
Boswell,  1  Campb.  329  ;  Pott  v.  Eyton,  3  C.  B.'32. 

1  Act,  1790,  c.  56,  (29,)  1  U.  S.  Stats.  131  ;  Magee  v.  Moss,  Gilpin,  229  ;  Wood  v. 
The  Nimrod,  id.  83;  Douglass  v.  Eyre,  id.  147,  219;  Brown  w.  Jones,  2  Gallis.  477; 
Countess  of  Harcourt,  1  Hagg.  248  ;.  The  Eliza,  id.  185  ;  The  Minerva,  id.  354;  The 
George  Home,  id.  374.  In  this  last  case  it  was  decided  that  under  an  engagement  to 
go  "  from  London  to  Batavia  in  the  East  India  seas,  or  elsewhere,  and  until  the  final 
arrival  at  any  port  or  ports  in  Europe,"  the  seamen  were  not  bound,  upon  the  arrival 
of  the  vessel  at  Cowes  for  orders,  according  to  previous  agreement  between  the  owners 
and  the  master,  to  proceed  on  a  further  voyage  to  Rotterdam ;  Lord  Stowell  remark- 
ing :  "  It  is  a  dry  question  upon  the  sufficiency  of  the  description  of  the  voyage 

The  mariner's  contract  describes  the  voyage  for  wliicii  tliey  undertake,  '  to  be  from 
the  port  of  London  to  Batavia,  to  any  ports  and  places,  the  East  India  seas  or  else- 
where, and  until  her  final  arrival  at  any  port  or  ports  in  Europe.'  This  is  certainly  a 
most  sweeping  description  of  the  ports  ofunlivery,  for  it  comprehends  every  port  situ- 
ated between  the  southern  and  northern  extremities  of  Europe.  It  would  apply  with 
equal  truth  to  Corfu  and  Archangel ;  it  could  not  in  cither  case  be  charged  as  a  mis- 
representation. But  though  a  true  description  in  that  sense,  and,  therefore,  not  liable 
to  a  charge  of  absolute  deception,  yet  it  by  no  means  answers  the  beneficial  purposes  for 
which  the  law  makes  the  demand  in  favor  of  the  mariner.  Tlie  beneficial  purjjoses  for 
which  the  law  makes  such  a  requisition  in  his  favor  arc,  that  he  may  know  as  exactly 
as  can  be  descrilied,  for  what  probable  space  of  time  he  surrenders  himself,  his  services, 
his  interest,  his  domestic  comforts,  his  health  and  personal  convenience.  These  and 
other  considerations  are  to  influence  his  decision.  With  respect  to  the  disposal  of  him- 
self, he  has  a  right  to  be  informed  as  far  as  competent  accuracy  can  be  applied  to  the 
subject ;  and  it  is  unnecessary  to  add,  that  a  description  which  extends  over  one  entire 
quarter  of  the  globe,  without  any  more  particular  limitation,  though  geographically 
true,  affords  nothing  that  can  be  considered  as  bearing  the  shape  or  color  of  such  accu- 
racy.    It  may  be  truly  and  justly  said,  that  cases  may  occur  in  which  the  exigencies  of 

commerce  may  not  admit  of  such  accuracy But  though,  possibly  in  many  cases 

not  attainable,  yet  in  most  cases,  and  among  otlrers,  in  tlic  present  case,  a  much  nearer 
approach  might  be  made  towards  certainty,  than  is  made  in  the  instance  of  the  present 
description.  I  take  it  that  by  the  preconcerted  arrangement,  the  vessel  was  to  come 
up  to  Cowes,  in  the  British  Channel,  and  there  to  receive  orders  from  the  English 
owners  in  London  at  wliat  port  the  cargo  was  to  be  deposited.  The  proper  descrip- 
tion of  tlie  voyage  ought,  therefore,  in  the  mariners'  contract,  to  have  l)cen  stated  for 
the  ship  to  come  to  Cowes,  and  there  to  receive  the  owners  order  for  the  delivery 
of  tlie  cargo  in  England,  Holland,  or  even  in  ^e  ports  of  the  North  Sea,  if  there 
was  any  such  latter  destination  intended.  Tl*  mariner,  upon  such  a  description, 
would  have  received  full  and  true  information  of  all  which  it  imported  him  to  knowj 
in  order  to  determine  his  mind  upon  the  propriety  of  his  engagement  in  the  con- 
tract ;  it  would  be  a  true  description,  not  merely  geographically,  for  the  fact  of  the 
voyage,  but  for  a  ]3roper  conformity  to  the  purposes  of  the  statute.  ...  I  am  far  from 
proposing  the  mode  I  have  suggested  as  an  universal  specific  for  all  possible  cases. 
But  the  general  principle  must  be  that  precision  must  be  given  as  far  as  practica- 
ble." As  to  the  use  of  the  words  "elsewhere,"  in  the  description  of  the  voyage 
in  the  shipping  articles,  sec  the  English  cases  before  cited ;  also,  1  Hall,  Am.  Law 


on.  XVII.]  OF   THE   LAAV    OF    SHIPPING.  387 

catcliing  language,  and  against  unusual  and  oppressive  stipula- 
tions.^ If  a  number  of  porls  are  mentioned,  they  are  to  be  visited 
only  in  their  geographical  and  commercial  order,  and  not  revisit- 
ed unless  the  articles  give  the  master  a  discretion.^  Admiralty 
courts  enforce  or  disregard  the  stipulations,  as  they  are  fair  and 
legal,  or  otherwise,  and  exercise  a  liberal  equity  on  this  subject ;  ^ 

Joum.  209,  and  Brown  v.  Jones,  2  Gallis.  477.  A  description  in  sliippinp;  articles, 
of  iv  voyajrc  iVoin  New  London  to  Oporto  and  elscwlicrc,  was  held  to  mean  a  voy- 
af^e  from  New  London  to  Oporto :  and  tlic  words  "and  elsewhere''  were  rejected  for 
uncertainty.  Ely  v.  Peck,  7  Conn.  239.  As  to  the  meaning  of  the  word  "  cruise," 
in  the  shipping  articles,  sec  The  Brutus,  2  Gallis.  526.  A  trading  voyage  does  not 
include  a  freighting  voyage.    Brown  r.  Jones,  2  Gallis.  477. 

1  Leading  cases  on  this  subject  arc  The  Juliana,  2  Dods.  .504  ;  Harden  v.  Gordon,  2 
Mason,  541;  Brown  r.Liill,  2  "Sumn.  443.  In  Harden  v.  Gordon,  Stori/,  J.,  said:  "Every 
court  should  watch  with  jealousy  an  encroachment  upon  the  rights  of  seamen,  becaiise 
they  are  unprotected,  aiid  need  counsel ;  because  they  are  thoughtless,  and  require 
indulgence ;  because  they  are  credulous  and  complying,  and  are  easily  overreached. 
But  courts  of  maritime  law  have  been  in  the  constant  habit  of  extending  towards 
them  a  peculiar  protecting  favor  and  guardianship.  They  are  emphatically  the  wards 
of  the  admiralty.  If  there  is  any  undue  equality  in  the  terms,  any  disproportion 
in  the  bargain, 'any  sacrifice  of  rights  on  one  side,  which  are  not  compensated  by 
extraonlinary  l)enefits  on  the  other,  the  judicial  interpretation  of  the  transaction  is, 
that  the  bargain  is  unjust  and  unreasonable;  that  advantage  has  been  taken  of  the  sit- 
uation of  the  weaker  party,  and  that,  pro  taiilo,  the  bargain  ought  to  be  set  aside  as 
inequitable.  Hence,  every  "deviation  from  the  terms  of  the  common  shipping  paper, 
which  stands  upon  tiie  general  doctrines  of  maritime  law,  is  rigidly  inspected  ;  and  if 
additional  burdens  or  sacrifices  are  imposed  upon  the  seamen  without  adequate  remu- 
neration, the  court  feels  itself  authorized  to  interfere,  and  moderate  or  annul  the  stipu- 
lation." Accordingly,  in  this  case,  a  stipulation  that  the  seamen  should  pay  for  medi- 
cal .aid  and  medicines  further  than  the  ship  aflbrded,  no  extraordinary  compensation 
being  allowed  therefor,  was  set  aside  as  grossly  inequitable.  As  to  clauses  affecting 
the  rights  of  the  seamen  to  their  wages,  see  Johnson  i'.  The  Lady  WalterstorfF,  1  Pets. 
Ad.  215  :  Id.  18G,  n  ;  Swift  v.  Clark,  15  Mass.  173  ;  Brown  v.  Lull,  supra;  The  Juliana, 
supra  ;  The  Hogljton,  3  Hagg.  100  ;  Rice  v.  Hayllct,  3  Car.  &  Payne,  534,  where  a  crew 
were  sliippcd  on  a  voyage  "  to  a  port  or  ports  easterly  of  the  Cape  of  Good  Hope,  or  any 
other  port  or  ports  to  which  the  master  should  see  fit  to  go,  in  order  to  procure  a  cargo," 
but  the  owners  really  intended  that  the  vessel  should  proceed  to  Ichaboc,  thci'e  to  ship 
guano,  which  destination  was  concealed  from  the  crew,  the  court  held  that  the  seamen 
were  not  bound  to  load  the  guano  for  the  wages  fixed  in  the  shipping  articles.  Smith 
V.  The  Brooklyne,  8  Law  Rep.  70.  -Where  any  doubt  arises  upon  the  construction  of 
the  shipping  articles,  the  court  will  give  the  benefit  of  it  to  the  seamen.  The  Minerva, 
1  Hagg.  355  ;  The  Hoghton,  3  Hagg.  112 ;  Jansen  v.  Heinrich,  Crabbe,  226. 

2  Douglass  ('.  Eyre,  1  Gilp.  147.  In  this  case  it  was  held  that  shipping  articles  for  a 
voyage  "from  Philadelphia  to  Gibraltar,  other  ports  in  Europe,  or  South  America,  and 
back  to  Philadelphia,  authorize  a  voyage  directly  from  Gibraltar  to  South  America, 
without  proceeding  to  any  intermediate  European  port,  but  not  a  return  afterwards  from 
South  America  to  a»  European  port.  See,  also,  INIagee  v.  Ship  Moss,  1  Gilp.  229  ; 
Woods  V.  The  Nimrod,  id.  83;  Brown  v.  Jones,  2  Gall.  477- 

^  The  Minerva,  1  Hagg.  347 ;  The  Prince  Frederick,  2  Hagg.  394 ;  Sims  v.  Jack- 
son, 1  AYash.  C.  C.  414;'  Natterstrom  r.  The  Ship  Hazard,  Bee's  Adm.  441  ;  Har- 
den V.  Gordon,  2  Mason,  541  ;  Brown  v.  Lull,  2  Sumn.  443.  "  Courts  of  Admiralty," 
said  Mr.  Justice  Storij,  in  this  last  case,  p.  449,  "  are  accustomed  to  consider  seamen  as 
peculiarly  entitled  to  their  protection;  so  that  they  have  been,  by  a  somewhat  bold 
■figure,  often  said  to  be  favorites  of  courts  of  admiralty.-  In  a  just  sense  they  are  so ; 
so  far  as  the  maintenance  of  their  rights,  and  the  protection  of  their  interests,  against 
the  eft'ects  of  the  superior  skill  and  shrewdness  of  masters  and  owners  of  ships  are  con- 
cerned. Courts  of  admiralty  are  not,  by  their  constitution  and  jurisdiction,  confined  to 
the  mere  dry  and  positive  rules  of  the  common  law.  But  they  act  upon  the  enlarged 
and  liberal  principles  of  courts  of  equity  ;  and  in  short  so  far  as  their  powers  extend, 
they  act  as  courts  of  equity.    AVhercver,  therefore,  any  stipulation  is  found  in  the  ship- 


388  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XVII. 

but  courts,  of  common  law  are  more  strictly  bound  by  the  letter 
of  the  contract.'  The  articles  are  generally  conclusive  as  to 
wages;  but  accidental  errors  or  omissions  maybe  supplied  or 
•corrected  by  either  party,  by  parol.^ 

Second.  Wages  are  regulated  as  above  stated,  and  also  by 
limiting  the  right  to  demand  payment  in  a  foreign  port,  to  one 
third  the  amount  then  due,  unless  it  be  otherwise  stipulated.^ 
Seamen  have  a  lien  on  the  ship  and  on  the  freight  for  their 
wages,  which  is  enforceable  in   admiralty.*     By  the  ancient  rule, 

ping  articles,  wliich  derogates  from  the  general  rights  and  privileges  of  seamen,  conrts  of 
admiralty  hold  it  void,  as  founded  upon  imposition,  or  an  undue  advantage  taken  of 
their  necessities,  and  ignorance,  and  improvidence,  unless  two  things  concur,  —  first, 
that  the  nature  of  the  clause  is  fairly  and  fully  explained  to  the  seamen,  and  secondly, 
that  an  additional  compensation  is  allowed,  entirely  adequate  to  the  new  restrictions 
and  risks  imposed  upon  them  thereby." 

1  Cutter  V.  Powell,  G  Term,  320 ;  Appleby  v.  Dods,  8  East,  300 ;  Jesse  v.  Roy,  1 
Crompt.,  Mees.  &Rosc,  316,  340.     See,  also,  Brown  v.  Lull,  supra. 

2  Veacoek  v.  M'Call,  1  Gilp.  329  ;  Wickham  v.  Blight,  ib.  4.52;  Bartlett  v.  Wyman, 
14  Johns.  260  ;  The  Isabella,  2  Rob.  241  ;  The  Providence,  1  Hagg.  391  ;  The  Harvey, 
2  Hagg.  82 ;  The  Prince  George,  3  Hagg.  37G  ;  Dafter  v.  Cresswell,  7  Dowl.  &  Ryl.  650. 
Where  the  rate  of  wages  is  not  specified  in  the  shipping  articles,  the  statute  of  1790, 
c.  56,  (29)  ij  1,  provides  that  the  seamen  shall  he  entitled  to  the  highest  rate  of  wages 
paid  at  the  port  where  he  ships,  for  a  similar  voyage,  within  the  three  months  preced- 
ing, and  parol  evidence  will  not  be  admitted  to  show  an  agreement  for  a  lower  rate. 
The  Crusader,  Ware,  437. 

3  Act,  1790,  ch.  56,  (29,)  §  6;  1  Pets.  Adm.  186,  n. ;  Johnson  v.  The  Walterstorff,  1 
Pets.  Adm.  215. 

*  Sheppard  v.  Taylor.  5  Pets.  Sup.  Ct.  675 ;  The  Mary,  Paine,  C.  Ct.  180 ;  The  Brig 
Spartan,  Ware,  134;  Lewis  v.  The  Elizabeth  &  Jane,  ib.  44;  Skolcfield  v.  Potter, 
Daveis,  392 ;  Smith  r.  The  Stewart,  Crabbe,  218 ;  Tavlor  v.  The  Royal  Saxon,  1  Wal- 
lace, Jr.  311  ;  The  Sidney  Cove,  2  Dods.  13  ;  The  Neptune,  1  Hagg.  227,  239  ;  The 
Juliana,  2  Dods.  504;  The  Golubchick,  1  W.  Rob.  143.  And  every  pijrt  of  the  freight  is 
liable  for  the  whole  of  the  wages.  Skolefield  v.  Potter,  supra.  The  lien  attaches  on 
money  paid  by  a  foreign  government  as  indemnity  for  a  wrongful  seizin-e  of  the  vessel, 
and  consequent  loss  of  freight,  and  maybe  enforced  by  a  libel  against  such  proceeds 
in  the  hands  of  assignees  having  notice  of  the  claim.  Sheppard  v.  Taylor,  supra.  See, 
also.  Brown  v.  Lull,  2  Sumn.  443  ;  Pitman  v.  Hooper,  3  Sumn.  50.  In  Sheppard  v. 
Taylor,  the  lien  was  said  not  to  extend  to  the  cargo,  which  was  the  property  of  the  insol- 
vent owners  of  the  vessel,  but  it  is  to  be  remarked,  that  freight  had -been  awarded  to  the 
assignees  as  a  distinct  item,  and  to  this  the  lien  was  allowed  to  attach.  Understood 
with  reference  to  these  circumstances,  the  doctrine  of  the  court  in  this  case  does  not 
appear  inconsistent  with  the  case  of  "  The  Spartan,"  supra,  where  Ware,  J.,  held,  that 
where  a  ship  carries  the  goods  of  her  owners,  the  seamen  have  a  lien  on  the  cargo  for 
their  wages,  for  a  charge  in  the  nature  of  freight.  Sec,  also,  Skolefield  v.  Potter,  supra, 
p.  402  ;  and  the  ease  of  Tlie  Lady  Durham.  3  Hagg.  198,  where  the  court  say  :  "  A  mar- 
iner has  no  lien  on  the  cargo  as  cargo.  His  lien  is  upon  the  ship,  and  upon  the  freight 
as  appurtenant  to  the  ship ;  and  so  far  as  the  cargo  is  subject  to  freight,  he  may  attach 
it  as  a  security  for  the  freight  that  may  be  due."  See,  also,  Tlie  Riby  Grove,  2  W.  Rob. 
59.  AVhere  a  voyage  is  illegal,  the  seamen's  wages  are  no  lion  on  the  vessel.  Brig 
Langdon,  Cheves,  2  Mr.son,  58  ;  The  Vanguard,  6  Rob.  207  ;  The  Malta,  2  Hagg.  163. 
It  is  difi'erent  where  the  infraction  is  of  the  laws  of  a  foreign  power,  and  is  consummat- 
ed without  the  assent  of  the  crew.  Sheppard  v.  Taylor,  supra.  The  wages  are  due 
at  the  end  of  the  voyage,  but  are  not  payable  till  the  expiration  of  the  period  allowed 
by  law  for  discharging  the  vessel  and  collecting  Ihc  freight.  Hastings  v.  The 
Happy  Return,  1  Pets.  Ad.  213.  And  in  the  absence  of  a  custom  to  the  contrary,  the 
seamen  are  bound  to  assist  in  unloading  the  vessel.  —  Same  case.  Accordingly,  where 
due  diligence  had  been  used,  but  the  ship  could  not  be  unloaded  within  the  ten  days 


CII.  XVII.]  OF   THE    LAW    OP    SHIPPING.  389 

that  freight  is  the  mother  of  wages,  any  accident  or  misfortune 
which  makes  it  impossible  for  the  ship  to  earn  its  freight, 
destroys  the  claim  of  the  sailors  for  wages.' 

allowed  by  the  statute,  more  than  fifteen  days  were  allowed  by  the  court  for  that  purpose. 
Thompson  v.  The  rhihulelphia.  1  Pets.  Ad.  210.  See,  also,  Edwards  v.  Tlie  Sliip 
Susan,  1  Pets.  Ad.  1G5.  But  tiie  mariners  [may  file  their  libel  for  wages  within  the 
statutory  interval,  altliough  no  jirocess  can  issue  against  tiie  vessel.  Tlie  Mary,  Ware, 
454.  The  lien  for  wages  has  jireecdenee  over  bottomry  bonds.  The  Madonna  d'Idra, 
1  Dods.  37  ;  and  over  all  otiiers  ;  Brown  ;■.  Lull,  supra  :  I'itman  v.  IIooi)er,  supm. 

1  Anon.  1  Ld.  Kavm.  039 ;  lb.  1  Sid.  179  ;  Ilernaman  v.  Bawden,  .3  Burr,  1844  ;  The 
Neptune,  1  Ilagg.  232  ;  The  Malta,  2  ^ag^^  162  ;  Opinion  of  Judge  Winchester,  1  Pets. 
Ad.  186,  n.;  Giles  v.  The  Cynthia,  I  Pets.  Ad.  203 ;  Weeks  v.  The  Catharina  Maria,  2 
Pets.  Ad.  424 ;  Tiiompson  v.  Faussat,  1  Pets.  C.  C.  182;  The  Saratoga,  2  Gallis.  164, 
17.5;  Tlie  Two  Catherines,  2  Mason,  319;  Brown  v.  Lull,  2  Sumn.  443;  Pitman 
r.  Hooper,  3  Sumn.  50;  Adams  v.  The  Sophia.  1  Gilp.  77;  Brooks  v.  Dorr  d  ul.,  2 
IMass.  45;  per  Sedgwick.  J.;  Moore  v.  Jones,  15  Mass.  424  ;  Blanehard  v.  Bucknain,  3 
Greenlf.  1  ;  Iloyt  v.  Wildlire,  3  Johns.  518  ;  Murray  v.  Kellogg,  9  Johns.  227  ;  Porter 
V.  Andrews,  id.  350.  It  is  not  sufHeient  to  destroy  the  mariner's  claim  to  wages,  that  no 
freight  actually  has  been  earned,  if  it  might  have  been.  Pitman  i».  Hooper,  supra. 
Hence,  where  the  non-earning  of  freight  is  owing  to  the  act  or  default  of  the  owner  or 
master  of  the  vessel,  the  seamen  are  entitled  to  their  wages.  1  Pets.  Ad.  192,  in  note. 
Therefore,  "  if  the  voyage  or  freight  be  lost  by  the  negligence,  fraud,  or  misconduct  of 
the  owner  or  master,  or  voluntarily  abandoned  l)y  them  ;  if  the  owner  have  contracted 
for  freight  upon  terms  or  contingencies  diftering  from  the  general  rules  of  maritime 
law;  or  if  he  have  chartered  his  ship  to  take  a  freight  at  a  foreign  port,  and  none  is  to 
be  earned  on  the  outward  voyage,  in  all  these  cases  the  mariners  are  entitled  to  wages, 
notwithstanding  no  freight  has  been  earned."  Per  Stnri/,  J.,  in  the  case  of  The  Sara- 
toga, s((y«-a ;  and  see  Hindman  r.  Shaw,  2  Pets.  Ad.  264  ;  Giles  v.  The  Cynthia,  supra  ; 
M'Quirk  i'.  The  Penelope,  2  Pets.  Ad.  276;  The  Two  Catherines,  supra;  Brown 
V.  Lull,  «»/»■«;  Emerson  r.  Howland,  1  Mason,  45;  Hoyt  v.  Wildfire,  3  Johns.  518; 
Van  Beuren  v.  Wilson,  9  Cowen.  158  ;  Blanehard  r.  Bucknam,  s/^wa  ;  Oxnard  v.  Dean, 
10  Mass.  143;  The  Juliana,  2  Dods.  504;  The  Malt^i,  supra;  The  Neptune,  1  Ilagg. 
232:  The  Lady  Durham,  3  Ilagg.  202,  per  Sir  J.  N'lchoU.  "  If  freight  is  earned  in  the 
vollge,  and  for  the  voyage,  whether  it  is  greater  or  less,  and  whether  it  is  actually 
secured  by  the  owner  or  not,  makes  no  difference  in  the  rights  of  the  seamen."  Per 
Story,  J.,  in  Pitman  i'.  Hooper,  3  Sumn.  p.  60.  From  this  intimate  connection  between 
the  freight  and  wages,  it  results  that  where  the  voyage  is  devisable  for  the  earning  of 
freight.it  is  so  for  the  earning  of  wages,  I  Pets.  Ad.  186,  n. ;  Anon.  I  Ld.  Raym.  639, 
Hence,  where  a  voyage  is  divided  by  various  ports  of  delivery,  so  that  the  freight 
is  earned,  or  would  have  been  under  the  general  maritime  law,  in  portions,  a  propor- 
tionate claim  for  wages  attaches  at  each  of  tiiose  ports.  Edwards  v.  Childs,  2  Vern. 
727  ;  The  Juliana,  supra;  Anon.  1  Pets.  Ad.  186,  n. ;  and  for  this  purpose,  a  port  of 
destination,  to  which  the  vessel  proceeds  in  ballast,  is  a  port  of  delivery.  Giles  et  al.  v. 
Tlie  Cynthia,  supra.  "  And  there  can  be  no  difference  in  principle  whether  the  vessel 
go  empty  to  a  destined  port  for  a  cargo,  or  return  un(ier  disappointment  without  "one." 
Same  case.  See  also  Millet  v.  Stephens,  2  Dane's  Ab.  c.  57,  p.  461  ;  The  Two  Cathe- 
rines, supra ;  Blanehard  v.  Bucknara,  supra.  But  see  Thompson  i'.  Faussat,  supra.  In 
omputing  what  is  due  in  such  cases,  it  is  the  established  rule  to  consider  half  the  time 
spent  by  the  vessel  in  such  a  port  as  included  in  the  voyage  to  it.  Pitman. «.  Hooper, 
supra.  Therefore,  where  the  ship,  after  touching  at  several  such  ports,  meets  with  a 
disaster,  the  seamen  are  entitled  to  their  wages  up  to  her  arrival  at  the  last  of  these 
ports,  and  for  half  the  time  she  remained  there.  Giles  w.  The  Cynthia,  supra ;  Johnson 
V.  The  Walterstorff,  1  Pets.  Ad.  215;  Cranmer  u.Gernon,  2  Pets.  Ad.  390;  The  Two 
Catherines,  supra;  Bordman  v.  The  Elizabeth,!  Pets.  Ad.  130;  Galloway  i'.  Morris, 
3  Yeates,  445 ;  Murray  v.  Kellogg,  9  Johns.  227  ;  Blanehard  ;;.  Bucknain,  supra ;  Thomp- 
son V.  Faussat,  1  Pets.  C  C,  182;,  Hooper  v.  Pcrley,  11  Mass.  ^545;  Smith  v.  The 
Stewart,  Ciabbe,  218;  Locke  v.  Swan,  13  Mass.  76;  Swift  v.  Clarke,  15  Mass.  173; 
Moore  r.  Jones,  15  Mass.  424;  Brown  c.  Lull,  s((/)ra ;  Pitman  r.  Hooper,  s!//wa.  But 
see  Bronde  i\  Haven,  1  Gilp.  592.  In  the  case  of  Brown  v.  Lull,  2  Sumner,  443,  it  was 
held,  that  "  the  capture  of  a  merchant  ship  does  not  itself  operate  as  a  dissolution  of  the 
contract  for  mariner's  wages,  but  at  most  only  as  a  suspension  of  the  contract.    If  the 

33* 


390  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  XVn. 

Third.  Provisions  of   due  quality  and  fjuantity  must   be  fur- 
nished by  the  owner,  and  double  wages  arc  given  to  the  seamen, 

ship  is  restored,  and  performs  her  voyage,  the  contract  is  revived,  and  the  mariner  be- 
comes entitled  to  his  wages;  that  is,  to  his  full  wages  for  the  whole  voyage,  if  lie  has 
remained  on  board  and  done  his  dnty,  or  if,  being  taken  out,  he  has  been  unable,  with- 
out any  fault  of  his  own,  to  rejoin  the  ship.  If  the  ship  is  condemned  l)y  a  sentence  of 
condemnation,  then  the  contract  is  dissolved,  and  the  seamen  arc  discharged  from  any 
further  duty  on  board  ;  and  they  lose  their  wages,  unless  there  is  a  subsequent  restitu- 
tion of  the  property,  or  of  its  equivalent  value,  upon  an  appeal,  or  by  treaty,  with  an 
allowance  of  freight,  in  wliich  event  their  claim  for  wages  revives.  In  the  case  of  a 
restitution  in  value,  the  proceeds  represent  the  ship  and  freight,  and  arc  a  substitute 
therefor.  If  freight  is  decreed  or  alloweil  for  tlie  whole  voyage,  tlien  the  mariners  are 
entitled  to  the  full  wages  for  the  whole  voyage  ;  for  the  decree  for  freight  in  such  a 
case  includes  an  allowance  of  the  full  wages,  and  consequently  creates  a  trust  or  lien 
to  that  extent  thereon,  for  the  benefit  of  the  mariners.  If  the  freight  decreed  or  allowed 
is  for  a  part  of  the  vo^iige  only,  the  seamen  arc  ordinarily  entitled  to  wages  up  to  the 
time  for  which  the  freight  is  given,  unless,  under  special  circumstances  ;  as,  where  they 
have  remained  by  the  ship,  at  the  special  recjuest  of  the  master,  to  preserve  and  protect 
the  property  for  the  benefit  of  all  concerned."  See,  also,  Pitman  w.  Hooper,  si(/7ra; 
The  Saratoga,  supra ;  Watson  v.  The  Rose,  1  Pets.  Ad.  132 ;  Hart  v.  The  Little  John, 

I  Pets.  Ad.  11.5;  Howland  v.  The  Lavinia,  1  Pets.  Ad.  123;  Girard  v.  Ware,  1  Pets. 
C.  C.  142.  Shcppard  v.  Taylor,  5  Pet.  S.  C.  67.5;  Vandever  v.  Tilghman,  Crabbe, 
66 ;   Brooks  v.  Dorr,  2  Mass.  39 ;   Lemon  v.  Walker,  9  Mass.  403  ;'  Hoojjer  v.  Pcrley, 

II  Mass.  545;  Spafford  v.  Dodge,  14  Mass.  66.  In  such  cases  a  deduction  will,  how- 
ever, be  made,  of  any  wages  earned  by  the  seamen  whilst  separated  from  the  vessel. 
Singstrom  v.  The  Hazard,  2  Pets.  Ad.  384;  Brooks  v.  Dorr,  2  Mass.  39;  Wetmore, 
V.  Henshaw,  12  Johns.  324.  The  same  principles  apply  to  the  case  of  an  embargo. 
Marshall  v.  Montgomery,  2  Dall.  170.  The  doctrine  of  the  English  courts  appears 
to  be,  that  the  mariner's  contract  is  dissolved  by  a  capture,  but  that  on  recapture,  the 
right  to  wages  revests.  Beale  r.  Thompson,  4  East,  546  ;  Johnson  v.  Broderick,  ib.  566  ; 
Pratt  V.  Cuff,  cited  in  Thompson  v.  liowcroft,  ib.  43  ;  Bergstrom  v.  Mills,  3  Esp.  36  ; 
Delamaincr  v.  Winteringham,  4  Camp.  186;  and  see  the  case  of  The  Friends,  4  Kob. 
143,  where  Sir  W.  Scott  refused  wages  to  a  seaman  who  had  been  removed  from  a  vessel 
at  the  time  she  was  captured,  so  tiiat  he  could  not  rejoin  her  upon  a  subseq#nt 
reca])ture,  and  that  her  owner  was  obliged  to  hire  another  man  in  his  stead,  — even  for 
the  short  interval  preceding  the  capture.  In  case  of  The  Dawn,  Daveis's  Rep.  121, 
Ware,  3.,  after  an  elaborate  examination  of  the  subject,  held  that  in  cases  of  shijjwreck, 
"  the  crew  are  bound  to  remain  by  the  vessel  and  contribute  their  utmost  exertions  to 
save  as  much  as  possible  from  the  wreck  ;  that  if  this  is  done,  they  are  always  entitled 
to  their  full  wages,  if  enough  is  saved  for  that  jjurpose  ;  but  if  tliey  abandon  the  wreck, 
and  refuse  to  aid  in  saving  it,  their  wages  are  forfeited.  But  that  they  may  not  rest 
satisfied  with  saving  what  is  merely  sufficient  to  pay  their  wages,  and  may  be  induced 
to  persevere  in  their  exertions  so  long  as  the  chance  of  saving  any  thing  remains,  the 
law,  from  motives  of  policy,  allows  them,  according  to  the  circumstances  and  merits  of 
their  services,  a  further  reward  i*i  the  nature  of  salvage.  The  wages  are  to  be  paid 
exclusively  from  the  materials  of  the  ship,  but  the  salvage  is  a  general  charge  upon  the 
whole  mass  of  proverty  saved.  It  is  not,  however,  intended  to  be  said  that  they  can 
claim  as  general  salvors,  that  is,  as  persons  who,  being  under  no  obligation  to  the  ship, 
engage  in  this  service  as  volunteers,  or  that  they  are  entitled  to  be  rewarded  at  the  same 
liberal  rate.  But  they  are  to  be  allowed  a  reasonable  compensation,  pro  opere  et  labore, 
as  the  rule  is  laid  down  in  many  of  the  old  ordinances,  boiii  viri  arhitrio.  If  the  disaster 
happens  in  a  foreign  country,  it  ought  to  be  at  least  a  sum  sufficient  to  pay  the  expenses 
of  their  return  home."  See,  also,  the  language  of  the  court  in  Giles  et  al.  v.  The  Cyn- 
thia, supra.  In  general,  it  may  be  said  that  if  the  crew  of  a  shipwrecked  vessel  do  their 
duty  by  her,  and  by  their  exertions  contribute  to  the  saving  of  any  remnants  of  the 
wreck,  they  sliould  be  regarded  as  entitled  to  a  reward  ;  but  whether  in  the  nature  of 
wages  or  of  salvage,  or  both,  as  held  by  J.  Ware,  and  to  what  extent,  has  been  matter 
of  much  conflict  in  the  cases,  and  cannot  be  considered  as  decided.  See  The  Cato,  1 
Pets.  Ad.  48,  58  ;  Clayton  v.  The  Harmony,  id.  70,  79  ;  Id.  186,  n. ;  Giles  v.  The  Cyn- 
thia, supra;  Adams  v.  The  Sophia,  1  Gilp.77  ;  Brackett  v.  The  Hercules,  1  Gilp.  184  ; 
The  Saratoga,  2  Gallis.  164,  183  ;  The  Two  Catherines,  2  Mason,  319;  Ilobart  v.  Dro- 


CH.  XVII.]  OP   THE    LAW    OF    SHIPPING.  391 

\vh^  on  short  allowance,  unless  the  necessity  be  caused  by 
some  peril  of  the  sea,  or  other  accident  of  the  voyage,^  The 
master  may  at  any  time  put  them  on  a  fair  and  proper  allow- 
ance to  prevent  waste.^ 

Fourth.  As  to  the  sea-worthiness  of  the  vessel,  our  statutes  pro- 
vide that  it  may  be  inquired  into  at  home  or  abroad  by  a  regular 
survey,  on  complaint  of  the  mate  and  a  majority  of  the  seamen.^ 

gan,  10  rets.  122;  Pitman  v.  Hooper,  3  Sumn.  67  ;  Jones  v.  The  Wreck  of  The  Mas- 
siisoit,  7  Law  Hep.  522 ;  Frothiiigliam  v.  Prince,  3  Mass.  .'303  ;  Same  case,  2  Dane's  Ah. 
p.  462;  Dunnctt  v.  Tomhagen,  3  Johns.  154  ;  Bridge  v.  Niagara  Ins.  Co.  1  Ilall,  423  ; 
Lang  i'.  Holbrook,  Cral)l)e,  179.  The  Sidney  Cove,  2  Dods.  13;  The  Neptune,  1 
llagg.  227;  Tlie  Lady  Durham,  3  ih.  196;  The  Reliance,  2  Wm.  Roh.  119.  Seamen 
may,  however,  become  salvors,  properly  speaking,  of  their  own  vessel,  in  some  cases. 
The  Two  Catherines,  supra;  The  Blaireau,  2  Cranch,  240,  269  ;  Hohart  v.  Drogan, 
supra  ;  Williamson  v.  The  Brig  Alphonso,  1  Curtis,  C.  Ct.  376  ;  The  Neptune,  sujira ; 
The  Governor  Railies,  2  Dods.  14;  The  Two  Priends,  1  Rob.  278  ;  The  Beaver,  3  ib. 
292;  The  Florence,  16  Jur.  572.  But  see  The  Cato,  1  Pets.  Ad.  61.  Where  freight 
is  paid  in  advance,  it  has  been  held  that  the  seamen  are  entitled  to  wages  in  proportion 
to  the  amount  of  the  advance,  although  the  ship  perish  before  any  freight  be  earned. 
Anon,  2  Shower,  291  ;  and  see  Brown  v.  Lull,  supra.  The  English  statute,  17  &  18 
Vict.  c.  104,  §  175,  183,  gives  to  seamen,  when  tlie  master  certifies  that  they  have  faith- 
fully performed  their  duty,  a  right  to  wages,  although  no  freight  be  earned. 

I'Act,  1790,  eh.  56,  (29,)  §  9.  The  Siiip  Washington,  1  ^ets.  Ad.  220;  Gardner  v. 
Ship  New  Jersey,  ib.  223  ;  The  JVIary,  Ware,  454.  "  But  courts  have  thought  that 
when  a  vessel  happens  to  be  in  a  port  where  it  is  not  in  the  power  of  the  master  to 
obtain  provisions  of  the  amount  and  description  directed  by  the  law,  other  articles  may 
be  substituted  which  are  of  equivalent  value."  The  Mary,  supra  ;  The  Washington, 
supra.  But  see  the  case  of  Coleman  v.  Brig  Harriet,  Bee's  Ad.  Rep.  80,  where  a  mas- 
ter had  put  to  sea  with  less  than  the  prescribed  quantity  of  bread,  owing  to  his  not 
being  able  to  obtain  a  larger  supply  at  tlie  port  of  departure,  but  with  a  large  excess  of 
beef  and  water.  The  voyage  was  unusually  long,  the  vessel  having  been  dismasted  in 
a  gale  of  wind,  without  which  it  was  admitted  there  would  have  been  no  failure  of 
bread,  supplies  of  which  were  obtained  from  other  vessels  at  sea.  Under  these  circum- 
stances, the  court  were  of  opinion  that  the  crew  were  entitled  to  extra  wages  under  the 
statute,  but  inasmuch  as  they  had  been  placed  on  short  allowance  with  reference  to  the 
single  article  of  bread,  awarded  but  one  third  of  the  amount  of  the  wages  contracted 
for,  over  and  above  the  common  wages.  Under  the  statute,  the  burden  of  proof  is 
upon  the  libellant  to  show,  not  merely  that  he  was  placed  on  short  allowance,  but  that 
the  vessel  sailed  without  the  stores  prescribed  by  the  act.  Perrara  v.  The  Talent, 
Crabbe,  216.  Where  their  rations  are  stopped,  the  crew  are  justified  in  leaving  the 
vessel,  and  do  not  thereby  forfeit  their  wages.     The  Castilia,  1  Hagg.  59. 

-  The  Mary,  supra.  Where  this  occurs,  the  navy  ration,  fixed  1^  Act  1805,  c.  91, 
§  3,  has  been  assumed  as  the  standard  by  which  the  allowance  in  the  merchant  service 
ought  to  be  regulated.     The  Washington,  supra  ;  Gardner  v.  Ship  New  Jersey,  sujira. 

»  Act  of  July  20,  1790,  c.  56,  (29  ;j  1  U.  S.  Stats.  131  ;  Act  of  July  20,  1840,  c.  23. 
The  former  of  these  acts  provides  tiiat  if  the  mate  or  first'ofticer  under  the  captain  and 
a  majority  of  the  crew  of  any  vessel  bound  on  a  voyage  to  a  foreign  port,  shall,  before 
the  vessel  has  left  the  land,  require  the  seaworthiness  of  the  vessel  to  be  inquired  into, 
the  master  shall  stop  at  the  nearest  port  for  the  purpose  of  having  such  incjuiry  made. 
On  the  construction  of  this  act.  Ware,  J.,  remarked  in  the  case  of  The  William  Harris, 
Ware,  373,  that  the  reason  of  the  law  applies  as  strongly  to  the  case  of  a  vessel  dei)art- 
ing  from  a  foreign  port  on  her  return,  as  leaving  her  home  port  on  a  foreign  voyage. 
The  act  contemplates  also  the  case  of  a  vessel  which  has  commenced  her  voyage.  If, 
however,  the  crew,  instead  of  availing  themselves  of  their  right  under  the  statute,  suffer 
the  owner  to  repair  the  vessel  of  his  own  accord,  and  he  employs  an  agent  who  pro- 
nounces her  sea-worthy,  they  cannot  refuse  to  proceed  on  the  ground  that  the  repairs 
are  insufficient,  it  not  appearing  that  they  were  so.  Porter  v.  Andrews,  9  Johns.  350. 
By  the  Act  of  1840,  a  mode  of  proceeding  is  provided  in  a  foreign  port  by  which  to 


392  ELEMENTS    OF   MERCANTILE  LAW.  [CH.  XVII. 

• 

But  this  very  seldom  occurs  in  practice.  If  seamen,  after  being 
shipped,  refuse  to  proceed  upon  their  voyage,  and  are  complained 
of  and  arrested,  the  court  will  inquire  into  the  condition  of  the 
vessel,  and  as  the  complaint  of  the  seamen  is  justified,  in  a 
greater  or  less  degree,  will  discharge  them,  or  mitigate  or  reduce 
their  punishment. 

Fifth.     As  to  sickness,  our  statutes  require  that  every  ship  shall 
have  a  proper  medicine-chest  on  board.^     Moreover,  twenty  cents 

ascertain  the  condition  of  the  vessel  at  the  time  she  left  home,  and  certain  penalties 
imposed  if  it  appear  she  was  not  then  sea-worthy.  Independently  of  this  statute,  it  has 
been  decided  that  the  law  implies  in  the  seaman's  contract  that  the  ship  shall  be  sea- 
worthy at  the  outset  of  the  voyage.  .  Dixon  v.  The  Cyrus,  2  Pets.  Adni.  411.  If  no 
complaint  is  made,  and  the  ship  proceeds  to  sea,  "  nothing  but  inability  can  excuse  the 
mariner  for  a  refusal  of  duty,  whatever  deficiencies  may  then  occur  or  be  discovered." 
Same  case.  But  see  The  William  Harris,  s«;)ra  ;  and  the  case  of  The  United  States  w. 
Ashton,  2  Sumn.  13,  where  Story,  J.,  held  that  it  was  a  sufficient  defence  to  an  endeavor 
to  commit  a  revolt,  that  the  combination  charged  was  to  compel  tire  master  to  return 
into  port  for  the  unseaworthiness  of  the  vessel,  provided  the  act  was  bond  Jide,  and  the 
vessel  actually  unseaworthy,  and  so  wliere  it  was  upon  reasonable  grounds  and  apparent 
unseawortliincss,  and  it  was  doubtful  whether  the  vessel  was  unscaworthv  or  not. 

1  Act  of  1790,  c.  56,  (29,)  ^^  8  ;  1  U.  S.  Stats.  134;  Act,  1805,  c.  88 ;' 2  U.  S.  Stats. 
330.  How  far  these  acts  all'ect  the  general  right  of  the  seamen  under  the  maritime  law 
to  be  cured  at  the  ship's  expense  —  for  which  see  infra  —  has  been  a  question  of  some 
difficulty.  In  the  case  of  an  ordinary  sickness,  not  infectious,  so  as  to  render  the 
removal  of  the  patient  from  the  ship  prudent  or  necessary,  and  where  no  such  removal 
took  place,  and  the  ship  was  properly  provided  with  medicines  and  directions  under 
the  statute,  it  has  been  held  tliat  the  charge  of  a  physician's  attendance  on  board  must 
be  borne  by  the  seaman.  Holmes  ?7.  Hutchinson,  Gilp.  447.  And  it  has  been  held  that 
the  rule  is  the  same  whatever  may  be  the  nature  of  the  disease ;  even  if  it  be  of  a 
violent  and  dangerous  kind.  Pray  v.  Stinson,  8  Shep.  (Maine,)  402.  Where  the 
danger  is  such  as  to  require  it,  the  attendance  of  a  physician  maybe  procured  on  board 
without  the  assent  of  the  seaman,  and  at  his  expense.  Same  cases.  But  if,  from  the 
nature  of  the  disease  or  other  circumstances,  there  is  no  person  on  board  by  whom  the 
medicines  can  be  safely  administered  under  the  printed  medical  directions  accompanying 
the  chest,  such  attendance  will  be  a  charge  upon  tlie  owners.  The  Forest,  Ware,  420. 
So  if  it  becomes  advisable  for  the  convenience  or  safety  of  the  rest  of  the  crew,  as  in 
cases  of  contagious  disease,  tliat  tiie  sick  man  should  be  removed  on  shore  whether 
with  or  without  his  consent,  so  that  he  has  not  the  benefit  of  the  medicine  chest,  his 
expenses  for  medicine  and  advice  remain  a  charge  upon  the  ship.  Harden  v.  Gordon, 
2  Mason,  541;  Walton  w.  The  Neptune,  I  Pets.  Ad.  152;  Hastings  z;.  The  Happy 
Return,  ib.  256,  n. ;  The  Forest,  supra;  The  Brig  George,  1  Sumn.  151.  But,  semhle, 
not  where  the  seaman  is  removed  at  his  own  request  from  a  vessel  properly  provided 
in  all  respects.  Pierce  v.  Patten,  Gilp.  436.  And  see  the  case  of  Pray  v.  Stinson, 
supra.  Cases  requiring  extraordinary  assistance,  such  as  surgical  aid,  whicli  the  ship 
cannot  afford,  are  not  within  the  spirit  of  the  statute  which  it  seems  "is  limited  to  the 
ordinary  cases  of  illness  on  board  the  ship ;  a  sickness  of  such  a  character  that  the 
patient  maybe  and  is  kept  on  board,  and  receives,  or  may  receive  the  benefit  of  the 
medicine  chest  and  directions,  and  the  advice  and  assistance  of  the  master  of  the  ship 
or  some  other  competent  person  attached  to  the  ship,  in  the  application  of  the  medical 
directions  accompanying  the  chest,  and  such  nursing  and  attendance  as  the  situation 
of  the  ship  may  admit."  Per  Davis,  J.,  in  Lamson  v.  Westcott,  1  Sumn.  591,  Appen. 
And  sec  the  remarks  of  Peters,  J.,  in  Hastings  v.  The  Happy  Return,  1  Pets.  Ad.  256,  n. 
See  also  the  case  of  Reed  v.  Canfield,  1  Sumn.  195,  wliere  a  seaman  whose  feet  had 
been  frozen  in  the  service  of  the  ship  so  that  partial  amputation  became  necessary,  was 
allowed  to  recover  the  expenses  of  his  care  from  tlie  owners  under  the  general  maritime 
law.  The  cliarge  for  nursing  and  attendance  are  not  affected  by  the  act.  Story,  J.,  in 
Harden  r.  Gorden,  supra.  Wliere  a  seaman  contracts  a  disease  by  his  own  vices  or 
faults,  and  in  defiance  of  the  counsel  and  command  of  his  superior  officers,  the  vessel 


CH.  XVII.]      •  OF   THE   LAW   OF   SHIPPING.  393 

a  month  arc  deducted  from  tlic  wages  of  every  seaman  to  make 
up  a  fund  for  the  maintenance  of  marine  hospitals,  to  which 
every  sick  seaman  may  repair  without  charge.'  In  addition  to 
this  the  general  law  merchant  requires  every  ship-owner  or  master 
to  provide  suitable  medicine,  medical  treatment,  and  care,  for 
wery  seaman  who  becomes  sick,  wounded,  or  maimed,  in  the 
'  service  of  tlie  ship  at  home  or  abroad,  at  sea  or  on  shore  ;  unless 
this  is  caused  by  the  misconduct  of  the  seaman  himself.^  This 
right  of  cure  extends  to  the  officers  of  the  ship,  and  probably  to 
the  master.^ 

Sixlli.  The  right  of  the  seaman  to  be  brought  back  to  his 
own  home,  is  very  jealously  guarded  by  our  laws.  The  master 
should  always  present  his  shipping  articles  to  the  consul  or  com- 
mercial agent  of  the  United  States,  at  every  foreign  port  which 
he  visits,  but  does  not  seem  to  be  required  by  law  to  do  this, 
unless  the  consul  desires  it.  He  must,  however,  present  them  to 
the  first  boarding  officer  on  his  arrival  at  a  home  port.  And  if 
upon  an  arrival  at  a  home  port  from  a  foreign  voyage,  it  appears 
that  any  of  the  seamen  are  missing,  the  master  must  account 

is  not  chargeable  for  the  expense  of  his  cure.  Pierce  v.  Patten,  supra.  A  claim  by  a 
seaman  for  expenses  of  cure  is  in  tlie  nature  of  a  claim  for  additional  wages,  and 
enforceable  as  such  in  admiralty.  Harden  v.  Gordon,  supra.  The  burden  of  proof  as 
to  the  sufficiency  of  the  medicine  chest,  is  always  upon  the  owner.  The  Forest,  supra; 
The  Nimrod,  Ware,  9. 

1  Act  of  1798,  c.  94 ;  Act  of  1799,  c.  142,  (.36) ;  Act  of  1802,  c.  51  ;  Act  of  1811, 
c.  93.  The  Act  of  1802,  §  3,  extends  a  similar  provision  to  the  case  of  boats,  rafts,  and 
flats,  descending  the  Mississippi  to  New  Orleans.  See  the  remarks  of  Justice  Story  on 
these  acts  in  Reed  u.  Canfield,  1  Sumn.  200.  It  is  there  stated  that  they  had  been  con- 
strued in  practice  not  to  impose  upon  ships  and  vessels  in  the  whale  and  other  fisheries 
the  payment  of  hospital  money,  although  their  object  is  "the  relief  and  maintenance 
of  sick  and  disabled  seamen,"  without  the  slightest  reference  to  the  time,  the  place,  or  the 
manner  of  their  sickness  or  disability,  whether  in  port  or  on  the  ocean,  whether  in  the 
service  of  the  ship  or  otherwise  ;  whether  from  their  own  fault,  or  from  inevitable  casu- 
alty. They  are  auxiliary  to  and  do  not  supersede  the  maritime  law;  hence,  they  do 
not  affect  tlie  claim  of  a  seaman  injured  in  the  ship's  service  iu  port,  to  be  cured  at 
the  expense  of  the  vessel  under  that  law. 

^  Harden  v.  Gordon,  2  Mason,  .541 ;  The  Ship  Neptune,  1  Pets.  Ad.  142;  Hastings 
V.  The  Happy  Return,  ib.  250,  n. ;  Pierce  v.  Patten,  Gilp.  436  ;  The  Forest,  Ware,  420  ; 
The  Brig  George,  1  Sumn.  151 ;  Reed  v.  Canfield,  ib.  197  ;  Lamson  v.  Westcott,  ib. 
591,  Appen. ;  Johnson  v.  Huckins,  6  Law  Rep.  311 :  Laws  of  Oleron,  Art.  7  ;  Laws  of 
Wisbuy,  Art.  19;  Of  the  Hanse  Towns,  Art.  39;  Molloy,  243;  Viner's  Ab.  tit. 
"Mariners,"  E.  3;  L'Ord.  de  la  Marine,  liv.  3,  tit.  4,  .art.  11;  Valin,  Com.  tome  1, 
p.  721;  Pothicr,  Voyages  Mar.  n.  190;  Cleirac,  us  et  Contumes  de  la  Mer,  p.  31. 
"  The  Maritime  Law,"  said  Justice  Story,  in  the  case  of  Reed  v.  Canfield,  supra, 
"embraces  all  sickness  sustained  in  the  service  of  the  ship  and  while  the  party  consti- 
tates  one  of  the  crew,  without  in  the  slightest  manner  alluding  to  any  difference  ^ 
between  their  occurring  in  a  home  or  in  a  foreign  port,  upon  the  ocean  or  upon  tide 
waters."  But  neither  under  that  law  nor  the  United  States  Statutes,  is  the  seaman  to  re- 
ceive any  compensation  or  allowance  for  the  effects  of  the  injury.  The  owners  are  not 
in  any  just  sense  liable  for  consequential  damages.     Same  case. 

2  The  Brig  George,  1  Sumn.  151. 


394  ELEMENTS    OF   MERCANTILE   LAW.  .       [CU.  XVII. 

for  their  absence.'  If  he  discharge  a  seaman  abroad  with  his 
consent,  he  must  pay  to  the  American  consul  three  months' 
wages,  of  which  the  consul  gives  two  to  the  seaman,  and  remits 
one  to  the  treasury  of  the  United  States  to  form  a  fund  for 
bringing  home  seamen  from  abroad.^  This  obligation  does  not 
apply,  where  the  voyage  is  necessarily  broken  up  by  a  wreck,  ©r 
similar  misfortune.^     But  proper  measures  must  be  taken  to  re- 

1  Act  of  Feb.  28,  1803,  c.  62.  The  first  section,  of  this  act  is  as  follows  :  "Be  it 
enacted,  &c..  That,  before  a  clearance  be  granted  to  any  vessel  bound  on  a  foreign 
voyage,  the  master  thereof  shall  deliver  to  the  collector  of  the  customs  a  list,  contain- 
ing the  names,  places  of  birth  and  residence,  and  a  description  of  the  persons  who 
compose  his  ship's  company,  to  which  list  the  oath  or  affirmation  of  the  captain  shall 
be  annexed,  that  the  said  list  contains  the  names  of  the  crew,  together  with  the  places 
of  their  birth  and  residence,  as  far  as  he  can  ascertain  them  ;  and  the  said  collector 
shall  deliver  him  a  ccrtiKed  copy  thereof,  for  which  the  collector  shall  be  entitled  to 
receive  tlie  sum  of  twenty-five  cents;  and  the  said  master  shall  moreover  enter  into 
bond  with  sufficient  security,  in  the  sum  of  four  hundred  dollars,  that  he  shall  exhibit 
the  aforesaid  certified  copy  of  the  list  to  the  first  boarding  officer,  at  the  first  port  in 
the  United  States  at  which  he  shall  arrive  on  his  return  thereto,  and  then  and  there 
also  produce  the  persons  named  therein,  to  the  said  boarding  officer,  whose  duty  it 
shall  be  to  examine  the  men  with  such  list,  and  to  report  the  same  to  the  collector ; 
and  it  shall  be  the  duty  of  the  collector  at  the  said  port  of  arrival,  (where  the  name  is 
diff'erent  from  the  port  from  which  the  vessel  originally  sailed,)  to  transmit  a  copy  of 
the  list  so  reported  to  him,  to  the  collector  of  the  ytort  from  which  said  vessel  originally 
sailed."  But  the  bond  was  not  to  be  forfeited  if  it  ajjpeared  that  any  seaman  was  not 
produced,  because  discharged  in  a  foreign  country  with  the  consent  of  the  consul,  or 
because  of  the  death  of  such  seaman,  or  his  having  absconded,  or  been  impressed  into 
other  service.  The  Act  of  July  20,  1840,  c.  23,  required  the  master  to  produce  the  list 
above-mentioned  to  "  any  consul,  or  other  commercial  agent  of  the  United  States, 
whenever  he  may  deem  their  contents  necessary  to  discharge  the  duties  imposed  upon 
him  by  law  toward  any  mariner  applying  to  him  for  his  aid  or  assistance." 

-  Act  of  1803,  Feb.  28,  c.  62,  §  3,  "  That,  whenever  a  ship  or  vessel,  belonging  to  a 
citizen  of  the  United  States,  shall  be  sold  in  a  foreign  country,  and  the  company  dis- 
charged, or  when  a  seaman  or  mariner,  a  citizen  of  the  United  States,  shall,  with  his 
own  consent,  be  discharged  in  a  foreign  country,  it  sliall  be  the»duty  of  the  master  or 
commander  to  produce  to  the  consul,  vice-consul,  commercial  agent,  or  vice-conmiercial 
agent,  for  every  seaman  or  mariner  so  discharged,  being  designated  on  such  list  as  a 
citizen  of  the  United  States,  three  months'  pay,  over  and  above  the  wages  wiiich  may 
tlien  be  due  to  such  mariner  or  seaman,  two  thirds  thereof  to  be  paid  by  sueii  consul 
or  commercial  agent,  to  such  seaman  or  mariner  so  discharged,  upon  his  engagement 
on  board  of  any  vessel  to  return  to  the  United  States,  and  the  other  remaining  third  to 
be  retained  for  the  purpose  of  creating  a  fund  for  the  payment  of  passages  of  seamen 
or  mariners,  citizens  of  the  United  States,  who  may  be  desirous  of  returning  to  the 
United  States,  and  for  tlie  maintenance  of  American  seamen  who  maybe  destitute  and 
may  be  in  such  foreign  port."  The  Act  of  July  20,  1840,  c.  23,  allows  a  consul,  upon 
the  application  both  of  the  master  of  a  vessel  and  of  a  mariner  under  him,  to  discharge 
such  mariner,  if  he  thinks  it  expedient,  without  requiring  the  payment  of  three  months' 
wages.  In  Emerson  v.  Howland,  1  Mason,  4.5,  it  was  held  that  where  seamen  were 
discharged  abroad,  without  the  payment  of  the  three  months'  wages  required  by  the 
above  act,  on  a  libel  for  wages  against  the  owners  of  the  vessel,  the  court  would  enforce 
the  payment  of  the  three  months'  wages.  See  also,  Orne  v.  Townsend,4  Mason,  541. 
But  in  Ogden  v.  Orr,  12  Johns.  143,  the  court  refused  to  sustain  an  action  at  law 
brought  by  a  seaman  discharged  by  his  own  consent,  in  a  foreign  port,  against  the 
owners  of  a  vessel,  to  recover  two  thirds  of  the  tliree  months'  wages.  The  ground 
taken  by  the  court  was  that  tiie  statute  docs  not  require  the  master  to  pay  the  money  to 
the  seaman,  but  to  the  consul,  and  that  the  payment  was  in  the  nature  of  a  penalty  for 
the  discharge  of  American  seamen  in  foreign  countries. 

3  The  Dawn,  Ware,  485,  S.  C.  Daveis,  121  ;-The  Juniata,  Gilpin,  193.    But  it  was 


en.  XVII.]  OF   TUE   LAW   OF   SHIPPING.  395 

pair  the  ship  if  possible,'  or  to  obtain  her  restoration,  if  captured. 
And  the  seamen  may  hold  on  for  a  reasonable  time  for  this  pur- 
pose, and  if  discharged  before,  may  claim  the  extra  wages.^ 
Our  consuls  and  commercial  agents  may  authorize  the  discharge 
of  a  seaman  abroad  for  gross  misconduct,  and  he  then  has  no 
claim  for  the  extra  wages.^  On  the  other  hand,  if  he  be  treated 
cruelly,  or  if  the  ship  be  unseaworthy  by  her  own  fault,  or  if  the 
master  violate  the  shipping  articles,  the  consul  or  commercial 
agent  may  direct  the  discharge  of  the  seaman ;  and  he  then 
has  a  right  to  these  extra  wages,  and  this  even  if  the  seaman 
had  deserted  the  ship  by  reason  of  such  cruelty.'^  They  may 
also  send  our  seamen  home  in  American  ships,  which  are  bound 
to  bring  them  for  a  compensation  not  to  exceed  ten  dollars  each, 
and  the  seaman  so  sent  must  work   and  obey  as  if  originally 

held  that  tlio  burden  was  on  the  owner,  if  he  would  exempt  himself  from  payment,  to 
show  that  tlic  sale  was  rendered  necessary  by  unavoidable  accident. 

1  The  Dawn,  Ware,  485;  The  Juniata,  Gilpin,  193  ;  The  Saratoga,  2  Gall.  164. 

2  In  the  Saratoga,  2  Gall.  164,  >'>ioyi/,  J.,  said:  "  It  has  been  farther  argued,  that  by 
the  capture,  the  relation  between  the  owners  and  mariners  ceases ;  so  that  the  latter  are 
not  bound  to  remain  by  the  ship,  but  are  at  liberty,  without  the  imputation  of  desertion, 
to  abandon  the  voyage.  Without  deciding  whether  the  rule  assumed  in  some  of  our 
own  courts  be  not  more  reasonable,  that  the  mariners  are  bound  to  remain  by  the  ship 
until  a  first  adjudication,  (Brig  Elizabeth,  Peters,  128  ;)  it  is  clear  that  the  mariner  is 
not  bound  to  leave  the  ship.  He  has  a  right  to  remain  by  her  and  wait  the  event.  If 
restored,  he  is  entitled  to  his  wages,  if  the  ship  proceed  and  earn  a  freight ;  if  condemned, 
he  may  lose  his  wages,  though  perhaps,  under  circumstances,  with  a  recompense  for  his 
actual  services,  pending  the  prize  proceedings."  But  see  Lemon  v.  Walker,  9  Mass. 
403;  Alfridson  v.  Ladd,  12  Mass.  173. 

3  Under  the  Act  of  Feb.  28, 1803,  c.  62,  "a  discharge  of  a  seaman  in  a  foreign  port,  in 
order  to  justify  a  master  for  not  producing  him  on  the  return  of  the  vessel,  must  have 
been  with  the  consent  of  the  consul,  vice-consul,  commercial  agent,  or  vice-commercial 
agent,  there  residing,  signified  in  wruing  under  bis  hand  and  official  seal."  Any  great 
misconduct  only  will  justify  a  master  in  putting  an  end  to  the  contract  with  seamen. 
In  Hutchinson  v.  Coombs,  Ware,  65,  70,  Ware,  J.,  after  admitting  that  by  the  marine 
law  a  master  could,  in  certain  cases,  turn  a  mariner  out  of  the  vessel,  said  :  "But  this 
he  cannot  do  for  slight  or  venial  oftenees,  and  certainly  not  for  a  single  offence,  unless 
of  a  very  aggravated  character.  The  cases  stated  in  which  a  master  is  permitted  to 
discharge  a  seaman  are,  when  he  is  incorrigibly  disobedient,  and  will  not  submit  to  do 
his  duty;  Thorne  v.  White,  1  Peters,  Adm.  175;  or  if  he  is  mutinous  and  rebellious, 
and  persists  in  such  conduct ;  Eelf  c?  al.  v.  The  Maria,  1  Peters,  186;  or  guilty  of  gross 
dishonesty,  as  embezzlement  or  theft ;  Black  v.  The  Louisiana,  2  Peters,  268  ;  or  if  he 
is  an  liabitual  drunkard,  and  a  stirrer  up  of  quarrels  and  broils,  to  the  destruction  of 
the  discipline  of  the  crew;  or  by  his  own  fault  renders  himself  incapable  of  performing 
his  duty."  See  also,  Orne  r.  Townsend,  4  Mason,  451 ;  Smith  v.  Treat,  Daveis,  266; 
Whiton  I!.  The  Ship  Commerce,  1  Peters,  Adm.  164;  Atkyns  r.  Burrows,  1  Peters, 
Adm.  244  ;  The  Nimrod,  Ware,  9.  Only  gross  misconduct  or  disobedience  will  justify 
a  master  in  discharging  a  mate  or  other  otBcer.  Atkyns  v.  Burrows ;  The  Exeter, 
2  Rob.  261  ;  Thompson  v.  Busch,  4  Wash.  C.  C.  338. 

*  Act  of  July  20,  1850.  As  to  what  acts  of  cruelty  will  justify  a  seaman  in  deserting, 
see  Steele  v.  Thachcr,  Ware,  91  ;  Sherwood  v.  Mcintosh,  Ware,  109.  In  Ward  v. 
Ames,  9  Johns,  138,  it  was  held  that,  if  a  seaman  is  compelled  to  leave  the  ship,  on 
account  of  ill  usage  and  cruel  treatment  by  the  master,  it  is  not  a  case  of  voluntary 
desertion,  and  the  seaman  is  entitled  to  recover  at  common  law  his  full  wages  for  the 
whole  voyage. 


396  ELEMENTS    OF    MERCANTILE   LAW.  [CH.   XVII. 

shipped.'  Besides  this,  if  a  master  discharges  a  seaman  in  a 
foreign  port,  he  is  liable  to  a  fine  of  five  hundred  dollars,  or  six 
months  imprisonment.'-^  And  a  seaman  may  recover  full  indem- 
nity or  compensation  for  his  loss  of  time,  or  expenses  incurred 
by  reason  of  such  discharge.^ 

Seventh.  As  to  the  regulation  of  punishment,  flogging  has  been 
abolished  and  prohibited  by  law.  This  includes  the  use  of  the 
cat,  or  a  similar  instrument,  but  not  necessarily  blows  of  the 
hand,  or  a  stick,  or  a  rope.^    Desertion,  in  maritime  law,  is  distin- 

1  Act  of  Feb.  28,  1803,  c.  62,  §  4.  The  act  provides  a  penalty  of  one  hundred 
dollars,  in  case  any  master  refuses  to  bring  home  destitute  seamen.  In  Matthews  v. 
Offley,  3  Sumner,  115,  it  was  held  that  an  action  for  this  penalty  must  be  brought  in 
the  name  of  the  United  States. 

'^  Act  of  1825,  c.  276,  §  10.  In  United  States  v.  Netcher,  1  Story,  307.  Story,  J., 
after  citing  the  tenth  section  of  the  above  act,  said:  "  In  my  judgment,  this  section 
enumerates  three  distinct  and  independent  offences.  1.  The  maliciously  and  without 
justifiable  cause,  forcing  any  officer  or  mariner  on  shore  in  any  foreign  port.  2.  The 
maliciously  and  without  justifiable  cause,  leaving  such  officer  or  mariner  on  shore  in 
any  foreign  port.  3.  Tlie  maliciously  and  without  justifiable  cause,  refusing  to  bring 
liome j:\gain  all  the  officers  and  mariners  of  the  ship  in  a  condition  to  return,  and  Avilljng 
to  return  on  the  homeward  voyage."  See  also  United  States  v.  Ruggles,  5  Mason, 
192;  United  States  v.  Coffin,  1   Sumn.  394. 

3  In  Emerson  v.  Howland,  1  Mason,  45,  53,  Storij,J.,  said  :  "  In  some  of  the  adjudged 
cases,  indeed,  wages  up  to  the  successful  termination  of  the  voyage,  have  been  allowed; 
in  otliers.  wages  up  to  the  •return  of  the  seaman  to  the  country  where  he  was  originally 
shippcil,  widiout  reference  to  the  termination  of  the  voyage.  The  Beaver,  3  Rob.  92; 
Tiiu  Ship  Exeter,  2  Rob.  261  ;  Hoyt  v.  Wildfire,  3  Johns.  518 ;  Brooks  v.  Dorr,  2  Mass. 
39  ;  Ward  i\  Ames,  9  Johns.  138;"  Sullivan  v.  Morgan,  11  Johns.  66  ;  The  Polly  and 
Kitty,  2  Peters,  Adm.  420,  423,  note  ;  The  Glocester,  2  Peters,  Adm.  403,  406,  note  ; 
The  Little  John,  1  Peters,  Adm.  115,  119,  120.  But  these  apparent  contrarieties  are 
easily  reconcilable,  when  the  circumstances  of  each  case  are  carefully  examined.  In 
all  tlie  cases,  a  compensation  is  intended  to  be  allowed,  which  shall  be  a  complete 
indemnity  for  the  illegal  discharge,  and  this  is  ordinarily  measured  by  the  loss  of  time, 
and  the  expenses  incurred  by  xhc  party.  It  is  presumed  that  after  his  return  home,  or 
after  the  lapse  of  a  reasonable  time  for  that  purpose,  the  seaman  may,  without  loss, 
engage  in  the  service  of  other  persons,  and  where  this  happens  to  be  the  case,  wages 
arc  allowed  only  until  his  return,  although  the  voyage  may  not  then  have  terminated. 
On  the  other  hand,  if  the  voyage  have  terminated  before  his  return,  or  before  a  reason- 
able time  for  that  purpose  has  elapsed,  wages  are  allowed  up  to  the  time  of  his  return, 
for  otiierwise  he  would  be  witliout  any  adequate  indemnity.  Cases,  however,  may 
occur,  of  sucli  gross  and  harsh  misbcliavior,  or  wanton  injustice,  as  miglit  require  a 
more  ample  compensation  than  could  arise  from  either  rule."  The  expenses  of  the 
seaman's  return  are  allowed  in  addition  to  his  wages  ;  but  from  these  expenses  his  in- 
termediate earnings  may  be  deducted.  Hutcliinson  v.  Coombs,  Ware,  65.  Where 
seamen  were  turned  off  from  a  privateer  witii  lawful  cause,  they  were  held  to  be 
entitled  to  their  proportion  of  the  prizes  taken  during  their  absence.  MahooB  v.  The 
Glocester,  2  Peter's  Adm.  403. 

*  The  Act  of  March  3,  1835,  prohibited  the  beating,  wounding,  or  imprisoning  of 
seamen,  from  malice,  hatred,  or  revenge,  and  without  justifiable  cause.  In  United 
States  V.  Cutler,  1  Curtis,  502,  where  the  master  was  indicted  under  that  act  for  beating 
a  seaman,  Curtis,  J.,  said:  '-The  government  must  prove:  1.  The  beating;  2.  The 
want  of  justifiable  cause;  3.  Malice."  But  the  Act  of  September,  1850,  c.  80,  contains 
this  clause:  "Pi-ovided,  that  flogging  in  the  navy,  and  on  board  vessels  of  commerce, 
be,  and  the  same  hereby  is  abolished,  from  and  after  the  passage  of  tliis  act."  Mr.  Justice 
Curtis,  in  a  charge  to  the  grand  jury,  delivered  at  Providence,  R.  I.,  November  15, 1853, 
instructed  them  that  the  words  '•  vessels  of  commerce,"  in  the  above  statute,  included  ves- 
sels engaged  in  the  whale  and  other  fisheries  ;  that  the  word  "  flogging  "  referred  only  to 


I 


OH.  XVII.]  OF  THE   LAW  OF   SFIIPPING.  397 

guished  from  absence  without  leave,  by  the  intention  not  to  re- 
turn. This  intention  is  inferred  from  a  refusal  to  return.'  If  he 
returns,  and  is  received,  this  is  a  condonation  of  the  offence,  and 
is  a  waiver  of  the  forfeiture.^  If  he  desert  before  the  voyage 
begins,  he  forfeits  the  advanced  wages,  and  as  much  more  ;^  but 
he  rnay  be  apprehended  by  a  warrant  of  a  justice,  and  forcibly 
compelled  to  go  on  board,  and  this  is  a  waiver  of  the  forfeiture.^ 
By  desertion  on  the  voyage,  he  forfeits  all  his  wages  and  all  his 
property  on  board  the  ship,  and  is  liable  to  the  owner  for  all  dam- 
ages sustained  in  hiring  another  seaman  in  his  place.^ 

Desertion,  under  the  statute  of  the  United  States  on  this  sub- 

"  punishment  by  stripes  inflicted  with  a  cat-o'-nine-tails,  or  other  instrument  capable  of 
inflicting  the  same  kind  of  punishment,"  and  that  the  above  act  was  not  a  penal  law, 
and  that  no  indictment  could  be  framed  under  it.     1  Curtis,  509. 

1  In  Cloutman  v.  Tunison,  1  Sumn.  373,  375,  Storij,  J.,  said:  "  By  the  general  mari- 
time law,  desertion  from  the  ship  in  the  course  of  the  voyage,  is  held  to  be  a  forfeiture 
of  the  antecedent  wages  earned  by  the  party  ;  and  this  rule  is  equally  as  applicable  to 
the  officers  as  it  is  to  the  seamen  of  the  ship.  It  is  believed  that  this  rule  constitutes  a 
part  of  the  maritime  code  of  every  commercial  nation,  and  is  founded  upon  a  universal 
principle  of  public  policy.  But  still,  a  very  important  question  remains,  upon  which 
much  loose  and  unsatisfactory  opinion  seems  to  pervade  the  community.  It  is,  what, 
in  the  sense  of  the  maritime  law,  constitutes  desertion  1  It  is  commonly  enough  sup- 
posed, that  an  absence  from  the  ship,  without  leave  of  the  proper  officer,  or  in  disobe- 
dience of  his  orders,  constitutes  desertion.  But  this  is  certainly  a  mistake.  Deser- 
tion, in  the  sense  of  the  maritime  law,  is  a  quittitig  of  the  ship  and  her  service,  not 
only  without  leave,  and  against  the  duty  of  the  party,  but  with  an  intent  not  again  to 
return  to  the  ship's  duty.  There  must  be  the  act  of  quitting  the  ship,  animo  derelin- 
quendi,  or  animo  non  reveiiendi.  If  a  seaman  quits  the  ship  without  leave,  or  in  disobe- 
dience of  orders,  but  with  an  intent  to  return  to  duty,  however  blamable  his  conduct  may 
be,  and  it  is  certainly  punishable  by  the  maritime  law,  not  only  by  personal  chastisement, 
but  bv  damages  bv  way  of  diminished  compensation — [see  1  Valin,  Comm.  Lib.  2,  tit. 
7,  art'  3,  p.  534 ;  The  Ship  Mentor,  4  Mason,  84  ;  3  Kent,  Comm.  §  46,  p.  198,  199,  (2d 
edition)] — it  is  not  the  offence  of  desertion  to  which  the  maritime  law  attaches  the 
extraordinary  penalty  of  forfeiture  of  all  antecedent  wages."  It  was  also  held,  that  the 
desertion  must  be  during  the  voj-age,  and  hence  that  leaving  the  vessel,  after  she  had 
arrived  at  her  last  port  of  destination,  and  is  moored  in  good  safety  in  the  proper  and  ac- 
customed place,  is  not  desertion,  although  it  is  a  violation  of  the  obligation  to  attend 
to  the  unlivery  of  the  cargo.  See  also  Coffin  v.  Jenkins,  3  Story,  108;  The  Rovena, 
Ware,  309;  The  Bulmcr,  1  Hagg.  163  ;  The  Mentor,  4  Mason,  84;  The  Two  Sisters, 

2  W.  Bob.  125  ;  The  Pearl,  5  Rob.  224. 

2  Miller  v.  Brant,  2  Camb.  590 ;  Beale  v.  Thompson,  4  East,  546  ;  Train  v.  Bennett, 

3  Car.  &  Payne,  3.  In  Cloutman  v.  Tunison,  1  Sumner,  373,  376,  Stori/,  J.,  said : 
"  And  even  in  a  case  of  clear  desertion,  if  tlie  party  repents  of  his  offence,  and  seeks  to 
return  to  duty,  and  is  ready  to  make  suitable  apologies,  and  to  repair  the  injuries  sus- 
tained by  his  misconduct,  he  is  entitled  to  be  received  on  board  again,  if  he  tenders  his 
services  "in  a  reasonable  time,  and  before  another  person  has  been  engaged  in  his  stead, 
and  his  prior  conduct  has  not  been  so  flagrantly  wrong,  that  it  would  justify  his  dis- 
charge." 

3  Act  of  July  20,  1790,  §  2  ;  Cotel  r.  Hilliard,  4  Mass.  664.  But  absence,  with  the 
leave  of  the  master,  will  not  work  such  forfeiture. 

*  Act  of  July  20,  1790,  §  7 ;  Bray  v.  Ship  Atalanta,  Bee,  48 ;  Turner's  case,  Ware, 
83.  The  Act  of  INIarch  2,  1829,  provides  for  the  apprehension  and  delivery  of  deserters 
from  foreign  vessels.     See  In  re  Bruni,  1  Barb.  187. 

s  Cloutman  v.  Tunison,  1  Sumner,  373;  Coffin  v.  Jenkins,  3  Story,  108;  The  Ro- 
vena, Ware,  309 ;  Spencer  v.  Eustis,  21  Maine,  519. 

34 


398  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVII. 

ject,  seems  to  be  a  continued  absence  from  the  ship  for  more 
than  forty-eight  hours,  without  leave  ;  and  there  must  be  an 
entry  in  the  log-book  of  the  time  and  circumstances.^  But  any 
desertion  or  absence  without  leave,  at  a  time  when  the  owner 
has  a  right  to  the  seaman's  service,  is  an  offence  by  the  law  mer- 
chant, giving  the  owner  aright  to  full  indemnity .^ 


SECTION  XI. 

OF   PILOTS. 

An  act  of  Congress  authorizes  the  several  States  to  make 
their  own  pilotage  laws ;  ^  and  questions  under  these  laws  are 
cognizable  in  the  State  courts.*  No  one  can  act  as  pilot,  and 
claim  the  compensation  allowed  by  law  for  the  service,  unless 
duly  appointed.  And  he  should  always  have  with  him  his  com- 
mission, which  usually  designates  the  largest  vessel  he  may  pilot, 

1  Act  of  July  20,  1790,  §  5.  lu  Cloutman  v.  Tunison,  1  Sumner,  381,  Storij,  J.,  said: 
"  To  work  the  statute  forfeiture,  it  is  made  an  indispensable  condition,  that  the  mate,  or 
other  officer  having  charge  of  the  log-book,  should  make,  an  entry  therein  of  the  name 
of  such  seaman,  on  the  day  on  which  he  shall  so  absent  himself;  and  the  entry  must 
not  merely  state  his  absence,  but  that  he  is  absent  without  leave.  The  entry  on  the 
very  day  is,  therefore,  a  sine  qua.  non.^^  See  also  Coffin  v.  Jenkins,  3  Story,  108;  Snell 
V.  Brig  Independence,  Gilpin,  140;  Spencer  v.  Eustis,  21  Maine,  519;  Whitton  v.  Brig 
Commerce,  1  Peters,  Adm.  160;  Malone  v.  The  Brig  Mary,  1  Peters,  Adm.  139;  The 
Phcebe  v.  Dignum,  1  Wash.  C.  C.  48.  But  the  entry  on  the  log-book,  although  neces- 
sary, is  not  conclusive  evidence  of  desertion.  Jones  v.  Brig  Phoenix,  1  Peters,  Adm. 
201.  A  seaman  is  subject  to  the  penalty  for  desertion,  if  he  does  not  return  within 
forty-eight  hours,  although  he  may  have  been  prevented  by  the  sailing  of  the  ship. 
Coffin  V.  Jenkins,  3  Story,  108. 

2  In  Cloutman  v.  Tunison,  1  Sumner,  373,  a  desertion  was  not  shown,  but  the  second 
mate  was  absent  without  leave  during  the  unlivery  of  the  ship,  and  a  forfeiture  of  two 
months'  wages  was  decreed.     See  also  The  Baltic  Merchant,  Edwards,  Adm.  86. 

3  Act  of  Aug.  7,  1789,  c.  9,  §  4  ;  1  Stats,  at  Large,  ."54.  Section  4  of  this  Act  is  as 
follows:  "And  be  it  furtlicr  enacted,  that  all  pilots  in  the  bays,  inlets,  rivers,  harbors, 
and  ports  of  the  United  States,  shall  continue  to  be  regulated  in  conformity  with  the 
existing  laws  of  the  States  respectively  wherein  such  pilots  may  be,  or  with  such  laws 
as  the  States  may  respectively  hereafter  enact  for  the  purpose,  until  further  legislative 
provision  shall  be  made  by  Congress."  See  also  the  case  of  Gibbons  v.  Ogden,  9 
Wheat.  207.  By  the  Act  of  March  2,  1837,  pilots  on  the  waters  which  are  the  boun- 
daries of  two  States,  may  be  licensed  by  either  State,  and  may  be  employed  by  any 
vessel  going  into  or  out  of  any  port  situated  on  such  waters. 

*  Schooner  Wave  v.  Heyer,  2  Paine,  C.  Ct.  131;  Low  v.  Commissioners  of  Pilotage,  R. 
M.  Charlt.  (Geo.)  314.  But  in  the  case  of  Hobart  v.  Drogan,  10  Pets.  108,  Judge  Story 
held  that  the  United  States  courts  have  a  concurrent  jurisdiction  with  the  State  courts, 
to  entertain  suits  for  pilotage,  even  in  tlie  case  where  the  pilot's  compensation  is  estab- 
lished by  a  law  of  the  State  in  which  tlie  action  is  brought.  See  also  The  Schooner 
Anne,  1  Mason,  508 ;  Ross  v.  Walker,  2  Wilson,  264.  The  State  laws  respecting 
pilotage  are  not  in  derogation  of  the  common  law,  with  which  they  have  no  connection. 
They  are  ratlicr  to  be  classed  under  tlie  head  of  the  Maritime  Law,  and  are  entitled  to 
a  liberal  construction.    Per  Hubbard,  J.,  in  Smith  v.  Swift,  et  al.  8  Mete  332. 


en.  XVII.]  OF   TUE   LAW    OF   SIUPriNG.  399 

or  that  which  draws  the  most  water.'  If  a  pilot  oftcrs  himself 
to  a  ship  that  has  no  pilot,  and  is  entering  or  leaving  a  harbor, 
and  has  not  reached  certain  geographical  limits,  the  ship  must 
pay  him  pilotage  fees,  whether  his  services  are  accepted  or  not.^ 
As  soon  as  the  pilot  stands  on  deck,  he  has  control  of  the  ship.^ 
But  it  remains  the  master's  duty  and  power,  in  case  of  obvious 
and  certain  disability,  or  dangerous  ignorante  or  error,  to  disobey 
the  pilot,  and  dispossess  him  of  his  authority."^  If  a  ship  neglect 
to  take  a  pilot,  when  it  should  and  can  do  so,  the  owners  will  be 
answerable  in  damages  to  shippers  or  others  for  any  loss  which 
may  be  caused  by  such  neglect  or  refusal.^  Pilots  are  themselves 
answerable  for  any  damage  resulting  from  their  own  negligence 

1  Commonwealth  v.  Eickctson,  5  Mete.  417,  426;  Smith  v.  Swift  et  al.  8  Mete.  332. 

2  Law  V.  Hollingsworth,  7  Term,  160;  Phillips  v.  Headlam,  2  B.  &  Ad.  380;  The 
Batavieii,  2  Wm.  Rob.  411 ;  Bolton  et  al.  v.  American  Ins.  Co.  3  Kent's  Comm.  176, 
n.  (a.) ;  M'Millan  v.  U.  S.  Ins.  Co.  1  Rice,  (S.  C.)  248  ;  Commonwealth  v.  Ricketson, 
5  Mete.  412,  424  ;  Martin  v.  Hilton,  9  Mete.  371.  And  see  the  remarks  of  Shaiv,  C. 
J.,  in  Winslow  v.  Prince,  6  Cush.  370.  The  master  is  bonnd  to  approach  the  pilot- 
ground  carefully,  and  if  in  the  night,  he  must  hold  out  a  light,  and  wait  a  reasonable 
time  for  a  pilot,  and  approacli  one  if  he  can  do  so  with  safety.  Bolton  v.  Am.  Ins. 
Co.  supra.  If  lie  neglects  to  take  a  pilot  when  it  is  in  his  power  to  do  so,  and  a  loss 
happens  in  consequence,  the  insurers  are  discharged.  Phillips  i'.  Ilaadlam,  supra; 
M'Millan  r.  U.  S-  Ins.  Co.  supra.  But  see  the  case  of  Flanigen  v.  Washington  Ins.  Co. 
7  Barr.  (Penn.)  306.  If,  however,  the  master  at  a  foreign  port,  attempts  to  get  a  pilot 
and  fails,  he  may  then,  in  the  exercise  of  his  best  discretion,  endeavor  to  navigate  the 
vessel  himself  into  port.  And  for  a  loss  incurred  whilst  he  is  so  doing,  the  insurers 
remain  liable,  Phillips  v.  Headlam,  s^^my?.  It  is  not  necessary,  to  constitute  a  valid 
"  offer  of  his  services,"  that  the  pilot  sliould  go  on  board  and  tender  them  to  the  mas- 
ter. If  he  hail  the  vessel  when  the  pilot-boat  is  so  near  and  in  such  a  position  that 
the  hail  was  heard  on  board  the  sliip,  or  might  have  been,  if  the  officers  and  crew  had 
been  on  duty,  this  is  a  sufficient  offer  and  tender  of  services.  Commonwealth  v. 
Ricketson,  supra. 

'^  Snell  V.  Rich,  1  Johns.  305  ;  Yates  v.  Brown,  8  Pick.  23:  3  Kent's  Comm.  176. 

*  The  Duke  of  Manchester,  3  Wm.  Rob.  480.  In  this  ease,  Dr.  Luslungton  said: 
"  It  is,  I  conceive,  the  duty  of  the  master  to  observe  the  conduct  of  the  pild(feind  in  the 
case  of  i)alpable  incompetency,  whether  arising  from  intoxication  or  ignorance, *?Dr  any 
other  cause,  to  interpose  his  authority  for  the  preservation  of  the  property  of  his  em- 
ployers. In  such  a  case,  the  vessel  and  lives  of  the  crew  are  not  to  be  risked,  because 
there  is  a  law  wliicli,  under  ordinary  circumstances,  imposes  the  responsibility  upon  the 
pilot.  And  in  another  case  (The  Diana,  1  Wm.  Rob.  131)  where  the  master  and  mate 
of  the  vessel  had  given  up  the  entire  management  of  the  vessel  to  the  pilot,  and  were 
diverting  themselves  in  the  cabin  below,  when,  through  the  negligence  of  the  pilot,  a 
collision  occurred,  the  learned  judge  decided  that  the  accident  was  occasioned  by  the 
joint  misconduct  of  the  master,  mate,  and  pilot,  and  that  the  owners  were  responsible 
therefor.  But  it  is  only  in  extreme  eases,  that  the  master  is  warranted  in  interfering 
with  the  pilot  in  liis  proper  vocation.  Per  Dr.  Lushi))(](on  in  the  case  of  The  Maria,  1 
"Wm.  Rob.  110.  See  further  on  this  subject  the  dicta  in  the  cases  of  The  Joseph  Har- 
vey, 1  Rob.  311  ;  The  Girolamo,  3  Hagg.  169,  176;  The  Christina,  3  Wm.  Rob.  27; 
The  Lochlibo,  3  Wm.  Rob.  480.  And  see  U.  S.  v.  Forbes,  Crabbe,  558;  and  U.  S.  v. 
Lynch,  2  N.  Y.  Leg.  Obs.  51. 

5  Kceler  v.  Fireman's  Ins.  Co.  3  Hill,  250 ;  M'Millan  v.  U.  S.  Ins.  Co.  1  Rice,  (S.  C.) 
248.  And  in  an  English  case,  where  a  vessel,  seized  on  justifiable  grounds,  as  appeared 
by  the  condemnation  of  a  part  of  her  cargo,  was  lost  bj'  the  neglect  of  the  captors  to 
take  a  pilot  on  board,  the  Court  of  Admiralty  decreed  restitution  in  value  against 
them.    See  the  case  of  The  William,  6  Rob.  316". 


.  m 


400  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

or  default,  and  have  been  held  strictly  to  this  liability.^  The 
owner  is  also  liable,  on  general  principles,  for  the  default  of  the 
pilot,  who  is  his  servant.^ 


SECTION  XII. 

OF   MATERIAL   MEN. 

Maritime  law  so  calls  persons  employed  to  repair  a  ship  or 
furnish  her  supplies.  Such  persons,  and  indeed  all  who  work 
upon  or  about  her,  as  stevedores,  or  persons  employed  to  load  or 
unload  a  vessel,  have  a  lien  on  the  ship  for  their  charges.^  There 
is,  however,  this  important  distinction.  Material  men,  by  ad- 
miralty law,  have  a  lien  only  on  foreign  ships,  and  not  on  dbmes- 
tic  ships.^     But  many  of  our  States  have  by  statute  given  this 

1  Huggett  V.  Montgomery,  5  Bos.  &  Pul.  446.  But  he  will  be  exonerated  from  lia- 
bility, if  it  appear  that  the  accident  was  owing  neither  to  carelessness  nor  want  of  skill 
on  his  part,  but  to  a  simple  miscalculation,  where  the  most  prudent  man  might  have 
erred.     The  Constitution,  Gilpin,  579. 

-  The  Neptune,  1  Dods.  467  ;  The  Transit,  cited  in  the  case  of  Tiie  Protector,  1 
Wm.  Ptob.  4.5  ;  Yates  v.  Brown,  8  Pick.  23  ;  Williamson  v.  Price,  16  Martin,  (Lou.) 
399  ;  Bussy  v.  Donaldson,  4  Dall.  206 ;  Pilot-boat  Washington  v.  The  Saluda,  U.  S. 
Dist.  Ct.  S.  C.  April,  1831.  But  see  The  Protector,  1  Wm.  Rob.  45;  The  Maria,  ib. 
95  ;  The  Agricola,  2  Wm.  Rob.  10  ;  The  Lochlibo,  3  Wm.  Rob.  310. 

3  The  Neptune,  3  Hagg.  142  ;  Harper  v.  The  New  Brig,  1  Gilpin,  536  ;  The  Calisto, 
Daveis,  31.  "  By  the  general  maritime  law,"  said  Judge  Ware  in  the  latter  case,  "ma- 
terial men,  under  which  term,  in  the  language  of  admiralty,  are  included  all  persons 
who  supply  materials  or  labor  in  building  or  repairing  vessels,  or  furnish  supplies  which 
are  necessary  for  their  employment,  as  pi'ovisions  for  the  crew,  have,  in  addition  to  the 
personal  liability  of  the  debtor,  a  lien  on  the  vessel  for  their  security.  It  is  commonly 
said,  that  this  principle  was  borrowed  by  the  maritime,  from  the  civil  law ;  but  it  seems 
more  probaMe  tliat  it  originated  in  the  maritime  usages  of  the  middle  ages."  See  also 
Rich  V.  CoHKUowp.  636  ;  and  Farmer  v.  Davies,  1  Term,  109,  where  Lord  Mansfield  ex- 
pressed an  opinion,  that  a  person  who  supplies  a  ship  with  necessaries,  generally  has 
such  a  lien. 

■*  In  the  case  of  The  Zodiac,  1  Hagg.  325,  Lord  Stowell  remarked :  "  In  most  of  the 
countries  governed  by  the  civil  law,  repairs  and  necessaries  form  a  lien  on  the  ship 
herself.  In  our  country,  the  same  doctrine  had  for  a  long  time  been  held  by  the  mari- 
time courts,  but,  after  a  long  contest,  it  was  finally  overthrown  by  the  courts  of  com- 
mon law,  and  by  the  highest  judicature  in  the  country — the  House  of  Lords,  in  the 
reign  of  Charles  II."  The  leading  cases  to  this  effect  which  his  lordship  had  probably 
in  view,  were  Westerdell  v.  Dale,  7  Term,  312  ;  Iloare  v.  Clement,  2  Sbow.  338  ;  Jus- 
tin V.  Ballam,  1  Salk.  34,  and  Ld.  Raym.  805  ;  Watkins  v.  Bernadiston,  2  P.  Wms.  367  ; 
Wilkins  v.  Carmichael,  1  Dougl.  101 ;  Ex  parte  Hill,  1  Mad.  61  ;  Ex  parte  Shank,  1 
Atk.  234;  Wood  v.  Hamilton,  Abbott  on  Ship.  147.  It  has  been  suggested  that  these 
cases  left  it  doubtful  whether  this  doctrine  applies  or  not  to  the  case  of  a  foreign  ship 
repaired  in  England.  (Story's  note  to  Abbott,  p.  148.)  But  in  the  case  of  The  Neptune, 
3  Hagg.  140,  Sir  John  Nicholl  said  :  "If  an  English  ship  were  repaired  in  Prance  or 
Holland,  material  men  might  there  arrest  and  enforce  payment  against  the  ship  itself. 
How  far  a  foreign  ship,  repaired  here,  might  not  be  subject  to  the  same  right,  is  a  ques- 
tion which  it  is  not  necessary  now  to  inquire,  for  The  Neptune  is  a  British  ship,  and,  in 
such  cases  the  niunicipal  courts  of  this  country  have  so  fiir  departed  from  the  rule  of 
the  civil  law,  that  they  have  held  that  the  lien  does  not  extend  to  the  ship  itself; 


CH.  XVII.]  -  OF   THE   LAW   OF   SHIPPING.  401 

lien  to  material  men  on  all  ships,  without  distinction.^  It  has 
been  held,  that  such  a  lien  extends  beyond  mere  repairs,  —  cer- 
tainly to  alterations,  and  perhaps  to  reconstruction,  —  but  not  to 
original  building,  unless  the  statute  includes  ship-building.^     A 


and  so  fiir,  therefore,  this  court  is  restrained,  but  they  have  not  gone  further."  And  in 
an  earlier  case,  where  an  American  vessel  had  been  sold  in  Great  Britain  to  satisfy  the 
mariner's  claim  for  wages,  and  a  surplus  remaining  in  the  registry,  application  was 
made  on  behalf  of  the  material  men  to  the  court,  to  have  their  claims  satisfied  out  of 
the  proceeds,  and  the  above  distinction  between  repairs  to  British  and  foreign  vessels 
be  insisted  on,  the  court  said  :  "  I  tliink  that  circumstance  does  make  a  distinc- 
tion ;"  and  subsequently,  in  conformance  to  what  was  stated  to  have  been  the  practice 
of  the  court  under  similar  circumstances,  decreed  payment.  The  John,  3  Eob.  288. 
The  subject  is  now  regulated  by  an  Act  passed  in  1840.  In  this  country,  the  rule,  as 
stated  in  the  text,  is  well  settled  in  The  13rig  Eagle,  Bee's  Adm.  78  ;  The  Jerusalem,  2 
Gallis.  345  ;  Zane  v.  Brig  President,  4  Wash.  C.  C.  453  ;  The  Aurora,  1  Wheat.  105  ; 
The  General  Smith,  4  ib.  438;  The  St.  Jago  de  Cuba,  9  ib.  409,  416;  The  Calisto, 
Daveis,  32 ;  Davis  v.  Child,  id.  71  ;  The  Brig  Nestor,  1  Sumn.  79  ;  Eead  v.  The  Hull 
of  a  New  Brig,  I  Story,  245 ;  Leland  v.  Ship  Medora,  2  Wood.  &  Minot,  96 ;  The 
Barque  Chusan,  2  Story,  C.  C.  460;  Buddington  v.  Stewart,  14  Conn.  404;  Boon  i'. 
The  Hornet,  Crabbe,  426.  In  The  General  Smith,  supra,  Judge  iSiory  said  :  "  Where 
repairs  have  been  made,  and  necessaries  have  been  furnished  to  a  foreign  ship,  or  to  a 
ship  in  a  port  of  the  State  to  which  she  does  not  belong,  the  general  maritime  law,  fol- 
lowing the  civil  law,  gives  the  party  a  lien  on  the  ship  itself  for  his  security  ;  and  he  may 
well  maintain  a  suit  in  rem  in  the  admiralty,  to  enforce  ids  right.  But  in  respect  to 
repairs  and  necessaries  in  the  port  or  State  to  which  the  sliip  belongs,  the  case  is  gov- 
erned altogether  by  the  municipal  law  of  the  State  ;  and  no  lieu  is  implied  unless  it  is 
recognized  by  that  law.''  The  language  of  Justice  Ware,  in  The  Calisto,  supra,  is 
simijQir  in  eftect.  If,  when  the  supplies,  or  repairs  are  furnished  by  the  materialmen 
in  tne  belief  that  tlic  ship  belonged  to  a  foreign  port,  they  were  held  entitled  to  the 
benefit  of  the  lien,  although  such  was  not  her  actual  character,  as  against  the  owners 
who  had  contributed  to  the  acception,  and  even  against  the  claim  of  the  government, 
for  the  forfeiture  incurred  by  an  illegal  voyage.  The  St.  Jago  de  Cuba,  supra.  The 
benefit  of  this  lien  has  been  extended  to  the  leuder  of  money  to  procure  supplies  and 
repairs,  where  it  was  shown  that  it  had  been  actually  so  expended.  Davis  v-  Child, 
supra.  Where  the  shipwright  has  the  actual  possession  of  the  vessel,  wliether  foreign 
or  domestic,  for  the  purpose  of  repairing  her,  as,  where  she  is  in  his  dock,  he  is  entitled 
to  retain  it  till  he  is  paid.  Ex  parte  Bland,  2  Rose,  91 ;  Franklin  i\  Hosier,  4  B.  & 
Aid.  341 ;  Vibilia,  1  Wm.  Rob.  6  ;  The  General  Smith,  supra;  The  Brig  Nestor,  supra; 
The  Schooner  Marion,  1  Story,  72. 

1  Acts  of  New  York,  Aug.  10,  1798  ;  Purdon's  Dig.  79.  (Pennsylvania) ;  Mass.  Supt. 
to  Rev.  Stats.  475;  Acts  of  1855,  c.  231;  Rev.  Stats,  of  Maine,  (1841,)  n.  558;  Rev. 
Laws  of  Illinois,  (1838.)  95;  Rev.  Stats,  of  Indiana,  (1838,)  120;  Acts  of  Missouri, 
1838,  and  R.  C.  1845  ;  Acts  of  Alabama,  1836  and  1848 ;  Rev.  Stats,  of  Mich.  c.  122. 
In  Louisiana,  a  similar  privilege  exists  under  the  general  Spanish  law.  SeeBourcier 
V.  The  Schooner  Ann,  1  Mart.  165.  See  also  the  Civil  Code,  art.  2748,  and  the  case  of 
Peyroux  v.  Howard,  7  Pets.  (U.  S.)  341. 

'-^  See  the  case  of  Gould  v.  Thacher,  12  Law  Rep.  (2  N.  S.)  183,  in  which  Justice 
Sprague  remarked,  with  reference  to  the  Statute  Lien  of  1848,  in  Massachusetts,  which 
runs  as  follows  :  "  Whenever  a  debt  is  contracted  for  labor  performed  or  materials 
used  in  the  construction  or  repair  of,  or  etc.,  of  any  ship  or  vessel  within  this  common- 
wealth, such  debt  shall  be  a  lien  on  such  ship  or  vessel,  etc."  This  is  an  important 
question.  It  depends  mainly  on  the  meaning  of  the  term  "  construction  "  in  the 
statute,  for  the  libellant's  work  being  in  the  nature  of  "  alteration,"  cannot  well  be 
treated  as  "  repair,"  which  is  restoration.  We  must  look  to  the  intention  of  tiie  legis- 
lature. The  reason  of  the  statute  would  make  it  apply  to  alteration  and  reconstruc- 
tion as  well  as  original  construction  ;  if  the  latter  only  had  been  intended,  the  word 
"building"  would  seem  to  have  been  more  natural.  Suppose  a  ship  is  changed  from 
a  brig  to  a  bark,  or  internal  alterations  arc  made  to  fit  a  merchantman  for  a  whaleman; 
or  suppose  a  vessel  to  be  coppered,  for  the  first  time,  on  a  change  of  destination,  the 

34* 


402  ELEMENTS   OP   MERCANTILE   LAW.  [CH.  XVH. 

laborer,  employed  in  general  work  by  a  shipwright  or  mechanic, 
and  by  him  sometimes  employed  on  the  vessel  and  sometimes 
elsewhere,  gets  no  lien  on  the  vessel  for  that  part  of  the  labor 
performed  about  it.'  These  statute  liens  take  precedence  of  the 
claims  of  all  other  creditors.  They  may  be  enforced  either  in 
the  courts  of  the  State,  or  in  the  admiralty  court  of  the  district 
in  which  the  vessel  is  situated.^ 

reason  of  the  act  -would  apply  to  these  changes  as  much  as  to  repairs,  or  to  the  origi- 
nal building.  It  is  not  desirous,  on  practical  subjects  and  among  practical  men,  to 
create  nice  distinctions,  wliere  there  is  no  distinction  in  the  reason  of  the  statute. 

1  The  Calisto,  Daveis,  29.  See  further  on  the  construction  of  these  statutes,  South- 
wick  V.  racket-boat  Clyde,  6  Blackf.  148;  The  Hull  of  a  New  Ship,  Daveis,  199 ;  The 
Calisto,  s»7Jra ;  The  Ship  Robert  Fulton,  1  Tainc,  C.  C.  620;  George  v.  Skeates,  19 
Ala.  738;  Lawson  v.  Higgins,  1  Mann.  (Mich.)  225  ;  Sarchet  v.  Sloop  Davis,  Crabbe, 
185  ;  Smith  v.  Steamer  Eastern  R.  R.  1  Curtis,  C  C.  253;  Bailey  v.  Steamboat  Con- 
cordia, 17  Mis.  357. 

2  Peroux  V.  Howard,  7  Pets.  (U.  S.)  341  ;  Davis  v.  A  New  Brig,  1  Gilp.  473  ;  Phillips 
V.  Scattergood,  id.  6 ;  The  Hull  of  a  New  Ship,  1  Daveis,  201  ;  Davis  v.  Child,  Da- 
veis, 74.  In  The  Schooner  Marion,  Stonj,  J.,  said  :  "  This  is  a  libel  against  a  domestic 
ship,  for  materials  furnislied  and  repairs  made  upon  her,  in  the  port  of  New  Bedford, 
in  tins  district,  to  which  port  she  belonged  at  the  time  of  the  repairs.  Under  such  cir- 
cumstances, it  is  admitted  that  no  lien  attaches  upon  the  ship  by  the  general  maritime 
law,  as  far  as  it  is  recognized  and  enforced  in  the  courts  of  England  and  America.  But 
the  admiralty  courts  of  this  country  possess  a  general  jurisdiction  in  all  cases  of  mate- 
rial men  and  shipwrights,  for  work  done,  and  materials  furnished  for  ships  engaged  or 
employed  in  maritime  commerce  and  navigation,  which  may  be  exercised  in  personam 
at  all  times  ;  but  can  be  exercised  in  rem  only  upon  the  maritime  law,  or,  in  its  si^nce, 
where  the  local  law  of  the  State  or  country  where  the  work  or  materials  are  applied, 
gives  a  lien.  Since  the  decisions  made  in  the  Supreme  Court,  the  question  is  not,  how 
the  lien  arises  under  the  local  law,  whether  it  be  by  statute,  or  by  the  common  or  by 
the  municipal  law.  That  is  wholly  immaterial.  The  lien  is  enforced  because  it  is  of  a 
maritime  nature ;  and  the  moment  its  existence  is  established,  the  jurisdiction  of  the 
admiralty  attaches  to  it  propria  vigore."  See  also  Gould  v.  Thacher,  12  Law  Rep. 
(2  N.  S.)  183. 


CH.  XVIII.]  OF  MARINE   INSURANCE.  403 


CHAPTER   XVIII. 

OF  MARINE  INSURANCE. 

SECTION  I. 

now   THE    CONTRACT   OF   INSURANCE   IS   MADE. 

At  the  present  day  Insurance  is  seldom  made  by  individuals. 
Formerly,  this  was  the  universal  custom  in  our  commercial  cities. 
Afterwards,  companies  were  incorporated  for  the  purpose  of 
making  insurance  on  ships  and  their  cargoes ;  and  the  manifold 
advantages  of  this  method  have  caused  it  to  supersede  the  other. 

The  contract  of  insurance  binds  the  insurer  to  indemnify  the 
insured  against  loss  or  injury  to  certain  property  or  interests 
which  it  specifies,  from  certain  perils  which  it  also  specifies.  The 
consideration  for  this  obligation  on  the  part  of  the  insurer  is  the 
premium  paid  to  the  insurer,  or  promised  to  be  paid  to  him  by 
the  insured.^  The  instrument  in  which  this  contract  is  expressed 
is  called  a  Policy  of  Insurance.  But  no  instrument  is  essential 
to  the  validity  of  the  contract;  for  if  the  proposals  of  the  in- 
sured are  written  in  the  usual  way  in  the  proposal  book  of  the 
insured,  and  signed  by  their  officer  with  the  word  "done"  or 
"  accepted,"  or  in  any  way  to  indicate  that  the  bargain  is  made, 
it  is  valid,  although  no  policy  be  delivered ;  -  and  would  be  con- 
strued as  an  insurance  upon  the  terms  expressed  in  the  policy 
commonly  used  by  that  company.  We  think  a  contract  of  insur- 
ance which  was  merely  oral,  if  otherwise  unobjectionable,  would 
be  valid.     But  on  this  subject  there  is  a  diversity  of  opinion.^     If 

1  Emerigon  says,  "  The  word  premium  comes  either  from  the  word  prcemium,  signi- 
fying price,  or  from  the  M'ord  primd,  because  formerly  the  premium  was  paid  before 
all,  and  at  the  time  of  signing  the  policy."     Ch.  3,  sect.  1. 

2  Kohne  v.  Ins.  Co.  of  North  America,  1  Wash.  C.  C.  93;  Blanchard  v.  Waite,  28 
Maine,  51  ;  Loring  t'.  Proctor,  26  Maine,  22.  The  contract  may  be  contained  in  let- 
ters. Tayloe  v.  Merch.  Fire  Ins.  Co.  9  How.  390 ;  M'CuUoch  r.  The  Eagle  Ins.  Co. 
1  Pick.  278. 

**  There  seems  to  be  ho  reason  why  the  general  principle  both  of  the  common  and 
of  the  civil  law,  that  the  evidence  of  a  contract  need  not  be  in  writing,  unless  expressly 
required  so  to  be,  scripiura  necessaria  non  est,  nisi  lex  eum  exprcssi  requirat,  should  not 


40-!:  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII. 

proposals  are  made,  on  either  side,  iDy  letter,  and  accepted  by  the 
other  party,  also  by  letter,  this  is  a  valid  contract  of  insurance  as 
soon  as  the  party  accepting  has  mailed  his  letter  to  that  effect, 
if  he  have  not  previously  received  notice  of  a  withdraw^al  of  the 
proposals.^ 

The  form  of  the  policy  is  generally  that  which  has  been  used 
for  many  years  both  in  England  and  in  this  country,  with  such 
changes  and  modifications  only  as  will  make  it  express  more 
accurately  the  bargain  between  the  parties.  And  for  this  pur- 
pose it  may  be  and  is  varied  at  pleasure. 

It  is  subscribed  only  by  the  insurers  ;  but  binds  both  parties.^ 

make  a  parol  contract  of  insurance  valid.  See  Smith  v.  OdILn,  4  Yeates,  468  ;  Walden 
V.  Louis.  Ins.  Co.  12  La.  134;  and  Cockerill  v.  Cincinnati  Mut.  Ins:  Co.  16  Ohio,  148. 
In  tiic  last  case  it  was  not  necessary  to  decide  the  question,  as  the  charter  of  the  com- 
pany required  the  contract  to  be  in  writing.  In  England,  the  contract  is  required  to  be 
in  writing.  Stat.  35,  Geo.  3,  c.  63.  And  a  writing  is  necessary  under  several  foreign 
codes,  although  in  the  absence  of  express  provisions  it  would  not  be.  See  Emerigon, 
c.  1,  §  1.  In  JMcCuUoch  v.  Eagle  Ins.  Co.  1  Pick.  280,  Parker,  C  J.,  says :  "  And  it  is 
certain  tliat  if  a  contract  was  made,  the  mere  want  of  a  policy  will  not  prevent  the 
plaintiff  from  recovering."  In  Hamilton  v.  Lycoming  Mut.  Ins.  Co.  5  Barr.  339,  a 
parol  agreement  to  insure  was  enforced.  See  also  Tayloe  v.  Merchants'  Ins.  Co.  9 
How.  390.  The  language  of  the  court  in  the  case  of  Keal  Estate  Mut.  Fire  Ins.  Co.  v. 
Eoessle,  1  Gray,  336,  seems  to  imply  that  the  contract  would  not  be  complete  till  the 
policy  should  be  delivered.  The  action  was  brought  by  the  company  to  recover  the 
amount  of  the  premiums,  deposit  notes,  and  assessments  upon  two  policies  of  insur- 
ance. The  policies  were  made  out,  but  the  defendant  refused  to  receive  them.  The 
case  was  submitted  without  argument,  and  no  authorities  are  cited  by  the  court.  The 
judgment  was  for  the  defendant.  Mr.  Justice  Dewey,  in  delivering  the  opinion  of  the 
court,  puts  this  question :  "  Suppose  a  loss  by  fire  had  occurred,  and  the-  buildings,  the 
subject  of  the  proposed  insurance,  had  been  destroyed,  would  any  liability  have  thereby 
attached  to  the  plaintiffs,  by  reason  of  these  policies  1  Clearly  not ;  because  they  had 
not  been  delivered  to  the  defendant."  The  question  came  before  Mr.  Justice  Curtis  in 
the  Circuit  Court,  in  the  case  of  The  Union  Mut.  Ins.  Co.  v.  The  Commercial  Mut. 
Mar.  Ins.  Co.  (Law  Reporter,  March,  1856,  p.  610.)  A  bill  in  equity  was  brought  by 
the  complainants  to  compel  the  specific  performance  of  a  contract  for  re-insurance  on 
The  Great  Republic.  The  agent  of  the  plaintiffs  went  to  the  oflice  of  the  defendants 
on  the  24th  of  December.  The  president  not  being  in,  he  filled  up  a  blank  proposal  in 
the  usual  form.  He  called  again  that  day  and  saw  the  president  who  offered  to  make 
the  insurance  at  a  certain  rate.  The  agent  said  he  would  consult  with  his  principal,  to 
which  the  pre'sident  assented ;  and  on  Monday,  the  26th,  receiving  an  answer  accepting, 
he  saw  the  president  and  told  him  that  the  offer  was  accepted.  The  rate,  as  agreed  on, 
was  inserted  in  the  proposal.  That  night  the  vessel  was  destroyed  by  fire.  The  pro- 
posal was  in  the  usual  form,  with  "  Binding,"  and  a  blank  left  for  the  president's  name. 
This  blank  had  not  been  filled  up.  Mr.  Justice  Curtis  held  that  the  contract  was  com- 
plete as  soon  as  the  proposal  was  accepted. 

1  Tayloe  v.  Merchants'  Ins.  Co.  9  How.  390  ;  Dunlop  v.  Higgins,  1  House  of  Lords 
Cas.  381;  Duncan  i'.  Topham,  8  C.  B.  225  ;  Mactier  ;;.  Frith,  '6"Wend.  103.  The  case 
of  McCulloch  V.  Eagle  Ins.  Co.  1  Pick.  281,  has  not  been  sustained  by  subsequent 
.cases.     See  1  Parsons  on  Cont.  406,  and  the  cases  there  cited. 

2  Ins.  Co.  of  Penn.  v.  Smith,  3  Whart.  526,  529 ;  Patapsco  Ins.  Co.  v.  Smith,  6  Har. 
&  Johns.  166.  But  the  obligation  of  the  assured  diftcrs  from  that  of  the  underwriter. 
No  action  can  be  maintained  against  the  former  for  the  breach  of  any  condition  con- 
tained in  the  policy.  Although  the  policy  may  liave  been  signed  and  accepted  by  the 
assured,  he  will  not  be  liable  for  the  premium,  unless  he  chooses  to  have  the  risk  com- 
mence.    Tyrie  i'.  Fletcher,  Cowper,  666  ;  MoUoy,  b.  2,  c.  7.  §  12  ;  Emerigon,  c.  3,  H- 


I 


CII.  XVIII.]  OF   MARINE   INSURANCE.  405 

The  insured  are  bound  for  the  premium,  although  no  note  is  given.' 
The  date  may  be  controlled  by  evidence  showing  when  it  was 
made  and  delivered  ;  and  if  delivered  after  its  date,  it  takes  effect 
at  and  from  its  date  if  that  were  the  intention  of  the  parties.^ 

It  may  be  effected  on  application  of  an  agent  of  the  insured, 
if  he  have  full  authority  for  this  purpose ;  which  need  not  be  in 
writing.  But  a  mere  general  authority,  even  if  it  related  to  com- 
mercial matters,  or  to  a  ship  itself,  as  that  of  a  "  ship's-husband," 
is  not  sufficient.^ 

A  party  may  be  insured  who  is  not  named,  if  "  for  whom  it 
may  concern,"  or  words  of  equivalent  import  are  used.  But  a 
party  who  seeks  to  come  in  under  such  a  clause  must  show  that 
he  was  interested  at  the  time  the  insurance  was  made,  and  that 
he  was  in  the  contemplation  of  the  party  asking  insurance.*  The 
phrase  "  on  account  of  owners  at  the  time  of  loss,"  or  an  equiva- 
lent phrase,  will  bring  in  those  who  were  intended,  if  they  owned 
the  property  when  the  loss  occurred,  although  there  were  assign- 
ments and  transfers  between  the  time  of  insurance  and  the  loss.^ 
'  Each  person,  whose  several  interest  is  actually  insured  by  any 
such  general  phrase,  may  sue  in  his  own  name.^ 

If  the  nominal  insured  is  described  as  "  agent "  generally,  this 
is  equivalent  to  "for  all  whom  it  may  concern." '^     And  an  in- 

But,  by  established  usage,  the  underwriter  is  entitled  to  a  small  percentage  of  the 
amount  insured,  or  of  the  premium,  if  the  assured  defeat  the  contract  voluntarily.  But 
if  the  risk  actually  commences,  the  assured  must  comply  with  the  terms  of  the  policy  or 
lose  his  right  to  recover  in  case  of  loss,  and  in  this  sense  the  policy  is  binding  upon 
him.     See  infra  as  to  Warrantees. 

1  See  infra,  §  2. 

2  Lightbody  v.  North  American  Ins.  Co.  23  "Wend.  18. 

^  French  v.  Backhouse,  5  Bui'r.  2727.  A  consignee  of  goods  is  not  authorized  to 
insure  under  ordinary  circumstances,  and  in  the  absence  of  any  usage  requiring  it. 
Randolph  v.  Ware,  3  Cranch,  503  ;  Kingston  v.  Wilson,  4  Wash.  C.  C.  310  ;  De  Forest 
V.  Fulton  Ins.  Co.  1  Hall,  84.  Nor  has  a  master,  as  such,  authority  to  insure;  nor  a 
part-owner,  to  insure  for  the  other  part-owners.  Foster  v.  United  States  Ins.  Co.  11 
Pick.  85  ;  Hooper  v.  Lusby,  4  Camp.  66. 

*  Newson  v.  Douglass,  7  Har.  &  Johns.  417  ;  Lambeth  v.  Western  Fire  &  Mar.  Ins. 
Co.  11  Rob.  La.  82;  Seamans  v.  Loring,  1  Mason,  127.  In  Newson  v.  Douglass,  Bu- 
chanan, C.  J.,  said  :  "  '  Whom  it  may  concern'  is  a  technical  phrase,  common  to  policies 
of  insurance,  and  is  understood  to  mean  not  any  and  everybody,  who  may  chance  to 
have  an  interest  in  the  property  insured,  but  such  only  as  are  in  the  contemplation  of 
the  contract.  Such  a  policy  supposes  an  agency  and  proceeding  upon  that  ground, 
looks  only  to  the  principal  in  whose  behalf,  or  on  whose  account,  the  agent  moves  in 
the  transaction ;  and  he  for  whose  benefit  the  insurance  is  procured,  is  the  person  in 
the  contemplation  of  the  contract  —  is  he  whom  it  alone  concer^^." 

*  Rogers  v.  Traders'  Ins.  Co.  6  Paige,  583. 

6  Aldrich  v.  The  Equitable  Safety  Ins.  Co.  1  W.  &  Min.  272 ;  Blanchard  v.  Dyer, 
21  Maine,  111. 

■?  Davis  V.  Boardman,  12  Mass.  80;  Russell  v.  The  N.  E.  Mar.  Ins.  Co.  4  Mass.  82. 
See  also  Hibbert  v.  Martin,  1  Camp.  538. 


406  ELEMENTS    OP   MERCANTILE   LAW.  [cH.  XVIII. 

surance  "  for "  will  be  read  as  for  all  whom  it  may  con- 
cern if  that  were  intended.'  So,  if  the  designation  of  the  insured 
be  common  to  many  persons,  the  intention  must  decide  for  whom 
it  is  made.2  Whatever  is  written  on  any  part  of  the  sheet  con- 
taining the  policy,^  or  even  on  a  separate  paper,  if  referred  to  or 
signed  by  the  parties  as  a  part  of  the  policy,  is  thereby  made  a 
part  of  it.^  But  things  said  by  either  party  while  making  their 
bargain,  written  on  other  paper  and  not  so  referred  to  or  signed, 
form  no  part  of  it.^  The  policy  may  expressly  provide  that  its 
terms  shall  be  made  definite,  especially  as  to  the  property  insured, 
by  subsequent  indorsements  or  additions.^ 

Alterations  may  be  made  at  any  time  by  consent.'^  But  a  ma- 
terial alteration  by  the  insured,  without  the  consent  of  the  insurer, 
discharges  him;  although  it  was  made  honestly,  in  the  hope  or 
belief  of  having  his  consent.^  A  court  of  equity  will  correct  a 
material  mistake  of  fact.^ 

1  Turner  v.  Burrows,  8  Wend.  144  ;  S.  C.  24  Wend.  276. 

2  Church  V.  Hubbart,  2  Cranch,  187  ;  Carruthers  v.  Sheddon,  6  Taunt.  14. 

3  Dennis  v.  Ludlow,  2  Caines,  111  ;  Bean  v.  Stupart,  1  Doug.  11  ;  Kenyon  v.  Ber- 
than,  1  Doug.  12,  n.  4;  Guerlam  v.  Col.  Ins.  Co.  7  Johns.  527  ;  Ewer  v.  Washington 
Ins.  Co.  16  Pick.  502;  De  Hahn  v.  Hartley,  1  Term,  .34.3  ;  Fowler  v.  JEtna  F.  Ins.  Co. 
6  Cowen,  673 ;  S.  C.  7  Wend.  270.  In  Murdoch  v.  Chenango  Mut.  Ins.  Co.  2  Comst. 
210,  the  policy  was  on  one  half  of  an  entire  sheet,  and  on  the  other  half  there  was  a 
printed  statement,  headed  "  Conditions  of  Insurance  ; "  no  reference  was  made  to  it  in 
the  body  of  the  policy.     Held,  that  it  formed  part  of  it. 

*  Routledge  v.  Burrell,  1  H.  Bl.  254  ;  Worsley  v.  Wood,  6  Term,  710.  The  applica- 
tion for  insurance,  if  referred  to,  forms  part  of  the  policy.  Murdoch  v.  Chenango  Mut. 
Ins.  Co.  2  Comst.  210. 

^  Chief  Justice  Parlcer,  in  giving  the  opinion  of  the  court,  in  Higginson  v.  Dall,  13 
Mass.  96,  says  :  "Policies,  though  not  under  seal,  have  nevertheless  ever  been  deemed 
instruments  of  a  solemn  nature,  and  subject  to  most  of  the  rules  of  evidence,  which 
govern  in  the  case  of  specialties.  The  policy  itself  is  considered  to  be  the  contract 
between  the  parties,  and  whatever  proposals  are  made,  or  conversations  had,  prior  to 
the  subscription,  they  are  to  be  considered  as  waived,  if  not  inserted  in  the  policy  or 
contained  in  a  memorandum  annexed  to  it."  N.  Y.  Ins.  Co.  v.  Thomas,  3  Johns. 
Cases,  1.  "  The  admission  of  such  testimony  would  be  mischievous  and  incon- 
venient." Per  Kent,  J. ;  New  York  Gas  Light  Co.  v.  Mechanics'  Fire  Ins.  Co.  2  Hall, 
108.  The  slip  or  application  for  insurance  is  not  admissible  to  aid  in  the  construction 
of  the  policy,  except  in  the  case  of  a  latent  ambiguity.  It  may  be  also  used  when 
there  is  a  misrepresentation.  Dow  v.  Whetten,  8  Wend.  160.  In  Norris  v.  Ins.  Co,  of 
North  America,  3  Yeates.  84,  it  was  admitted  to  aid  in  construing  the  policy.  See 
also  Hogan  v.  Delaware  Ins.  Co.  1  AVash.  C.  C.  R.  419. 

•^  Langhorn  v-  Cologan,  4  Taunton,  330.  A  policy  of  this  kind  is  called  an  open  or 
running  policy,  and  is  the  form  most  in  use  by  mutual  comjjanies. 

7  Robinson  y.  Tobin,  1  Stark.  336;  Merry  v.  Prince,  2  Mass.  176  ;  Warren  ?;.  Ocean 
Ins.  Co.  16  Maine,  439.  In  Kennebec  Ins.  Co.  v.  Augusta  Ins.  &  Banking  Co.  Sup. 
Jud.  Court,  Mass.,  March  term,  1856,  Merrick,  J.,  says  :  "It  is  now,  however,  a  per- 
fectly well-settled  doqti'ine,  that  a  written  contract  may  be  materially  varied  and 
changed  by  subsequent  agreement,  orally  entered  into  by  the  parties  before  there  has 
been  a  breach  of  its  stipulations."     Goss  v.  Lord  Nugent,  5  B.  «fc  Ad.  58. 

*  Master  v.  Miller,  4  Term,  320  ;  Sanderson  v.  M'CuUom,  4  J.  B.  Moore,  5  ; 
Langhorn  v.  Cologan,  4  Taunt.  330;  Fairlie  l-.  Christie,  7  Taunt.  416;  Campbell  v. 
Christie,  2  Stark.  64 ;  Forshaw  v.  Chabert,  3  Brod.  &  Bing.  158. 

^  Graves  etal.  v.  Boston  Mar.  Ins.  Co.  2  Cranch,  441 ;  Andrews  i'.  Essex  F.  &  M. 


OH.  XVIII.]  OF   MARINE   INSURANCE.  407 

A  policy  may  be  assigned,  and  the  assignee  may  sue  in  the 
name  of  the  assignor.  If  the  assignment  be  assented  to  by  the 
insurer,  this  does  not  always  make  a  contract  between  him  and 
the  assignee,  on  which  he  may  sue  in  his  own  name.^  If  the  loss 
is  made  by  the  policy  payable  "to  order"  or  to  "  bearer,"  it  will 
then  be  negotiable  by  indorsement  or  delivery,  but  it  is  not  cer- 
tain that  the  transferree  can  even  then  sue  in  his  own  name.^ 
But  if  the  insured  transfers  the  property,  unaccompanied  by  a 
transfer  of  the  policy  with  consent  of  the  insured,  this  discharges 
the  policy,  unless  it  was  expressly  made  for  the  benefit  of  who- 
ever should  be  owner  at  the  time  of  the  loss,  as  before  stated.^ 

Ins.  Co.  3  Mason,  6  ;  Phoenix  Fire  Ins.  Co.  v.  Gurnee,  1  Paige,  278.  Tlie  eviderffee  of 
the  mistake  must  in  all  cases  be  clear  and  satisfactory.  Franklin  Pire  Ins.  Co.  v. 
Hewitt,  3  B.  Munroe,  231.  "Now  I  take  the  rule  to  be,  that  if  by  mistake,  a  deed  be 
drawn,  plainly  different  from  the  agreement  of  the  parties,  a  court  of  equity  will  grant 
relief,  by  considering  the  deed  as  if  it  had  conformed  to  the  agreement.  If  the  deed 
be  ambiguously  expressed,  so  that  it  is  difficult  to  give  it  a  construction,  the  agreement 
may  be  referred  to  in  order  to  explain  such  ambiguity."  Per  Washington,  J.  Hogan 
V.  Delaware  Ins.  Co.  1  Wash.  C.  C.  K.  419;  see  also  Dow  v.  Whetten,  8  Wend. 
160. 

'  Jessel  V.  Williamsburgh  Ins.  Co.  3  Hill,  88.  Per  Curiam:  "We  know  of  no  prin- 
ciple upon  which  the  assignee  of  a  policy  of  insurance  can  be  allowed  to  sue  upon  it  in 
his  own  name.  The  general  rule  applicable  to  personal  contracts  is,  that,  if  assigned, 
tjie  action  for  a  breach  must  be  brought  in  the  name  of  the  assignor,  except  where  the 
defendant  has  expressly  promised  the  assignee  to  respond  to  him."  The  policy  in  this 
case  contained  the  usual  clause  that  the  interest  of  the  insured  should  not  be  assigned 
without  the  consent  of  the  corporation.  The  insured  assigned  his  interest  with  their 
consent,  and  the  assignee  sued  in  his  own  name.  The  court  held  that  the  action  should 
have  been  brought  in  the  name  of  the  assignor,  and  the  plaintiff  therefore,  was  non- 
suited. See  also  HoAvard  v.  Albany  Ins.  Co.  3  Denio,  305.  The  later  cases  in  New 
York,  where  assignees  have  sued  in  their  own  names,  have  been  brought  under  the 
new  code,  c  4,  tit.  3,  which  provides  that  all  actions  are  to  be  brought  by  the  real 
parties  in  interest.  2  N.  Y.  Rev.  Stat.  p.  499.  The  transfer  of  the  entire  interest  of 
the  insured,  together  with  the  assent  of  the  underwriter  to  the  assignment  of  the  policy, 
will  be  considered  a  promise  on  his  part  to  make  payment  to  the  assignee,  and  he  may 
then  sue  in  his  own  name.  Carroll  v.  Boston  Mar.  Ins.  Co.  8  Mass.  515 ;  Howard  v. 
Albany  Ins.  Co.  3  Denio,  301 ;  Tillou  v.  Kingston  Mutual  Ins.  Co.  7  Barb.  570. 

2  By  tlie  law  of  France,  policies  of  insurance  may  be  made  negotiable  by  making  the 
loss  payable  to  order,  or  to  bearer.  Emerigon,  c.  1 8,  §  2  ;  2  Valin,  45  ;  Alauzet,  360  : 
2  id.  135 ;  see  2  Duer  on  Ins.  51,  52.  It  may  perhaps  be  doubted  whether  in  England, 
and  in  this  country,  an  assignee  of  such  a  policy  could  maintain  an  action  upon  it  in 
his  own  name.  It  has  been  held  in  England,  that  a  bill  of  lading  was  not  such  a  ne- 
gotiable instrument  that  an  indorsee  could  maintain  an  action  upon  it  in  his  own 
name.  Thompson  v.  Dominy,  14  Meeson  &  Welsh.  403.  The  same  point  is  decided 
in  a  late  case  in  9  Common  Bench,  297,  Howard  v.  Shepherd.  ]\Iauk,J.,  says:  "  Now 
it  is  perfectly  clear  that  a  contract  cannot  be  transferred  so  as  to  enable  the  transferree 
to  sue  upon  it  in  his  own  name."  In  Skinner  v.  Somes,  14  Mass.  107,  the  plaintiff 
declared  upon  a  bond  made  by  the  defendant  to  the  assignor  of  the  plaintiff  and  by 
him  assigned  to  the  plaintiff.  The  court  held  that  though  the  word  "  assigns  "  was  in 
the  bond,  this  would  not  entitle  the  assignee  to  sue  in  his  own  name. 

3  The  party  with  whom  the  contract  was  made,  cannot  sue,  for  "the  insured  must 
have  an  interest  at  the  time  of  the  loss  as  well  as  when  the  contract  is  made."  Per 
Bronson,  C.  J.,  in  Howard  v.  Albany  Ins.  Co.  3  Den.  301 ;  and  the  assignee  cannot  sue, 
for  the  contract  was  not  made  with  him  originally,  and  he  has  not  become  a  party  to  it 
with  the  consent  of  the  underwriter.    Lynch  v.  Dalzell,  4  Brown,  Pari.  Cases,  431 ;  The 


40S  ELEMENTS    OF   MEKCANTILE   LAW.  [CH.  XVIII. 

There  is  usually  a  clause  to  the  efFect  that  the  policy  is  void  if 
assigned  without  the  consent  of  the  insurers.  But  this  does  not 
apply  to  an  assignment  by  force  of  law,  as  in  a  case  of  insol- 
vency ;  or  in  a  case  of  death.^  And  after  a  loss  has  occurred, 
the  claim  against  th^  insurers  is  assignable.^  And  a  seller  who 
remains  in  possession  of  the  property  as  trustee  for  the  purchaser,^ 
or  a  mortgagor  retaining  possession,  may  retain  the  policy  and 
preserve  his  rights.* 

SECTION  II. 

OF  THE  INTEREST  OF  THE  INSURED. 

The  contract  of  Insurance  is  a  contract  of  indemnity  for  loss. 
The  insured  must  therefore  be  interested  in  the  property  at  the 
time  of  the  loss.^  The  value  to  be  paid  for  may  be  agreed  upon 
beforehand  and  expressed  in  the  policy,  which  is  then  called  a 
valued  policy;  or  left  to  be  ascertained  by  proper  evidence,  and 
the  policy  is  then  called  an  open  policy.^ 

This  valuation,  if  in   good  faith,  is  binding  on  both  parties, 

Sadlers'  Co.  v.  Badcock,  2  Atk.  554 ;  Wilsou  v.  Ilill,  3  Met.  66  ;  Murdock  v.  Chenango 
Mut.  Ins.  Co.  2  Comst.  210. 

1  The  term  "alienate  "  is  said,  by  the  Supreme  Court  of  New  York,  to  mean  a  con- 
veyance of  the  title  to  the  estate,  and  nothing  short  of  this  will  amount  to  an  aliena- 
tion. Masters  v.  Madison  Co.  Mut.  Ins.  Co.  11  Barb.  624.  Thus  it  has  been  held  that 
a  mortgage  on  real  estate  is  not  an  alienation.  Conovcr  v.  Mutual  Ins.  Co.  of  Albany, 
1  Comst.  290 ;  S.  C.  3  Denio,  254  ;  Jackson  v.  Mass.  Mut.  F.  Ins.  Co.  23  Piclc.  418. 
Nor  a  mortgage  of  personal  property,  without  a  transfer  of  possession  to  the  mortgagee. 
Kice  V.  Tower,  1  Gray,  426.  Sec  also  Holbrook  v.  Am.  Ins.  Co.  I  Curtis,  193.  Nor  a 
levy  on  execution,  Clark  v.  N.  Eng.  Mut.  F.  Ins.  Co.  6  Cush.  342  ;  Rice  v.  Tower,  1 
Gray,  426  ;  nor  a  sale  of  the  equity  of  I'cdcmption  so  long  as  the  party  has  the  right  to 
redeem.  Strong  v.  Manufacturers'  Ins.  Co.  10  Pick.  40.  If  the  insured  die  intestate, 
his  death  works  no  alienation,  because  his  heirs  take  by  descent,  and  not  by  any  act  of 
his.  Burbank  v.  Rockingham  M.  F.  Ins.  Co.  4  Foster,  550.  In  Dreher  ?>.  Etna  Ins. 
Co.  18  Missouri,  128,  it  was  held  that  a  dissolution  of  a  partnership,  before  loss,  and  a 
division  of  the  goods,  was  such  a  change  of  title  that  the  underwriters  would  be  dis- 
charged. Whether  a  sale  by  one  joint-owner  or  partner  to  the  other  joint-owners  or 
partners  is  an  alienation,  see  Breasted  v.  The  Farmers'  Loan  &  Trust  Co.  4  Selden, 
299  ;  Tillou  r.  Kingston  Mut.  Ins.  Co.  7  Barb.  570  ;  Same  case,  1  Selden,  405  ;  Mur- 
dock V.  Chenango  Mut.  Ins.  Co.  2  Comst.  210.  See  next  chapter,  on  Insurance  against 
Fire. 

2  Brichta  v.  N.  Y.  La  Fayette  Ins.  Co.  2  Hall,  372. 

3  Powles  V.  Innes,  11  Mec.  &  Wels.  10  ;  Reed  v.  Cole,  3  Burrow,  1512  ;  Morrison's 
Adm.  V.  Tennessee  M.  &  F.  Ins.  Co.  18  Missouri,  262. 

*  Gordon  v.  Mass.  Fire  &  Mar.  lus.  Co.  2  Pick.  249 ;  Lazarus  v.  Commonwealth  Ins. 
Co.  5  Pick.  76  ;  Stetson  v.  Mass.  Mut.  F.  Ins.  Co.  4  Mass.  330;  Hibbert  v.  Carter,  1 
Term,  745;  Irving  v.  Richardson,  2  Barn.  &  Ad.  193;  Bell  v.  Western  M.  &  F.  Ins. 
Co.  5  Rob.  Louis.  423. 

^  See  supra,  p.  407,  n.  3. 

^  An  open  policy  is  also  one  where  the  property  insured  is  to  be  inserted  by  subse- 
quent indorsements.     See  supra,  p.  406,  n.  6. 


I 


en.  XYIII.]  OF   MARINE   INSURANCE.  409 

even  if  it  be  very  high  indeed.^  But  a  ivager  polici/,  that  is,  one 
without  interest,  is  void ;  ^  and  if  there  be  some  interest,  the  val- 
uation may  be  so  excessive  as  to  be  open  to  the  objection  that 
the  interest  is  a  mere  cover,  and  that  the  contract  is  only  one  of 
wager.3  So  the  valuation  is  void  if  fraudulent  in  any  respect; 
as  if  it  cover  an  illegal  interest  or  peril.^ 

The  insured  may  apply  his  valuation  to  the  whole  property,  or 
to  that  part  of  it  which  he  wishes  to  insure;  thus  he  may  cause 
himself  to  be  insured  for  one  half  of  a  cargo,  the  whole  of  which  is 
valued  at  $20,000  — or  one  half,  which  half  is  valued  at  $20,000; 
and  which  of  these  things  is  meant  will  be  determined  by  a  rea- 
sonable construction  of  the  language  used.  If  he  owns  the  whole, 
the  valuation,  in  general,  will  be  held  to  apply  to  the  whole  ;  and 
only  to  a  part  if  he  owns  only  a  part.^ 

He  may  value  one  thing  insured  and  not  another ;  ^  or  may 
value  the  same  thing  in  one  policy  and  not  in  another,  and  then 
the  valuation   does  not  affect  the  policy  which  does  not  contain 

1  Hodgson  r.  The  Marine  Ins.  Co.  of  Alexandria,  5  Cranch,  100;  S.  C  6  Cranch, 
206.  In  this  case,  the  ship  was  valued  at  $10,000,  and  insured  for  $8,000.  The  court 
held  that  it  would  not  necessarily  avoid  the  contract,  nor  restrict  damages  to  that  sum, 
if  it  were  proved  that  the  actual  value  of  the  vessel  was  no  more  than  $8,000,  because 
she  might  have  fairly  cost  her  owners  the  whole  amount  of  her  valuation.  Coolidge  v. 
Gloucester  Marine  Ins.  Co.  15  Mass.  341 ;  Miner  v.  Tagert,  3  Binn.  204. 

-  In  New  York,  before  they  were  proliibited  by  tiie  Revised  Statutes,  wager  policies 
were  held  to  be  valid.  Juhel  v.  Churcli,  2  Johns.  Cas.  333,  In  Amory  v.  Oilman,  2 
Mass.  1,  Dana,  C.  J.,  says  :  "  As  wager  policies  are  injurious  to  the  morals  of  the  citi- 
zens, and  tend  to  encourage  an  extravagant  and  peculiarly  hazardous  species  of  gam- 
ins:, they  ought  not  to  receive  the  countenance  of  this  court."  See  also  Stetson  v.  Mass. 
Mut.  F.  Ins.  Co.  4  Mass.  336  ;  Lord  v.  Dall,  12  Mass.  115  ;  Alsop  r.  Commercial  Ins. 
Co.  1  Sumner,  464.  All  wagers,  upon  matters  in  which  the  parties  have  no  interest, 
are  void  contracts.  Hoit  v.  Hodge,  6  N.  H.  104  ;  Pritchet  v.  Ins.  Co.  of  N.  America,  3 
Yeatcs,  458. 

3  Clark  I'.  Ocean  Ins.  Co.  16  Pick.  289,  296 ;  Wolcott  v.  Eagle  Ins.  Co.  4  Pick.  429. 
In  Lewis  v.  Rucker,  2  Burrow,  1171,  Lord  Mansfield  says:  "There  are  many  conve- 
niences from  allowing  valued  policies ;  but  where  they  are  used  merely  as  a  cover  to  a 
wager,  they  would  be  considered  as  an  evasion." 

*  "  It  may  be  laid  down  as  a  general  rule,  that,  where  a  voyage  is  illegal,  an  insur- 
ance upon  such  voyage  is  invalid."  Per  Tindal,  C.  J.,  Redmond  v.  Smith,  7  Mann.  & 
Grang.  474.  See  Mount  v.  Waite,  7  Johns.  434.  But  if  the  voyage  is  known  to  the 
underwriter  to  be  illegal,  at  the  time  when  he  makes  the  contract,  then  he  cannot  say 
the  contract  is  not  valid.  Archibald  v.  The  Mercantile  Ins.  Co.  3  Pick.  70,  73  ;  Pollock 
V.  Babcock,  6  Mass.  234  ;  Richardson  v.  Maine  Ins.  Co.  6  Mass.  102.    See  Sect.  III.  post. 

s  Feise  v.  Aguilar,  3  Taunt.  506;  Dumas  v.  Jones,  4  Mass.  647.  Tlie  insurance  in 
this  case  was  on  freight  valued  at  $5,000,  for  which  amount  the  plaintift'  caused  himself 
to  be  insured.  It  was  proved  that  the  insurance  was  made  on  the  joint  account  of  the 
plaintiff  and  another  person,  though  this  fact  was  not  known  to  the  insm'crs  at  the 
time  the  contract  was  made.  The  court  held  that  as  the  whole  interest  of  the  plaintiff 
was  covered  by  other  underwriters,  he  could  not  i-ecovcr  any  thing  in  this  suit.  See 
Mayo  V.  Maine  Fire  &  M.  Ins.  Co.  12  Mass.  259 ;  Murray  v.  Columbian  Ins.  Co. 
11  Johns.  302. 

^  The  ship  may  be  valued  and  not  the  cargo.  Riley  v.  Hartford  Ins.  Co.  2  Conn. 
368. 

35 


410  ELEMENTS    OP   MERCANTILE    LAW.  [CII.  XVIII. 

it'  If  only  a  part  of  the  goods  included  in  the  valuation  are  on 
board  and  at  risk,  it  applies  to  them  pro  rata?  A  valuation  of 
an  outward  cargo  will,  generally,  be  taken  as  a  valuation  of  a 
return  cargo,  substituted  for  the  other  by  purchase  and  covered 
by  the  same  policy .^  And  a  valuation  will  cover  the  insured's 
whole  interest  in  the  thing  valued,  including  the  premium,  unless 
a  different  purpose  is  expressed  or  indicated.* 

A  valuation  of  freight  applies  to  the  freight  of  the  whole 
cargo  ;  and  if  a  part  only  be  at  risk,  it  applies  pro  rataS'  And  it 
applies  either  to  the  whole  voyage,  or  to  freight  earned  by  voyages 
which  form  parts  of  the  whole,  as  may  be  intended  and  ex- 
pressed.*^ 

If  profits  are  insured  as  such  they  are  generally  valued,  but 
may  be  insured  by  an  open  policy.'^  If  they  are  valued,  the  loss 
of  the  goods  on  which  the  profits  were  to  have  beeji  made,  im- 
ports in  this  country  a  loss  of  the  valued  profits,  without  proof 
that  there  would  have  been  any  profit  whatever ;  it  seems  to  be 
necessary  in  England  to  show  that  there  would  have  been  some 
profit,  and  then  the  valuation  attaches.*^ 

It  is  very  common  to  insure  profits,  in  fact,  by  a  valuation  of 
the  goods  sufficiently  high  to  include  all  the  profits  that  can  be 
made  upon  them.^ 

'  Higginson  v.  Dall,  13  Mass.  9G.  In  tliis  case,  a  vessel  was  insured  in  Boston  on 
an  open  policy,  and  afterwards  insured  on  a  valued  policy  in  Calcutta.  A  total  loss 
having  occurred,  it  was  settled  under  the  Boston  policy  witiiout  regard  to  the  value 
expressed  in  tlie  other.  See  also,  Bousfield  v.  Barnes,  4  Camp.  228 ;  Minturn  v.  Col. 
Ins.  Co.  10  Johns.  7.5 ;  Kane  v.  Com.  Ins.  Co.  8  Johns.  229. 

■•2  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429.  "  If  by  mistake  or  design,  the  assured 
should  put  on  board  only  part  of  the  goods  to  which  lie  intended  the  valuatioir  should 
apply,  we  think  it  clear  that  he  could  not  recover  as  if  the  whole  subject-matter  of  the 
valuation  had  been  put  on  board ;  but  that  in  case  of  loss,  he  should  recover  such  pro- 
portion of  the  valuation  as  the  goods  which  were  on  board  and  at  risk,  should  bear  to 
the  whole  valuation.  Per  Putnam,  J.,  Forbes  v.  Aspinall,  13  East,  323;  Clark  v. 
Ocean  Ins.  Co.  16  Pick.  289,  295. 

3  This  is  entirely  a  question  of  construction.  The  intent  of  the  parties,  as  it  appears 
on  the  face  of  the  policy,  will  in  all  cases  govern.  Haven  v.  Gray,  12  Mass.  74 ; 
M'Kim  V.  Phoenix  Ins.  Co.  2  Wash.  C.  C.  89 ;  Whitney  v.  American  Ins.  Co. 
3  Cowen,  210  ;  S.  C.  5  Co  wen,  712. 

*  Brooks  V.  Oriental  Ins.  Co.  7  Pick.  259  ;  Minturn  v.  Col.  Ins.  Co.  10  Johns.  75  ; 
Ogden  V.  Col.  Ins.  Co.  10  Johns.  273. 

^  Sec  supra,  n.  2. 

^  In  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429,  it  was  assumed  that,  in  a  policy  on 
freight  for  a  year,  with  a  valuation,  the  valuation  was  of  the  freight  of  each  successive 
passage  separately.  See  also  Hughes  v.  Union  Ins.  Co.  8  Wheat.  294 ;  Davy  v. 
Ilallett,  3  Caines,  16  ;  Patapsco  Ins.  Co.  v.  Biscoe,  7  Gill  &  Johns.  293. 

■^  Mumford  v.  Hallett,  1  Johns.  439 ;  Benecke  on  Ins.  28. 

s  Patapsco  Ins.  Co.  v.  Coulter,  3  Peters,  222 ;.  Barclay  v.  Cousins,  2  East,  544 ; 
Hodgson  V.  Glover,  6  East,  316  ;  Eyre  v.  Glover,  16  East,  218. 

9  Alsop  V.  Commercial  Ins.  Co.  1  Sumner,  451,  469.     In  this  case,  the  profits  were 


I 


CII.  XVni.]  OF   MARINE   INSURANCE.  411 

III  an  open  policy,  where  the  value  insured  is  to  be  determined 
by  evidence,  the  value  of  the  property  —  whether  ship  or  goods  — 
which  is  insured,  is  their  value  when  the  insurance  took  elTect, 
including  the  premium  of  insurance ;  as  the  law  of  insurance 
intends  indemnifying  the  assured,  as  accurately  as  may  be,  for 
all  his  loss.'  If  a  ship  be  insured,  its  value  throughout  the 
insurance  is  the  same  as  at  the  beginning,  without  allowance  for 
the  effect  of  time  upon  it.^  And  all  its  appurtenances,  in  a  mer- 
cantile sense  of  this  phrase,  enter  into  this  value.^ 

While  the  value  does  not  vary  with  time,  the  interest  of  the 
insured  at  the  time  of  the  loss,  is  that  on  which  he  founds  his 
claim."* 

If  the  insurance  is  on  goods  on  successive  passages,  and  at 
the  close  of  one  the  goods  are  sold  at  a  profit,  and  the  whole 
proceeds  invested  in  the  cargo  put  on  board,  this  increased  value 
enters  into  the  value.^  Generally,  the  value  of  goods  is  their 
invoice  price,  with   all  those  charges,  commissions,  wages,  &c., 

valued  at  $20,000.  The  plaintiff  had  on  board  bullion  of  the  invoice  value  of  $11,821, 
and  hides  of  the  value  of  $7,765.  Mr.  Justice  Stori/  say !<,  fi.  4,73:  "There  is  some- 
thing, too,  in  the  nature  of  an  insurance  on  profits,  whicli  distinguishes  it  from  any 
other  insurance,  whether  on  ships,  or  on  goods,  or  on  freight.  The  latter  are  generally 
susceptible  of  an  exact  valuation.  But  profits  are  not.  It  is  not  sufficient  to  justify 
the  court  in  setting  aside  the  present  verdict  upon  this  ground,  that  it  should  doubt 
whether  the  over  valuation  was  innocent.  It  must  clearly  see  that  it  was  fraudulent." 
See  also  Eobinson  v.  Manufacturers'  Ins.  Co.  1  Met.  143. 

'  Shawe  V.  Felton,  2  East,  109  ;  Le  Roy  v.  United  Ins.  Co.  7  Johns.  343.  In  Usher 
V.  Noble,  12  East,  639,  Lord  Ellenhorough  lays  down  the  rule  as  follows  :  "  In  the  case 
of  a  valued  policy,  the  valuation  in  the  policy  is  the  agreed  standard  ;  in  case  of  an 
open^  policy,  the  invoice  price  at  the  loading  port,  including  premiums  of  insurance  and 
commission,  is,  for  all  purposes  of  either  total  or  average  loss,  the  usual  standard  of 
calculation  resorted  to  for  the  purpose  of  ascertaining  this  value."  In  Carson  v.  Marine 
Ins.  Co.  2  Wash.  C.  C.  468,  there  was  a  total  loss  of  goods  insured  on  an  open 
policy.  Mr.  Justice  Washington  held  that  the  market  price  at  the  loading  port  and 
not  the  invoice  price,  was  to  be  taken  as  the  measure  of  damages. 

-  Shawe  V.  Felton,  2  East,  109  ;  Weskett  on  Ins.  304,  n.  9  ;  Snell  ;;.  Delaware  Ins. 
Co.  4  Dallas,  430. 

3  Kemble  v.  Bowne,  1  Caines,  80  ;  1  Emerigon,  277  ;  Shawe  v.  Felton,  2  East,  109. 

*  See  cases  cited,  ante,  p.  407,  n.  3. 

5  Columbian  Ins.  Co.  v.  Catlett,  12  Wheat.  383.  In  this  case,  the  sum  of  $10,000 
was  insured  on  a  cargo  of  flour  from  Alexandria  to  St.  Thomas,  and  two  other  ports 
in  the  West  Indies,  and  back  to  the  port  of  discharge  in  the  United  States.  More  than 
$3,000  worth  of  the  flour  was  sold  at  St.  Thomas,  and  tlie  vessel  was  afterwards 
wrecked.  At  the  time  tlie  vessel  sailed,  the  value  of  the  flour  on  board  amounted  to 
more  than  $16,000;  at  the  time  of  the  loss,  over  $12,000.  The  question  arose  whether 
at  the  time  of  the  loss,  the  policy  covered  the  cargo  then  on  board,  to  the  whole  amount 
underwritten,  or  only  twelve  sixteenths  of  it,  that  is  the  portion  covered  at  the  com- 
mencement of  the  risk.  It  was  held  that  the  policy  covered  $10,000  during  the  whole 
voyage,  out  and  home,  so  long  as  the  insui'ed  had  that  amount  on  board.  And  that 
the  loss  must  be  apportioned  l)etween  the  parties  in  tiie  projiortion  which  the  sum 
insured  bore  to  the  amount  of  the  value  on  board  at  the  time  of  the  loss.  See  Meech 
V.  Philadelphia  F.  &  Inland  Nav.  Ins.  Co.  3  Wharton,  473. 


412  ELEMENTS   OF   MERCANTILE   LAW.  [CIL    XVIII. 

which  enter  into  the  cost  to  the  owner,  when  the  risk  com- 
mences.' The  drawback  is  not  deducted  ;2  and  the  expenses 
incurred  after  the  risk  begins,  as  for  freight,  arc  not  included.^ 
And  the  rate  of  exchange  at  the  beginning  of  the  risk  is  taken.* 


SECTION  III. 

OF    THE   INTEREST    WlllCn   MAY   BE   INSURED. 

A  mere  possibility  or  expectation  cannot  be  insured  ;^  but  any 
actual  interest  may  be.  If  one  has  contracted  to  buy  goods,  he 
may  insure  them,  and  will  recover  if  the  property  be  in  him  at 
the  time  of  the  loss.*^  Or  if  one  has  taken  on  himself  certain 
risks,  or  agreed  to  indemnify  another  for  them,  he  may  insure 
himself  against  the  same  risks.''  The  policy  may  express  and 
define  the  interest  in  such  a  way  that  any  change  in  the  nature 
of  it  will  discharge  the  insurance.  If  it  is  not  so  defined,  a 
change,  as  from  the  interest  of  an  owner  to  that  of  a  mortgagor, 
or  of  a  mortgagee,  will  not  defeat  the  policy.^ 

1  In  Coffin  V.  Newbmyport  Mar.  Ins.  Co.  9  Mass.  436,  the  invoice  price,  whicli  was 
their  real  value  at  the  time,  and  price  of  shipment,  was  held  to  be  the  true  standard. 
In  Le  Roy  v.  United  Ins.  Co.  7  Johns.  34.3,  the  prime  cost  was  taken.     Mr.  Justice 

Washington  contends,  on  the  other  hand,  that  the  true  rule  is  the  actual  market  value 
at  the  time  of  effecting  the  insurance.  Carson  v.  Marine  Ins.  Co.  2  Wash.  C.  C.  468  ;  see 
also,  Gahn  v.  Broome,  1  Johns.  Cas.  120.  To  the  price  is  to  be  added  all  sums  paid 
for  labor,  storage,  expense  of  transportation,  and  commissions  paid  to  agents  and 
factors.     Fontaine  v.  Col.  Ins.  Co.  9  Johns.  29. 

2  Gahn  v.  Broome,  1  Johns.  Cas.  120;  Minturn  v.  Col.  Ins.  Co.  10  Johns.  75. 

3  Gibson  v.  Phil.  Ins.  Co.  I  Binney,  405. 

4  Thelluson  v.  Bewick,  1  Esp.  77. 

5  Stockdale  v.  Dunlop,  6  Mee.  &  Welsh.  224.  In  this  case,  the  plaintiffs  made  a 
verbal  contract  to  purchase  of  third  parties  50  tons  of  palm  oil.  They  then  insured 
their  interest  in  it.  Held,  that  they  could  not  recover  because  the  contract  for  the  pur- 
chase was  incapable  of  being  enforced.  In  Devaux  v.  Steele,  6  Bing.  N.  C  358,  it  was 
shown  that  the  French  government  sometimes  granted  a  bounty  to  vessels,  which  per- 
formed a  similar  voyage  to  the  one  in  question.  Held,  that  this  did  not  constitute  such 
a  vested  interest,  as  would  entitle  the  owners  to  insure  their  expectation.  See  also 
Brown  v.  Williams,  28  Maine,  252. 

<*  McGivney  v.  Phoenix  Fire  Ins.  Co.  1  Wend.  85.  In  this  case  it  was  decided  that 
a  person  who  was  in  possession  of  a  house,  and  had  agreed  to  purchase  the  same,  who 
had  made  partial  payments  and  repaired  the  premises,  had  an  insurable  interest  in  the 
house.  See  also,  Columbian  Ins.  Co.  v.  Lawrence,  2  Peters,  25 ;  Rider  v.  Ocean  Ins. 
Co.  20  Pick.  259. 

•^  Oliver  v.  Greene,  3  Mass.  133  ;  Crowley  v.  Cohen,  3  B.  &  Ad.  478  ;  Merry  v. 
Prince,  2  Mass.  176.  "Reinsurance  is  a  valid  contract  at  the  common  law.  It  is  for- 
bidden in  England,  except  where  the  insurer  shall  be  insolvent,  become  bankrupt 
or  die,  by  the  statute  19  Geo.  2,  c.  37,  §  4."  Per  Bronson,  J.,  New  York  Bowery  Ins. 
Co.  V.  New  York  Fire  Ins.  Co.  17  Wend.  359. 

^  See  ante,  p.  408,  n.  4. 


en.  XVIII.]  OF   MARINE   INSUEANCE.  413 

A  mere  indebtedness  to  a  party  on  account  of  property,  gives 
the  creditor  no  insurable  interest;  as  if  one  repaired  a  house  or 
a  ship;  but  if  the  creditor  has  a  lien  on  the  property,  this  is  an 
insurable  interest.'  And,  generally,  every  bailee  or  party  in  pos- 
session of  goods,  with  lien  on  them,  may  insure  them.^  And  a 
lender  on  bottomry  or  respondentia,  may  insure  the  ship  or 
goods.^  And  any  persons  who  have  possession  of  property,  or  a 
right  to  possession,  and  may  legally  make  a  profit  out  of  it,  as 
factors  on  commission,  consignees,  or  carriers,  may  insure  their 
interest.^ 

If  a  mortgagee  be  insured,  and  recovers  from  the  insurers,  he, 
generally  at  least,  transfers  to  them  the  security  for  his  debt,  or 
accounts  with  them  for  its  value;  because,  to  the  extent  of  that 
security,  he  has  met  with  no  loss,  and  if  he  did  not  transfer  it, 
would  recover  his  money  twice.^ 

1  Buchanan  v.  Ocean  Ins.  Co.  6  Cow.  318  ;  WolfF  v.  Horncastle,  1  B.  &  P.  316  ; 
Tasker  v.  Scott,  6  Taunt.  234 ;   Wells  v.  Phil.  Ins.  Co.  9  Serg.  &  R.  103. 

-  Crowley  v.  Cohen,  3  B.  &  Ad.  478 ;  Van  Natta  v.  Mut.  Security  Ins.  Co.  2  Sandf. 
490.  In  this  case,  tlic  plaintifl"  insured  the  cargo  of  a  canal  boat  generally.  Held,  that 
he  might  recover  on  proving  that  he  had  a  special  interest  in  it  as  a  common  carrier. 

3  Harman  v.  Vanhatton,  2  Vcrn.  717;"  Kenny  v.  Clarkson,  1  Johns.  385.  In  Wil- 
liams V.  Smith,  2  Caines,  13,  it  was  held  that  the  purchaser  of  a  vessel,  which  had  been 
bottomried,  he  not  knowing  it  at  the  time  of  the  sale,  liad  an  insurable  interest  in  it. 

*  Putnam  v.  Mercantile  Marine  Ins.  Co.  5  Met.  386.  In  this  case,  it  was  lield  that 
a  commission  merchant,  to  whom  the  cargo  of  a  vessel  was  consigned  for  sale,  might 
insure  his  expected  commissions  while  the  vessel  was  on  her  voyage.  Mr.  Justice 
Hubbard,  in  delivering  the  opinion  of  the  court,  says :  "  The  law  of  insurance  has  been 
most  reasonably  extended  to  embrace  within  its  provisions  cases  where  the  parties,  hav- 
ing no  ownership  of  the  property,  have  a  lien  ui^on  it,  or  such  an  interest  connected 
with  its  safety  and  its  situation,  as  will  cause  them  to  sustain  a  direct  loss  from  its 
destruction,  or  from  its  not  reaching  its  proper  place  of  destination.  Such  rights  have 
received  protection,  and  the  exi)ectation  of  profits,  the  loan  upon  mortgage  or  respon- 
dentia, the  advances  of  a  consignee,  an  agent  or  factor,  are  all  now  the  well-recognized 
sulijects  of  insurance."  See  also  French  v.  Hope  Ins.  Co.  16  Pick.  397;  Crowley  v. 
Cohen,  3  B.  &  Ad.  478 ;  De  Forest  v.  Fulton  F.  Ins.  Co.  1  Hall,  84. 

s  Prior  to  the  case  of  King  v.  State  Mut.  Fn-e  Ins.  Co.  7  Cush.  1,  the  commonly  re- 
ceived opinion  was,  that,  if  the  mortgagee  insured  his  interest  and  recovered  from  the 
insurers,  they  were  entitled  to  an  assignment  of  an  amount  of  the  debt  equal  to  that , 
paid  for  the  loss.  See  2  Phillips  on  Ins.  §  1712.  In  the  case  above  referred  to,  Shaw, 
C.  J.,  takes  very  strong  grounds  in  ftivor  of  permitting  the  mortgagee  to  recover  on 
both  contracts.  He  says,  on  page  9  :  "  What,  then,  is  there  inequitable,  on  the  part  of 
the  mortgagee,  towards  either  party,  in  holding  both  sums  1  They  are  both  due  upon 
valid  contracts  with  him,  made  upon  adequate  considerations  paid  by  himself.  There 
is  nothing  inequitable  to  the  debtor,  for  ho  pays  no  more  than  he  originally  received,  m 
money  loaned ;  nor  to  the  underwriter,  for  lie  has  only  paid  upon  a  risk  voluntarily 
taken,  for  which  he  was  paid  by  the  mortgagee  a  full  and  satisfactory  equivalent." 
Mr.  Phillips  takes  a  somewhat  different  ground,  and  seems  to  us,  to  view  the  case  in  its 
true  light.  He  says:  "If  the  assured  could  recover  the  amount  of  the_  debt  under  a 
policy  on  the  property  pledged  as  collateral  security,  and  also  the  debt  itself,  from  the 
debtor,  the  policy  would  be  equivalent  to  a  ticket  in  a  lottery,  for  the  debtor  is, 
under  such  a  poficy,  still  liable  for  the  debt,  which  is  not  discharged  by  payment 
of  the  loss  on  property  mortgaged  as  collateral  security."  In  Carpenter  v.  Prov- 
idence  Washington  Ins.  Co.  "l6  Pet.  495,  501,  Mr.  Justice  Story  says:  "Where  a 

35* 


414  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

A  policy  usually  adds  to  the  description  of  the  property,  "  lost 
or  not  lost."  This  phrase  makes  the  policy  retrospective ;  and 
attaches  it  to  the  property,  if  that  existed  when,  by  the  terms  of 
the  policy,  the  insurance  began,  whether  this  were  for  a  voyage 
or  for  a  certain  time,  although  it  had  ceased  to  exist  when  the 
policy  was  made.^ 

An  interest  which  was  originally  valid,  and  sufficient,  cannot 
be  defeated  by  that  which  threatens  but  does  not  complete  an 
actual  divestment  of  the  interest  in  property ;  therefore,  not  by 
attachment,  or  on  execution  ^  for  debt;  nor  by  liability  to  seizure 

mortgagee  insures  solely  on  his  own  account,  it  is  but  an  insurance  of  his  debt;  and  if 
his  debt  is  afterwards  paid  or  extinguished,  the  policy  ceases  from  that  time  to  have 
any  operation  ;  and  even  if  the  premises  insured  are  subsequently  destroyed  by  fire,  he 
has  no  right  to  recover  for  the  loss,  for  he  sustains  no  damage  thereby ;  neither  can  the 
mortgagor  take  advantage  of  the  policy,  for  he  has  no  interest  whatsoever  therein."  See 
also  the  language  of  Walworth,  Chancellor,  in  Etna  F.  Ins.  Co.  v.  Tyler,  16  Wend. 
385,  397.  Moreover,  the  case  of  King  v.  State  Mutual  Fire  Ins.  Co.  seems  hardly  con- 
sistent with  a  prior  decision  of  the  same  court.  It  is  provided  by  statute,  in  Massachu- 
setts, that  railroad  corporations  shall  be  responsible  for  losses  by  fire  caused  by  their 
locomotives,  "  to  the  person  or  corporation  injured."  In  Hart  v.  Western  R.  K.  Cor- 
poration, 13  Met.  99,  a  house  which  was  insured,  was  destroyed  by  a  fire  communicated 
b}'  a  locomotive  engine  of  the  defendants.  The  underwriters  paid  the  owner  the 
amount  of  the  loss.  It  was  held  that  the  underwriters  could  tlien  bring  an  action 
against  the  corporation,  under  the  statute,  in  tlie  name  of  the  owner,  and  that  he  could 
not  release  such  action.  S/iaiv,  C.  J.,  says  :  "Now,  when  the  owner,  who  prima  facie 
stands  to  the  whole  risk,  and  suffers  the  whole  loss,  has  engaged  another  person  to  be 
at  that  particular  risk  for  him,  in  whole  or  in  part,  the  owner  and  the  insurer  are,  in 
respect  to  that  ownership  and  the  risk  incident  to  it,  in  effect  one  person,  having  to- 
gether the  beneficial  riglit  to  an  indemnity  provided  by  law  for  those  who  sustain  a  loss 
by  that  particular  cause.  If,  therefore,  the  owner  demands  and  receives  payment  of 
that  very  loss  from  the  insurer,  as  he  may,  by  virtue  of  his  contract,  there  is  a  manifest 
equity  in  transferring  the  right  to  indemnity,  which  he  holds  for  the  common  benefit, 
to  the  insurer.  It  is  one  and  the  same  loss,  for  which  he  has  a  claim  of  indemnity,  and 
he  can  equitably  receive  but  one  satisfaction.  AVhere  such  an  equity  exists,  the  party 
holding  the  legal  right,  is  conscientiously  bound  to  make  an  assignment,  in  equity,  to 
the  person  entitled  to  the  benefit;  and  if  he  fails  to  do  so,  the  cestui  que  trust  may  sue 
in  the  name  of  the  trustee,  and  his  equitable  interest  will  be  protected."  See  also 
Mason  v.  Sainsbury,  2  Condey's  Marshall,  794  ;  Clark  v.  The  Hundred  of  Blything,  2 

B.  &  Cress.  254.  But  if  the  doctrine  contended  for  in  King  v.  State  Mutual  Fire  Ins. 
Co.,  be  true  in  fire  insurance,  it  does  not  follow  that  it  is  true  in  marine.  On  the  other 
hand,  there  are  immerous  cases  in  favor  of  the  doctrine  of  subrogation.  Thus,  it  has 
been  held  that,  where  a  master  of  a  vessel  is  liable,  as  a  common  carrier,  to  the  assured 
for  a  loss,  as  by  thieves,  for  which  the  insurer  is  also  liable,  the  insurer,  upon  an  aban- 
donment being  made,  is  entitled  to  be  subrogated  to  the  rights  of  the  insured  against 
the  owner.  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  285.  See  also  Bell  v.  Western  Mar. 
and  Fire  Ins.  Co.  5  Rob.  Louis.  423,  442;  Ilussel  v.  Union  Ins.  Co.  4  Dall.  421; 
Gracie  v.  New  York  Ins.  Co.  8  Johns.  245;  Coolidge  v.  Gloucester  Ins.  Co.  15  Mass. 
341 ;  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61 ;  Col.  Ins.  Co.  v.  Ashby,  4  Pet.  139. 

1  Paddock  v.  Franklin  Ins.  Co.  1 1  Pick.  229.     In  this  case,  there  was  an  insurance 
on  the  cargo  of  the  ship  Tarquin,  "  lost  or  not  lost,  now  on  a  whaling  voyage."     Shaw, 

C.  J.,  says  :  "  To  construe  this  jjolicy  so  as  to  make  the  risk  commence  on  the  day  of 
its  date,  it  would  be  necessary  to  limit  the  word  '  voyage '  to  a  very  small  part  of  the 
voyage,  without  any  words  expressing  such  limitation,  and  would  render  the  words 
'  lost  or  not  lost' wholly  inoperative.  We  are  of  opinion  tliat  this  policy  would  attach 
upon  the  oil  from  the  time  the  vessel  first  began  to  take  whales  in  tlie  course  of  this 
voyage."  See  also  Hacks  v.  Thornton.  1  Holt,  N.  P.  30  ;  March  v.  Pigot,  5  Burrow, 
2802.     See  Hammond  v.  Allen,  2  Sumn.  387,  396. 

2  See  Strong  v.  Manufacturers'  Ins.  Co.  10  Pick.  40 ;    Clark  v.  New  Eng.  Mut.  F. 


en.  XYIII.]  OF  MARINE  INSURANCE.  415 

by  government  for  forfeiture;'  nor  a  right  in  the  seller  to  stop 
the  goods  in  transitu;'^  nor  capture.^  But  sale  on  execution, 
actual  seizure,  stoppage  in  transitu,  or  condemnation,  divest  the 
property,  and  discharge  the  insurance.^  And  the  insurance  never 
attaches  if  the  interest  is  illegal  originally ;  ^  and  it  is  discharged 
if  it  becomes  illegal,  subsequently  to  the  insurance,  or  if  an  il- 
legal use  of  the  subject-matter  of  the  insurance  is  intended.^  And 
any  act  is  illegal  which  is  prohibited  by  law,  or  made  subject  to 
a  penalty."  The  effect  would  be  the  same  if  the  policy  opposes 
distinctly  the  principles  and  the  purposes  of  law,  as  wagering 
policies  do.^ 

Mariners,  or  mates,  cannot  insure  their  wages,  but  may  insure 
goods  on  board,  bought  with  their  wages ;  ^  and  one  legally  in- 

Ins.  Co.  6  Cush.  354  ;  ante,  p.  408,  n.  1.  See  also  Franklin  rirc  Ins.  Co.  v.  Findlay,  6 
Whart.  483. 

1  Clark  V.  Protection  Ins.  Co.  1  Story,  109,  131.  "  If  the  illegal  act  is  followed  by  a 
forfeiture  and  seizure  of  the  thing  insured,  I  agree  that  the  underwriters  are  not  liable 
for  the  loss.  But  the  mere  fact  of  liability  to  forfeiture  does  not  avoid  tlie  insurance, 
or  prevent  a  recovery  for  a  loss  by  any  independent  peril."  Per  Sturij,  J.  See  also 
The  Ocean  Ins.  Co.  v.  Polleys,  13  Pet.  157;  The  Mars,  1  Gallison.  192. 

-  Stoppage  in  transitu  proceeds  upon  the  ground  of  an  equitable  lien,  not  of  rescind- 
ing the  contract.  Gwynne.  ex  parte,  12  Ves.  Jr.  379;  per  Shaw,  C  J.,  Rowley  v.  Bige- 
low,  12  Pick.  313 ;  Stanton  v.  Eager,  16  Pick.  475.  The  vendee,  or  his  assignees,  may 
recover  the  goods,  on  payment  of  the  price,  and  the  vendor  may  sue  for  and  recover 
the  price,  notwithstanding  he  luid  actually  stopped  the  goods  in  transitu,  provided  he  be 
ready  to  deliver  them  upon  payment.  If  he  has  been  paid  in  part,  lie  may  stop  the 
goods  for  the  balance  due  him,  and  the  part-payment  only  diminislies  tlie  lien  pro  tanto 
on  the  goods  detained.  Newhall  v.  Vargas,  1 3  Maine,  93 ;  Kymer  v.  Suwercropp,  1 
Camp.  109.     See  also  1  Parsons  on  Cont.  479. 

3  Per  Lord  Eldon,  Lucena  v.  Crauford,  5  Bos.  &  Pul.  319 ;  East  India  Co.  v.  Sands, 
cited  in  10  Mod.  79. 

*  See  ante,  four  preceding  notes. 

5  See  ante,  p.  409,  notes  2  and  4. 

^  Eussell  V.  Degrand,  15  Mass.  35.  The  insurance  in  this  case  was  from  Boston  to 
the  port  of  discharge  in  Europe.  In  the  policy,  it  was  provided  that  no  exceptions 
were  to  be  taken  on  account  of  ports  interdicted  by  the  laws  of  the  United  States.  At 
the  time  the  policy  was  made,  a  statute  was  in  force  prohibiting  all  vessels  from  going 
to  any  port  in  France  or  England.  There  was  evidence  tending  to  show  that,  at  the 
time  the  policy  was  made,  it  was  intended  that  the  vessel  should  go  to  France,  and 
that  she  afterwards  sailed  for,  and  arrived  there.  Held,  that  the  contract  was  illegal, 
and  therefore  void. 

"  Farmer  v.  Legg,  7  Term,  186;  Ingham  v.  Agnew,  15  East,  517;  Wainhouse  v. 
Cowie,  4  Taunt.  178;  United  States  v.  The  Paul  Shearman,  1  Pet.  C.  C.  98;  Bartlett 
V.  Vinor,  Carth.  252.  Per  Holt,  C.J. :  "Every  contract  made  for,  or  about  any  matter 
or  thing,  which  is  proliibited  and  made  unlawful  by  statute,  is  a  void  contract,  though 
the  statute  does  not  mention  that  it  shall  be  so,  but  only  inflicts  a  penalty  on  the 
offender,  because  a  penalty  imjdies  a  prohibition,  though  there  are  no  prohibitory  words 
in  the  statute."  This  is  cited  with  commendation  by  Tindal,  C.  J.,  in  De  Begnis  v. 
Armistead,  10  Bing.  107;  Gallini  v.  Laborie,  5  Term,  242;  Clark  v.  Protection  Ins. 
Co.  1  Story,  109,  122. 

^  See  ante,  p.  409,  n.  2. 

9  Emerigon,  (by  Meredith,)  191;  Lucena  v.  Craufurd,  5  B.  &  P.  294.  "But  the 
mariner  is  not  permitted  to  insure  his  wages  by  the  policy  of  our  law,  in  order  that  he 
may  be  stimulated  to  all  possible  exertion  for  the  preservation  of  the  ship,  on  which 


416  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

terested  in  the  wages  of  a  mariner,  may  insm*e  them.'  A  master 
may  insure  his  wages,  commissions,  or  any  profit  he  may  make 
out  of  his  privilege.^ 

An  unexecuted  intention,  if  not  distinctly  agreed  upon,  will 
not  defeat  a  policy;^  nor  a  remote  and  incidental  illegality;  as 
smuggling  stores  on  board,*  or  not  having  on  board  the  provisions 
required  by  law;^  nor  a  change  from  legality  to  illegality,  which 
cannot  be  proved  or  supposed  to  be  known  to  the  insured.^  And 
upon  these  questions,  the  court,  if  the  case  be  balanced,  will  in- 
cline to  the  side  of  legality.'^  A  cargo  may  be  insured  which  is 
itself  lawful,  but  was  purchased  with  the  proceeds  of  an  illegal 
voyage.^ 

If  a  severable  part  of  a  cargo  or  a  voyage  is  legal,  it  may  be 
insured,  although  other  parts  are  illegal.  But  if  a  part  of  the 
whole  property  insured  is  illegal,  this  avoids  the  whole  policy.^ 

A  compliance  with  foreign  registry  laws  certainly  is  not,  and 
with  our  own,  probably,  is  not  necessary  to  sustain  the  insurance 
of  an  actual  owner  in  goodfaith.^^ 

alone  all  his  own  interests  are  made  to  depend."  Per  Lord  Stoivell,  in  the  case  of  The 
Juliana,  2  Dodson,  509.  But  if  they  engage  to  go  on  a  long  voyage,  and  covenant  to 
have  some  money  paid  them  abroad,  to  lay  out  in  goods  to  bring  home,  insurance  may 
be  made  on  such  goods.  Weskett  on  Ins.  587.  See  also  Webster  v.  33e  Tastet,  7 
Term,  157;  Galloway  v.  Morris.  .3  Yeates,  445;  M'Quirk  v.  The  Penelope,  2  Peters's 
Adm.  276;  Icard  v.  Goold,  11  Johns.  279;  Percival  v.  Hickey,  18  Johns.  257. 

1  Hancox  v.  Fishing  Ins.  Co.  3  Sumn.  141. 

-  King  V.  Glover,  5  Bos.  &  Pul.  206.  In  this  case,  the  captain  insured  his  commis- 
sions, privileges,  &c. ;  his  wages  were  not  insured  ;  -but  the  court  seemed  to  consider  it 
as  well  settled  that  a  cqj^tain  might  insure  his  wages.  See  also  Poster  v.  Hoyt,  2 
Johns.  Cas.  327;  Holbroolc  v.  Brown,  2  Mass.  280. 

3  "  A  mere  intention  to  do  an  illegal  act,  or  other  act,  which  would  avoid  a  policy, 
if  done,  but  wliich  has  never  been  consummated  by  any  act,  has  never,  as  fivr  as  I 
know,  been  deemed,  per  se,  to  vitiate  the  policy."  Per  Story,  J.,  Clark  v.  Protection 
Ins.  Co.  1  Story,  124.  See  also  The  Abby,  5  Chr.  Robinson,  251;  Waters  v.  Allen,  5 
Hill,  421. 

*  Ocean  Ins.  Co.  v.  Polleys,  13  Pet.  157 ;   Clark  v.  Protection  Ins.  Co.  1  Story,  109. 

5  Deshon  v.  Merchants'  Ins.  Co.  11  Met.  199, 

^  Walden  v.  Phcenix  Ins.  Co.  5  Johns.  310. 

"^  See  cases  passim, 

^  Per  Lord  Kenyon,  O.  J.,  Bird  v.  Appleton,  8  Term,  562. 

^  See  2  Pargons  on  Contracts,  29,  as  to  when  a  contract  is  entire.  See  also  Camden 
V.  Anderson,  6  Term,  723.  In  Parkin  v.  Dick,  11  East,  502,  Lord  EUenborough  said: 
"  It  has  been  decided  a  hundred  times  that,  if  a  party  insures  goods  altogether  in  one 
policy,  and  some  of  them  are  of  a  nature  to  make  the  voyage  illegal,  the  whole  contract 
is  illegal  and  void."  Keir  v.  Andrade,  6  Taunt.  498.  This  was  an  action  on  a  policy 
of  insurance  upon  goods  valued  at  .£5,000,  from  London  to  Madeira.  The  plaintiff 
had  placed  on  board  the  vessel  300  barrels  of  gunpowder,  which  were  forbidden  to  be 
exported.  They  obtained  a  license  for  150  of  the  barrels.  The  court  held  that  they 
could  recover  for  the  loss  of  the  150,  but  not  for  the  rest.  See  also  Butler  v.  AUnutt,  1 
Starkie,  222;  Clark  v.  Protection  Ins.  Co.  1  Story,  128. 

1*^  The  cases  of  Camden  v.  Anderson,  6  Term,  723,  and  Marsh  v.  Robinson,  4  Esp. 
98,  were  decided  under  the  Registry  Act  of  26  Geo.  3,  c.  60,  §  3,  which  provides  that 


CH.  XVIIl.]  OF   MARINE   INSUBANCE.  417 

By  the  law  of  nations,  goods,  contraband  of  war,  are  forfeited 
if  captured  by  a  belligerent  against  whom  they  might  be  used.^ 
Goods  are  contraband,  which  are  munitions  of  war,  or  are 
designed  or  capable  of  supporting  an  enemy  in  carrying  on 
war,2  —  as  even  food,  if  sent  to  a  place  which  it  is  sought  to 

all  unregistered  transfers  of  property  in  a  ship,  shall  be  "  utterly  null  and  void  to  all 
intents  and  purposes."  It  was  consequently  decided  in  those  cases,  that  none  but  the 
parties  on  record  had  an  insurable  interest  in  the  freight.  In  Ocean  Ins.  Co.  v.  Polleys, 
13  Pet.  157,  it  was  held  that  an  insurance  was  valid  upon  a  ship  sailing  under  circum- 
stances rendering  her  lial)le  to  forfeiture  for  a  violation  of  the  registry  laws  of  the 
United  States.  It  has  been  generally  held  in  tliis  country,  that  the  insured  need  not 
state  his  interest  at  the  time  of  making  the  insurance,  unless  it  is  asked  for.  Locke  v. 
North  American  Ins.  Co.  13  Mass.  61.  The  case  of  Bixby  v.  Franklin  Ins.  Co.  8  Pick. 
86,  was  as  follows.  The  policy  was  made  in  the  names  of  Bixby,  Valentine  and  Co., 
and  Ilibliert,  the  master.  Tiiis  firm  consisted  of  Bixby,  Valentine,  and  Holmes. 
Before  this  partnership  was  formed,  the  brig  was  owned  by  Holmes  and  Hibbert,  in 
whose  names  she  continued  to  be  registered  at  the  custom-house,  until  the  loss  oc- 
curred. The  court  held  that,  Holmes  having  sold  out  a  portion  of  liis  half,  and  the 
partnership  being  formed,  the  transfer  on  the  books  of  the  firm  was,  between  Holmes 
and  his  partners,  a  sufficient  transfer,  and  that  tlie  fact  of  the  vessel  not  being  trans- 
ferred on  the  custom-liouse  register,  could  not  affect  the  question,  unless  the  sale  should 
be  contested  by  a  creditor  of  Holmes.  Viual  v.  Burrill,  16  Pick.  401,  is  to  the  same 
effect.  The  Registry  Act  of  1850,  c.  27,  provides  merely,  "  That  no  bill  of  sale,  mort- 
gage, hypothecation,  or  conveyance  of  any  vessel  sliall  be  valid  against  any  person 
other  than  the  grantor,  mortgagor,  his  heirs  and  devisees,  and  persons  liaving  actual 
notice  thereof;  unless  such  bill  of  sale,  mortgage,  hypothecation,  or  conveyance  be  re- 
corded in  the  office  of  the  collector  of  the  customs  where  such  vessel  is  registered  or 
enrolled."  There  seems  to  be  no  reason  why  an  owner,  though  the  transfer  to  him 
were  not  registered,  should  not  be  able  to  insure  his  interest,  notwithstanding  the  pro- 
visions of  tlie  statute.  Would  it  be  argued  that  a  purchaser  of  real  estate  could  not  in- 
sure a  house  because  his  deed  was  not  recorded  ?  Under  the  statute  of  3  &  4  Will.  4, 
c.  55,  it  has  been  held  that  a  mortgage  is  good  between  the  parties,  though  the  partic- 
ulars thereof  were  not  indorsed.     Lyster  v.  Payn,  11  Sim.  348. 

1  Richardson  v.  Maine  Ins.  Co.  6  Mass.  114.  "An  insurer  is  not  answerable  for  a 
seizure  and  confiscation  of  goods  for  the  violation  of  the  trade  laws  of  a  foreign  port, 
unless,  with  a  full  knowledge  of  the  trade,  or  by  an  express  undertaking,  he  shall  insure 
them  against  such  seizure."  In  tlie  ease  of  The  Haabet,-2  Rob.  174,  Sir  Wm.  Scott 
says  :  •'  The  right  of  taking  possession  of  cargoes  of  this  description,  commeatus  or  pro- 
visions going  to  the  enemy's  ports,  is  no  peculiar  claim  of  this  country ;  it  belongs  gen- 
erally to  belligerent  nations." 

2  Tlie  following  articles  are  considered  contraband.  Ships  of  war  destined  to  an 
enemy's  port,  to  be  there  sold.  The  Richmond,  5  Rob.  331.  Sail  cloth,  under  all 
circumstances.  Tlie  Neptunus,  3  Robinson,  108.  Pitch  and  tar,  which  are  not  the 
produce  of  the  country  exjjorting.  The  Twee  Juffrowen,  4  Rob.  242 ;  The  Jonge 
Tobias,  1  Rob.  329.  But  it  has  been  held  that  pitch  and  tar  being  Swedish  property, 
and  conveyed  in  Swcdisli  vessels,  are  not  subject  to  confiscation,  but  simply  to  the 
rights  of  preoccupancy  and  preemption.  The  Maria,  1  Rob.  372;  The  Christina  Maria, 
4  Rob.  166;  The  Sarah  Christina,  1  Rob.  241.  See  also  The  Charlotte,  1  Act.  201, 
and  The  Neptunus,  6  Rob.  403.  Hemp,  which  is  not  fit  for  naval  purposes,  (The  Gute 
GescUschaft  Michael,  4  Rob.  94,)  or  which  is  the  produce  of  the  exporting  country,  and 
embarked  in  its  vessels,  (Tiie  Apollo,  4  Rob.  158,)  is  not  considered  contraband,  but 
the  oiius  probandi  lies  with  the  claimant.  The  Evert,  4  Rob.  354.  Rosin  is  contraband 
if  destined  for  a  military  port  of  the  enemy.  The  Nostra  Signora  De  Bcgona,  5  Rob, 
97.  Brimstone,  under  some  circumstances,  will  be  considered  contraband.  The  Ship 
Carpenter,  2  Act.  11.  Tallow,  if  destined  to  a  port  merely  of  naval  equipment,  will  be 
deemed  contraband,  but  not  if  the  port  possess  also  an  extensive  trade  and  mercantile 
character.  The  Neptunus,  6  Rob.  403.  Timber,  for  ship  building,  also  masts,  if  going 
to  an  enemy's  port  of  naval  equipment,  become  contraband.  The  Staadt  Embden,  1 
Rob.  29  ;  the  Endraught,  1  Rob.  25 ;  The  Twcnde  Brodre,  4  Rob.  33. 


418 


ELEMENTS    OF   MERCANTILE   LAAV. 


[CII.  XVIII. 


reduce  by  starvation  ; '  and  so  are  any  goods  sent  to  a  blockaded 
port.2  No  contraband  trade  is,  strictly  speaking,  illegal,  in  the 
neutral  country  which  carries  it  on ;  that  is,  the  courts  of  that 
country  will  not  declare  it  illegal,  or  annul  contracts  which  have 
this  trade  in  view,  for  illegality.^  But  if  the  owners  of  a  ship 
contemplate  contraband  trade,  either  in  the  place  they  send  her 
to,  or  in  the  goods  they  put  on  board,  this  is  an  additional  risk, 
which  must  be  communicated  to  the  insurers,  or  the  policy  is 
void.4 

Freight  is  a  common  subject  of  insurance.  In  common  con- 
versation, this  word  means  sometimes  the  cargo  carried,  and 
sometimes  the  earnings  of  the  ship  by  carrying  the  cargo.  The 
latter  is  the  meaning  in  mercantile  law,  and  especially  in  the  law 
of  insurance.^  It  includes  the  money  to  be  paid  to  the  owner  of 
a  ship  by  the  shipper  of  goods,  and  the  earnings  of  an  owner  by 
carrying  his  own  goods,  and  the  amount  to  be  paid  to  him  by 
the  hirer  of  his  ship,  and  the  profits  of  such  hirer,  either  by  carry- 
ing his  own  goods,  or  by  carrying,  for  pay,  the  goods  of  others.^ 

An  interest  in  freight  begins  as  soon  as  the  voyage  is  deter- 
mined upon,  and  the  ship  is  actually  ready  for  sea,  and  goods 
are  on  board,  or  are  ready  to  be  put  on  board,  or  are  promised  to 
be  on  board  by  a  contract  binding  on  the  owner  of  the  goods.'^ 

If  a  ship  is  insured  on  a  voyage  which  is  to  consist  of  many 
passages,  and  sail  without  cargo,  but  a  cargo  is  ready  for  her,  or 
contracted  for  her  at  the  first  port  she  is  to  reach  and  sail  from, 

1  The  Jonge  Margaretha,  1  Rob.  189.  In  this  case,  the  law  of  contraband  is  most 
ably  laid  down  by  Sir  Wm.  Scott.  In  The  Edward,  4  Rob.  68,  wines  taken  to  a  naval 
port  of  tlic  enemy,  at  the  time  a  large  fleet  were  there,  were  adjudged  contraband.  So 
cheeses,  of  tlie  kind  usually  furnished  as  naval  stores,  were,  under  similar  circumstances, 
condemned.     The  Zelden  Rust,  6  Rol).  93. 

-  To  justify  a  condemnation  for  a  breach  of  blockade,  three  things  must  be  proved. 
First,  tlie  existence  of  an  actual  blockade ;  second,  the  knowledge  of  the  party;  third, 
some  act  of  violation,  either  1)y  going  in  or  coming  out  with  a  cargo  laden  after  the 
commencement  of  the  blockade.  Per  Sir  Wm.  Scott,  in  tlie  case  of  The  Betsey,  1  Rob. 
9-3.  See  also  The  Ostee,  decided  in  the  Judicial  Committee  of  the  Privy  Council, 
March  29,  18.5.'),  reported  in  The  Law  Reporter,  for  September,  1855,  p.  262. 

2  Gardiner  v.  Smith,  1  Johns.  Cas.  141 ;  Christie  v.  Secrctan,  8  Term,  197,  per  Law- 
rence, J. 

*  See  ante,  p.  409,  n.  4.     Pond  v.  Smith,  4  Conn.  297. 

^  Robinson  v.  Manufacturers'  Ins.  Co.  1  Met.  145,  per  Shaw,  C  J. ;  Adams  i-.  Penn. 
Ins.  Co.  1  Rawlc,  97,  106. 

«  Clark  V.  Ocean  Ins.  Co.  16  Pick.  289. 

■^  Truscott  V.  Christie,  2  Brod.  &  Biug.  320 •,  Thompson  v.  Taylor,  6  Term,  478; 
Mackenzie  v.  Shedden,  2  Camp.  431 ;  Ue  Vaux  v.  J'Anson,  5  Bing.  N.  C.  519  ;  Forbes 
V.  Aspinall,  13  East,  323.  But  where  the  parties  have  expressly  stipulated  that  the 
risk  is  to  commence  when  tlie  goods  are  laden  on  board,  a  cargo  engaged,  but  not 
laden,  will  not  be  covered.     Gordon  v.  Am.  Ins.  Co.  of  N.  Y.  4  Denio,  360. 


en.  XYIII.]  or   MARINE   INSUEANCE.  419 

the  owner  has  an  insurable  interest  in  the  freight  from  the  day 
on  which  he  sails  from  his  home  port.' 

If  one  makes  advances  towards  the  freight  he  is  to  pay,  and 
this  is  to  be  repaid  to  him  by  the  ship-owner,  if  the  freight  is  not 
earned,  the  advancer  has  no  insurable  interest  in  what  he  ad- 
vances j^  but  if  he  is  to  lose  it,  without  repayment,  if  the  ship  be 
lost  or  the  freight  not  earned,  he  has  an  insurable  interest.^ 


SECTION  iv: 

OF   PRIOR   INSURANCE. 

Our  marine  policies  generally  provide  for  this  by  a  clause,  to 
the  effect,  that  the  insurers  shall  be  liable  only  for  so  much  of 
the  property  as  a  prior  insurance  shall  not  cover.  The  second 
covers  what  the  first  leaves,  the  third  what  the  second  leaves, 
and  so  on ;  and  as  soon  as  the  whole  value  of  the  property  is 
covered,  the  remainder  of  that  policy,  and  the  subsequent  poli- 
cies, have  no  effect.*  This  priority  relates  not  merely  to  the  date 
of  the  instrument,  but  to  the  actual  time  of  insurance.^  Some- 
times the  policy  provides  that  the  insured  shall  recover  only  the 
same  proportion  of  the  whole  loss  which  i|le  amount  insured  in 
that  policy  is  of  the  whole  amount  insured  by  all  the  policies  on 
the  whole  property.^ 

When  a  prior  policy  is  deducted,  from  this  deduction  is  taken 
the  amount  of  the  premium  paid  for  the  insurance.''' 

It  sometimes  happens  that  the  property  is  increased  in  value, 
or  in  the  valuation,  after  the  first  insurance  is  effected ;  but  in 
settling  with  a  second,  only  the  actual  amount  covered  by  the 
first  is  deducted.^ 

1  Flint  V.  Flemyng,  1  Barn.  &  Ad.  45 ;  Forbes  v.  Aspinall,  13  East,  323  ;  Hart  v. 
Delaware  Ins.  Co.  2  Wash.  C.  C.  346  ;  De  Longuemere  v.  Phoenix  Ins.  Co.  10  Johns. 
127  ;   Adams  v.  Fenn.  Ins.  Co.  1  Rawle,  97,  106. 

•■2  De  Silvale  v.  Kendall,  4  M.  &  S.  37 ;  Manfield  v.  Maitland,  4  B.  &  Aid.  585  ; 
Wilson  V.  Royal  Exch.  Ass.  Co.  2  Camp.  626. 

3  Manfield  v.  Maitland,  4  B.  &  Aid.  582  ;  Robbins  v.  N.  Y.  Ins.  Co.  1  Hall,  325. 

4  Perkins  v.  N.  E.  Mar.  Ins.  Co.  12  Mass.  214;  Col.  Ins.  Co.  v.  Lynch,  11  Johns. 
233. 

5  Lee  V.  Mass.  F.  &  M.  Ins.  Co.  6  Mass.  208. 

^  Lucas  V.  Jefferson  Ins.  Co.  6  Cowen,  635  ;  Howard  Ins.  Co.  of  N.  Y.  'v.  Scribuer, 
5  Hill,  298. 

T  2  Phillips,  Ins.  §  1257. 

»  Murray  v.  Ins.  Co.  of  Penn.  2  Wash.  C.  C,  186 ;  M'Kim  v.  Phoenix  Ins.  Co.  2  Wash. 
C.  C.  89. 


420  ELEMENTS   OF  MERCANTILE   LAW.  [cil.  XVIII. 

A  subsequent  policy  may  be  suspended  by  the  fact  that  prior 
policies  cover  all  the  property,  and  when  any  of  these  prior  poli- 
cies is  exhausted,  the  next  policy  begins  to  take  effect.^ 

If  all  once  attach,  and  afterwards  the  property  is  diminished, 
we  should  prefer  the  rule  that  all  the  policies  should  be  dimin- 
ished pro  rata.  Tt  has  been  held,  however,  that  the  rule  as  to 
prior  policies  operates,  and  the  last  policy  is  discharged  or  les- 
sened by  the  whole  amount  of  the  diminution.^ 

Where  no  provision  is  made  in  the  policies  as  to  priority,  all 
are  insurers  alike,  but  all  together  only  of  the  whole  value  at 
risk.  The  insured,  therefore,  may  recover  of  any  one  insurer  at 
his  election,  and  this  insurer  may  compel  the  others  to  contribute 
to  him  in  proportion  to  their  respective  insurances.^ 

Insurances  may  be  simultaneous,  and  then  no  clause  as  to 
prior  policies  has  any  application,  and  all  the  insurances  are  lia- 
ble pro  rata^  They  are  simultaneous,  if  said  to  be  so  in  the 
policies ;  or,  if  made  on  the  same  day,  and  bearing  the  same 
date,  and  there  is  no  evidence  as  to  which  was,  in  fact,  first 
made.^ 


g|        SECTION  V. 

OF   DOUBLE   INSURANCE   AND   REINSURANCE. 

If  there  be  double  insurance,  either  simultaneously  or  by  suc- 
cessive policies  in  which  priority  of  insurance  is  not  provided 
for,  we  have  seen  that  all  are  insurers,  and  liable  pro  rata.^ 

But  there  is  no  double  insurance,  unless  all  the  policies  insure 
the  very  same  subject-matter,  and,  taken  together,  exceed  its 
whole  value.'^    Nor  is  there  double  insurance  as  to  any  particular 

'  Kent  V.  Manufacturers'  Ins.  Co.  18  Pick.  19. 

2  Am.  Ins.  Co.  v.  Griswold,  14  Wend.  399.  See  also  the  dissenting  opinion  of  Mr. 
Senator  Tracy,  p.  502;  2  Phillips  on  Ins.  §  1261. 

3  Lucas  V.  Jefferson  Ins.  Co.  6  Cowen,  6.35;  Pisk  v.  Masterman,  8  M.  &  "W.  165; 
Craig  V.  Murgatroyd.  4  Yeates,  161  ;  Millaudon  v.  Western  Mar.  &  Fire  Ins.  Co.  9 
Louis.  27  ;  Thurston  v.  Koch,  4  Dall.  348. 

*  Potter  V.  Marine  Ins.  Co.  2  Mason,  475  ;  Wiggin  v.  Suffolk  Ins.  Co.  18  Pick.  145. 

5  Though  both  bear  date  the  same  day,  parol  evidence  is  admissible,  to  show  which 
was  n.ade  first.    Potter  v.  Marine  Ins.  Co.  ut.  cit.  sup. 

^  See  supra,  n.  4. 

^  Perkins  v.  N.  Eng.  Mar.  Ins.  Co.  12  Mass.  214;  Columbian  Ins.  Co.  v.  Lynch,  11 
Johns.  233;  Warder  v.  Horton,  4  Binn.  529;  Howard  Ins.  Co.  v.  Scribner,  5  Hill, 
298. 


en.  XVIII.]  OF  MARINE   INSURANCE.  421 

one  of  these  policies,  unless  the  whole  amount  insured  by  all  ex- 
ceed the  value  that  is  insured  by  that  policy.'  So,  if  the  whole 
amount  insured  exceeds  the  valuation  of  the  subject-matter  as  it 
stands  in  any  one  policy,  it  is  said  that  there  is  over  insurance  as 
to  that.2 

Many  insurances  of  the  same  subject-matter,  for  the  benefit  of 
different  parties,  do  not  constitute  double  insurance.^ 

Reinsurance  is  lawful;  for  whoever  insures  another,  has  as- 
sured a  risk  against  which  he  may  cause  himself  to  be  insured. 
This  is  often  done  by  companies  who  wish  to  close  their  accounts, 
to  lessen  their  risks,  or  get  rid  of  some  especial  risk.^ 


SECTION  VI. 

OF    THE   MEMORANDUM. 

This  word  is  retained,  because  the  English  policies  have  at- 
tached to  them  a  note  or  memorandum  providing  that  the  insurers 
shall  not  be  liable  for  any  loss  upon  certain  articles  therein  enu- 
merated, (and  thence  called  memorandum  articles,)  unless  it  be 
total,  or  greater  than  a  certain  percentage.  In  our  policies,  the 
same  thing  is  provided  for,  but  usually  by  a  clause  contained  in 
the  body  of  the  policy.  The  general  puri)ose  is  to  guard  against 
a  liability  for  injuries  which  may  very  probably  not  arise  from 
maritime  peril,  because  the  articles  are  in  themselves  perishable  ; 
but  which  injuries  it  might  not  be  easy  to  refer  to  the  precise 
causes  which  produced  them.^ 

1  Kane  v.  Comm.  Ins.  Co.  8  Jolms.  229;  Mintiirn  v.  Colnmbian  Ins.  Co.  10  Johns. 
75 ;  Pleasants  v.  JMaryland  Ins.  Co.  8  Cranch,  55 ;  Murray  v.  Ins.  Co.  of  Penn,  2 
Wasli.  C.  C.  18G. 

-  Bonsfield  v.  15arnes,  4  Camj).  228.    Sec,  however,  1  Phillips  on  Ins.  §  370. 

3  Warder  v.  Ilorton,  1  Binn.  .'')29 ;  Godin  v.  London  Ass.  Co.  1  Burr,  489. 

*  Sec  ante,  i>.  412,  n.  7. 

^  The  law  of  England  and  of  tliis  country  differs  essentially  in  regard  to  memoran- 
dum articles.  The  law  liero  is,  that  if  the  goods  arrive  in  specie  at  the  port  of  destina- 
tion, though  utterly  wortldess,  the  underwriters  arc  not  liable.  The  rule  is  founded 
on  tlic  case  of  Cocking  v.  Erazer,  Park  on  Ins.  247.  In  which  case  Lord  Maiisjleld 
used  the  following  language :  "  The  tish  may  all  come  to  port,  though  from  the  na- 
ture of  the  commodity  it  may  be  damaged — it  may  be  stinking — still,  as  it  specifically 
remains,  the  underwriter  is  discharged."  This  doctrine  is  shaken  in  England  by  the 
cases  of  Burnett  v.  Kensington,  7  Term,  210  ;  Dyson  v.  Rowcroft,  3  Bos.  &  Pul.  474  ; 
Cologan  V.  London  Ass.  Co.  5  M.  &  S.  447.  The  remarks  of  Piatt,  B.,  in  IMontoya 
V.  London  Ass.  Co.  4  Eng.  Law  &  Eq.  503,  show  also  that  in  England  the  goods 
must  be  of  value  on  arrival.  The  leading  American  cases  sustaining  Cocking  v.  Fra- 
zer,  are  Neilson  v.  Col.  Ins.  Co.  3  Caines,  108 ;  Morcan  v.  U.  S.  Ins.  Co.  1  Wheat.  219 ; 

36 


422  ELEMENTS    OF   MERCANTILE   LAW.  [ciI.  XVIII. 

The  articles  and  the  percentage  vary  very  much  at  diflerent 
times  and  in  different  States.  Perhaps  as  good  a  list  of  them 
for  practical  purposes  as  can  be  found  anywhere,  is  given  in 
1  Phillips  on  Insurance,  (3d  ed.)  note  to  fifty-fourth  section. 


SECTION  VIL 

OF   WARRANTIES. 

A  stipulation  or  agreement  in  the  polici/,  that  a  certain  thing 
shall  be  or  not  be,  is  a  warranty.  And  every  warranty  must  be, 
if  not  strictly,  at  least  accurately  complied  with.  Nor  is  it 
an  excuse  that  the  thing  is  not  material;'  or  that  the  breach 
was  not  intended,  or  not  known  ;  or  that  it  was  caused  by  an 
agent  of  the  insured.^  A  warranty  is  equally  effectual  if  written 
upon  a  separate  paper,  but  referred  to  in  the  policy  itself  as  a 
warranty .3  And  the  direct  assertion  or  allegation  of  a  fact  may 
constitute  a  warranty.^ 

Saltns  w.  Ocean  Ins.  Co.  14  Johns.  138  ;  Williams  v.  Kennebec  Ins.  Co.  31  Maine, 
455 ;  Robinson  v.  Commonwealth  Ins.  Co.  3  Sumner,  224 ;  Hugg  v.  Augusta  Ins.  & 
Banking  Co.  7  Howard,  595.  A  more  difficult  question  arises  where  the  voyage  is 
temporarily  broken  up  at  an  intermediate  port.  In  Reimer  v.  Ringrose,  4  Eng.  L.  & 
Eq.  388,  it  was  held,  that  there  was  no  total  loss,  unless  the  value  of  tlie  goods,  on  ar- 
rival, would  be  less  than  the  expenses  of  bringing  them  on.  In  Rosetto  v.  Gurney,  7 
Eng.  L.  &Eq.  461,  this  rule  was  held  to  be  incorrect,  and  the  one  adopted  that  the 
goods,  on  arrival,  must  be  of  sufficient  value  to  pay  all  the  expenses  at  the  intermedi- 
ate port,  and  the  advanced  freight,  if  any,  for  sending  them  on.  The  rule  in  this 
country  is,  that  there  is  a  total  loss  at  an  intermediate  port,  first,  when  neither  the  origi- 
nal ship  nor  any  other  can  be  procured  to  take  on  the  goods  "in  their  then  damaged 
state;"  second,  when  the  goods  are  in  such  a  state,  by  reason  of  a  peril  insured  against, 
that  the  health  and  safety  of  the  crew  would  be  endangered  by  carrying  them  on.  Be- 
sides thsfiuthorities  above  cited,  the  following  cases  are  in  point.  Marcardier  v.  The 
Chesapeake  Ins.  Co.  8  Cranch,  39;  Poole  v.  Protection  Ins.  Co.  14  Conn.  58  ;  Ogden 
V.  Gen.  Mut.  Ins.  Co.  2  Duer,  N.  Y.  Rep.  219.  If,  at  the  intermediate  port,  by  the 
exercise  of  reasonable  care  and  diligence,  the  master  can  put  the  goods  in  a  condi- 
tion to  be  sent  on,  it  is  incumbent  on  him  to  do  so.  Williams  v.  Kennebec  Ins.  Co. 
31  Maine,  455;  Navone  w.  Had  don,  9  Common  Bench,  30;  Lord  v.  Neptvme  Ins.  Co. 
decided  by  the  Supreme  Court  of  Massachusetts,  March  term,  1854 — not  yet  reported. 
See  post,  p.  475,  n.  1. 

1  Newcastle  F.  Ins.  Co.  v.  Macmorran,  3  Dow,  262 ;  Blackhurst  v.  Cockell,  3  Term, 
360,  per  Buller,  J. 

2  The  only  question  is,  "  Is  the  warranty  broken  1 "  Duncan  v.  Sun  Eire  Ins.  Co.  6 
Wend.  488. 

3  Routledge  v.  Burrell,  1  H.  B.  254;  Worsley  v.  Wood,  6  Term,  710.  See  also 
Bean  v.  Stupart,  Doug.  11 ;  Jennings  v.  Chenango  Co.  Mut.  Ins.  Co.  2  Den.  75;  Glen- 
dale  Manuf.  Co.  v.  Protection  Ins.  Co.  21  Conn.  19  ;  Williams  v.  N.  Eng.  Mut.  Ins. 
Co.  31  Maine,  219;  Burritt  v.  Saratoga  County  M.  F.  Ins.  Co.  5  Hill,  188. 

*  Where  insurance  was  made  on  property  described  to  be  on  board  the  "  Swedish 
brig  Sophia,"  it  was  held  to  be  a  warranty  that  the  brig  was  Swedish.  Lewis  v. 
Thatcher,  15  Mass.  433;  Barker  d.  Phoenix  Ins.  Co.  8  Johns.  307.    If  the  description 


en.  XVIII.]  OF   MARINE   INSURANCE.  423 

'.  If  the  breach  exists  at  the  commencement  of  the  risk,  it  avoids 
the  whole  policy,  although  the  warranty  was  complied  with  before 
a  loss  ;  ^  and  although  all  other  risks  were  distinct  from  that  to 
which  the  warranty  related ;  and  even  if  the  breach  was  caused 
by  one  of  the  risks  against  which  there  was  insurance.^ 

If  the  breach  occur  after  the  risk  begins,  and  before  a  loss,  and 
is  not  caused  or  continued  by  the  fault  of  the  insured,  the  in- 
surers arc  held  ;  ^  as  they  are  if  a  compliance  with  the  warranty 
becomes  illegal  after  the  policy  attaches,  and  it  is  therefore 
broken.'* 

The  usual  subjects  of  express  warranty  are  :  first,  the  owner- 
ship of  the  property,  which  is  chiefly  important  as  it  secures  the 
neutrality,  or  freedom  from  war  risks  of  the  property  insured. 
The  neutrality  is  sometimes  expressly  warranted ;  and  this  war- 
ranty is  not  broken,  if  a  part  of  the  cargo  that  is  not  insured  is 
belligerent.^  But  it  is  broken  if  a  neutral  has  the  legal  title,  but 
only  in  trust  for  a  belligerent.^  The  neutrality  of  the  ship  and 
of  the  cargo  must  be  proved  by  the  ship's  having  onboard  all  the 
usual  and  regular  documents.''  False  papers  may,  however,  be 
carried  for  commercial  purposes,  either  when  leave  is  given  by 
the  insurers,  or  when  it  is  permitted  by  a  positive  and  established 
usage.^ 

If  neutrality  is  warranted,  it  must  be  maintained  by  a  strict 
adherence  to  all  the  rules  and  usages  of  a  neutral  trade  or  em- 
ployment.^ Without  warranty,  every  neutral  ship  is  bound  to 
respect  a  blockade  which  legally  exists  by  reason  of  the  presence 

is  merely  collateral,  it  will  not  amount  to  a  warranty.     Martin  v.  Fishing  Ins.  Co.  20 
Pick.  3S9  ;  Mackie  v.  Pleasants,  2  Binn.  363. 

1  Rich  V.  Parker,  7  Term,  705. 

2  Ho  re  V.  Whitmore,  Cowp.  784.    See  also  1  Phillips  on  Ins.  770 ;  1  Arnold  on  Ins.  584. 

3  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532.  In  this  case  it  was  held,  that  if  a  vessel 
was  seaworthy  at  the  commencement  of  the  voyage,  the  risk  attached  ;  but  if  she  aftci'- 
wards  became  unseaworthy,  and  a  loss  happened,  which  could  not  be  attributed  to  her 
unseaworthiness,  the  underwriters  would  be  held  responsible.  See  also  Copelaud  v. 
New  England  Marine  Ins.  Co.  2  Met.  432. 

*  Brewster  I'.  Kitchell,  1  Salk.  198. 

^  Livingston  v.  Maryland  Ins.  Co.  6  Cranch,  274. 

6  Goold  V.  United  Ins.  Co.  2  Caines,  73  ;  Calbreath  v.  Gracy,  1  Wash.  C.  C.  219; 
Bayard  v.  Mass.  F.  &  M.  Ins.  Co.  4  Mason,  256. 

''Coolidge  V.  N.  Y.  Fircm.  Ins.  Co.  14  Johns.  308 ;  Iliggins  v.  Livermore,  14  Mass. 
106;  Barker  v.  Phanix  Ins.  Co.  8  Johns.  307  ;  The  San  Jose,  2  Gall.  285;  The  Vigi- 
lantia,  1  Chr.  Pob.  11;  Slcght  v.  Hartshorn,  2  Johns.  531  ;  Griffith  v.  Ins.  Co.  of  N. 
A.  5  Bin.  464 ;  Carrere  r.  Union  Ins.  Co.  3  Harris  &  Johns.  324. 

**  Livingston  v.  Maryl.  Ins.  Co.  7  Cranch,  506;  Calbreath  v.  Gracy,  1  Wash.  C.  C. 
219.     See  also  Horneyer  v.  Lushington,  15  lilast,  46;  Bell  v.  Bromfield,  15  East,  364. 

9  The  Princessa,  2  Rob,  52. 


424  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

of  an  armed  force  sufficient  to  preserve  it,  and  of  which  the  neu- 
tral has  knowledge.^ 

The  second  most  common  express  warranty,  is  that  of  the 
time  of  the  ship's  sailing.  She  sails  when  she  weighs  anchor  or 
casts  off  her  fastenings,  and  gets  under  way — if  she  be  then  ready 
for  sea  and  intended  for  sea — although  stopped  immediately 
after,  or  driven  back.^  But  however  ready  and  intended,  if  she  is 
stopped  before  she  gets  under  way,  this  is  a  breach  of  the  war- 
ranty of  sailing."  Nor  is  it  complied  with  by  leaving  a  place  to 
return  to  it  immediately;*  or  by  gtnng  from  one  port  of  the  coast 
or  island  to  another.^  If  the  ship  is  warranted  "  in  such  a  harbor 
or  ])ort,"  or  "where  the  ship  now  is,"  this  means  at  the  time  of 
the  insurance.*^  And  "warranted  in  port"  means  the  port  of  in- 
surance, unless  another  port  is  expressed  or  distinctly  indicated.'^ 


SECTION  VIII. 

OF   IMPLIED   WARRANTIES. 

The  most  important  of  these  warranties,  —  which  the  law 
makes  for  the  parties,  although  they  may,  if  they  please,  make 
them  for  themselves,  —  is  that  of  seaivorthiness.  By  this  is 
meant,  that  every  person  who  asks  to  be  insured  upon  his  ship, 
by  the  mere  force  and  operation  of  law,  warrants  that  she  is, 
in  every  respect  —  of  hull,  sails,  rigging,  officers,  crew,  provisions, 
implements,  papers,  and  the  like  —  competent  to  enter  upon  and 

1  Sec  ante,  p.  418,  n.  2.  See  also  The  Artlinr,  I  Dods.  423  ;  The  Ocean,  5  Rol).  91 ; 
The  Vroiiw  Judith,  1  Rob.  152  ;  Tlie  Neptunus,  2  Hob.  110;  Daln-leish  v.  Hodgson,  7 
Bing.  495  ;  The  Vrow  Johanna,  2  Rob.  109 ;  The  Dispatch,  1  Act.  i63 ;  The  Alexander, 
4  Rob.  93  ;  The  Fortuna,  5  Rob.  27;  The  Christiausberg,  6  Rob.  378;  The  Adonis,  5 
Rob.  256  :  The  Hoffnung,  6  Rob.  116. 

-  Thellusson  ?'.  Stai)lcs,  1  Doug.  3f.6,  note ;  Cockrane  v.  rislicr,  2  Cr.  &  Mee.  581 ; 
Bond  V.  Nutt,  Cowp.  601  ;  Bowen  v.  Hope  Ins.  Co.  20  Pick.  275. 

^  On  this  point  the  authorities  are  somewhat  conflicting.  See  Lang  v.  Andcrdon.  3 
B.  &  C.  495;  Bond  v.  Nutt,  Cowpcr,  601  ;  Earlc  v.  Harris,  Douglas,  357  ;  Tliellussou 
V.  Fergusson,  1  Doug.  361  ;  Nelson  v.  Salvador,  1  Mood.  &  Mai.  309.  Tlie  distinction 
between  the  cases  seems  to  be  this : — If  the  risk  is  to  commence  onlj^  at  the  sailing, 
then  the  vessel  must  actually  sail.  But  if  the  risk  had  begun  previously,  and  the  vessel 
was  ready  to  sail  at  the  time,  but  was  prevented  by  a  peril  insured  against,  the  war- 
ranty to  sail  is  complied  with. 

*  Cockrane  v.  Fislier,  2  Cr.  &  Mecs.  581. 

^Wright  V.  Shitiher,  11  East,  515;  Dennis  v.  Ludlow,  2  Caines,  111  ;  Risdale  v. 
Newnham,  3  M.  &  S.  456. 

^  Callaghan  v.  Atlantic  Ins.  Co.  1  Edw.  Ciian.  64. 

''  Colby  V.  Hunter,  3  C.  &  P.  7 ;  Keyser  v.  Scott,  4  Taunt.  660 ;  Dalglcish  v.  Brooke, 
15  East,  295. 


ClI.  XVIII.]  OF   MARINE    INSURANCE.  425 

prosecute  that  voyage  at  the  time  proposed,  and  encounter 
safely  the  common  dangers  of  the  sea.^  If  this  warranty  be  not 
complied  with,  the  policy  does  not  attach,  whether  the  breach  b^ 
known  or  not,  unless  there  is  some  peculiar  clause  in  the  policy 
waiving  this  objection.^ 

If  the  ship  be  seaworthy  and  the  policy  attaches,  no  subse- 
quent breach  discharges  the  insurers  from  their  liability  for  a  loss 
previous  to  the  breach.^  Even  if  it  does  not  attach  at  the  begin- 
ning of  the  voyage,  if  the  unseaworthiness  be  capable  of  prompt 
and  effectual  remedy,  and  be  soon  and  entirely  remedied,  the 
policy  may  then  attach.  Especially  if  it  could  be  considered  as 
attaching  in  the  port,  and  then  as  suspended  only  by  the  sailing 
in  unseaworthy  condition,  and  then  reviving,  or  reattaching,  on 
repair.*  The  true  rule  should  be,  that  if  unseaworthiness  prevents 
the  policy  from  attaching  at  the  proper  commencement  of  the 
risk,  the  contract  becomes  a  nullity.^ 

,  If  she  becomes  unseaworthy  in  the  course  of  the  voyage,  from 
a  peril  insufficient  to  produce  it  in  a  sound  vessel,  this  may  be  evi- 
dence of  inherent  weakness  and  original  unseaworthiness.^  But 
if  originally  seaworthy,  and  by  any  accident  made  otherwise,  the 
policy  continues  to  attach  until  she  can  be  restored  to  a  seawor- 
thy condition  by  reasonable  endeavors.  And  the  general  rule  is 
that  she  must  be  so  restored  as  soon  as  she  can  be.  It  is  the  duty 
of  the  master  to  repair  her  as  soon  as  he  can  ;  by  the  aid  of 
another  ship  if  that  may  be,  but  otherwise  not  to  keep  her  at 
sea  if  she  can  readily  make  a  port  where  she  can  be  made  sea- 
worthy ;  and  not  to  leave  that  port  until  she  is  seaworthy.'''     The 

1  Dixon  V.  Sadler,  5  M.  &  W.  405,  414,  per  Parhe,  B. 

2  Small  V.  Gibson,  3  Eng.  L.  &  Eq.,  305  ;  Tidmarsh  v.  Washington  F.  &  M.  Ins.  Co. 
4  Mason,  441  ;  Copeland  v.  New  Eng.  Mar.  Ins.  Co.  2  Mete.  437 . 

^  After  the  risk  has  once  commenced,  the  underwriters  are  liable  for  all  losses  which 
are  not  the  consequence  of  a  subsequent  breach  of  the  implied  warranty.  Am.  Ins.  Co. 
V.  Ogden,  20  Wend.  287  ;  Copeland  v.  N.  E.  Mar.  Ins.  Co.  2  Mete.  432. 

*  See  Taylor  v.  Lowell,  3  Mass.  331,  confirmed  in  Merch.  Ins.  Co.  v.  Clapp,  11  Pick, 
56.  Sec,  also,  Weir  v.  Aberdein,  2  B.  &  Aid.  320;  Garrigues  v.  Coxe,  1  Binn.  592 ; 
M'Millan  v.  Union  Ins.  Co.  Kice  (S.  Car.)  248. 

*  Copeland  v.  N.  E.  M.  Ins.  Co.  2  Mete.  437. 

•^  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227,  237.  In  this  case  Shaw,  C.  J.,  says  : 
'•  But  where  the  proof  shows  in  point  of  fiict,  that  the  vessel  sprung  a  leak  by  the  start- 
ing of  a  butt  or  otlier  internal  defect,  without  any  accident  or  stress  of  weather,  but  by 
the  ordinary  pressure  of  the  cargo,  and  the  action  of  the  wind  and  sea,  the  ordinary 
presumption  of  seaworthiness  is  rebutted."  See,  also,  Talcot  v.  Cora.  Ins.  Co.  2 
Johns.  124 ;  Mills  r.  Roebuck,  Marshall  on  Ins.  161  ;  Bullard  v.  Roger  Williams  Ins. 
Co.  1  Curtis,  148  ;    Cort  v.  Del.  Ins.  Co.  2  Wash.  C.  C.  375. 

'  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227.    "  It  would  seem  to  be  more  consistent 

36* 


426  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVIII. 

neglect  of  the  master  would  not  generally  discharge  the  insurers,' 
but  it  is  the  rule  that  a  ship  must  not  leave  a  port  in  an  unsea- 
worthy  condition,  if  she  could  there  be  made  seaworthy ;  if  she 
does,  the  insurers  are  no  longer  held.  But  "their  liability  may  be 
not  destroyed  but  only  suspended,  if  the  seaworthiness  be  cured 
at  the  next  port,  especially  if  that  be  not  a  distant  port.^  For  a 
loss  happening  while  their  liability  is  suspended,  they  are  not  lia- 
ble, whether  the  loss  was  occasioned  by  that  unseaworthiness  or 
'  not.2 

There  cannot  possibly  be  a  definite  and  universal  standard  for 
seaworthiness.  The  ship  must  be  fit  for  her  voyage  or  for  her 
place.  But  a  coasting  schooner  needs  one  kind  of  fitness,  a 
freighting  ship  to  Europe  another,  a  whaling  ship  another,  a  ship 
insured  only  while  in  port  another.  So  as  to  the  crew,  or  provi- 
sions, or  papers,  or  a  pilot,  or  certain  furniture,  as  a  chronometer 
or  the  like;  or  the  kind  of  rigging  or  sails.  In  all  these  respects, 
much  depends  upon  the  existing  and  established  usage.  There 
is,  perhaps,  no  better  test  than  this;  the  ship  must  have  all  those 
things,  and  in  such  quantity  and  of  such  quality  as  the  law 
requires,  provided  there  is  any  positive  rule  of  law  affecting; 
them ;  and  otherwise  such  as  would  be  deemed  requisite  accord- 
ing to  the  common  consent  and  usage  of  persons  engaged  in; 

with  the  nature  of  the  contract,  the  intent  of  the  parties,  and  the  purposes  of  justice 
and  policy,  to  liokl  that  ut'icr  the  policy  has  once  attached,  the  im]ilicd  warranty  should 
be  so  construed,  as  to  exempt  the  underwriter  from  all  loss  or  damage,  wliich  did  or, 
might  proceed  from  any  cause  thus  warranted  against ;  but  to  hold  him  still  responsi- 
ble for  those  losses  whicli  by  no  possibility  could  ho  occasioned  l)y  peril  increased  or 
affected  by  the  breach  of  such  implied  warranty."  See,  also,  Copeland  v.  New  Eng. 
M.  Ins.  Co.  2  Mete.  4.32  ;  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532;  S.  C.  20  Wend.  287  ;i 
Putnam  v.  Wood,  3  Mass.  481  ;    Hazard  v.  New  Eng.  Mar.  Ins.  Co.  1  Sumn,  218. 

1  The  question  how  far  the  owners  are  respousiljle  for  the  gross  negligence  of  the 
master,  so  as  to  exonerate  the  insurers,  has  given  rise  to  considerable  discussion.  The 
English  Court  of  Exchequer,  in  the  case  ofDixon  v.  Sadler,  5  M.  &  W.  415,  decided 
that  if  a  master  threw  over  ballast,  so  that  the  vessel  became  unseaworthy,  the  under- 
writers were  not  discharged.  See,  also.  Shore  v.  Cental!,  7  B.  &  C.  798,  n. ;  Paddock 
V.  The  Franklin  Ins.  Co.  11  Pick.  227  ;  American  Ins.  Co.  v.  Ogden,  20  Wend.  287.; 
Hazard  v.  N.  E.  Mar.  Ins.  Co.  1  Sumn.  218  ;  Copeland  v.  N.  E.  Mar.  Ins.  Co.  2  Mete. 
432.  In  this^last  case,  Sluiic,  C.  J.,  after  an  elaborate  review  of  the  authorities,  says: 
"  No  ease  has  gone  the  length  of  deciding,  that  where  there  is  a  long  voyage,  consist- 
ing of  several  stages,  or  where  there  is  a  policy  on  time,  which  may  last  several  years, 
if  the  vessel  becomes  damaged  and  unfit  for  navigation,  it  is  not  the  duty  of  the  owner 
to  make  the  necessary  repairs,  to  fit  her  for  the  service  on  M'hich  she  is  destined,  and  in 
case  of  failure  to  do  so,  and  a  loss  happens  from  that  cause,  that  the  insurers  are  liable, 
as  for  a  loss  by  one  of  the  perils  insured  against.  Nor,  we  think,  lias  any  case  decided 
that,  in  the  absence  of  proof  of  any  other  provision  for  the  performance  of  this  duty, 
the  captain  shall  not  be  presitraed  to  be  the  agent  of  the  owner  for  this  purpose.  If  so, 
we  think  the  English  and  American  cases  can  be  reconciled." 

^  Paddock  v.  Franklin  Ins.  Co.  1 1  Pick.  227  ;  Starbuck  v.  New  Eng.  Mar.  Ins.  Co. 
19  Pick.  198;  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532;  S.  C.  20  Wend.  287. 

^  See  Taylor  v.  Lowell,  3  Mass.  331. 


en.  XVIII.]  OF  MARINE   INSURANCE.  427 

that  trade.  And  the  reason  for  this  rule  is,  that  this  is  exactly 
what  the  insurers  have  a  right  to  expect,  and  if  the  insured 
intend  any  thing  less,  or  the  insurers  desire  any  thing  more,  it 
should  bf  tlie  subject  of  special  bargain.^ 

If  a  policy  be  intended  to  attach  when  a  ship  is  at  sea,  —  as, 
for  example,  upon  a  whaler  that  has  been  out  a  year  or  more, — 
we  should  say  the  same  principle  would  apply,  and  ought  to  be 
sufficient  as  a  rule  of  law,  although  it  might  sometimes  involve 
difficult  questions  of  facts.  That  is,  we  think  the  ship  must  be 
seaworthy  in  that  sense  and  in  that  way,  in  which  a  ship  of  her 
declared  age,  size,  employment  and  character,  after  being  at  sea 
at  that  time  under  ordinary  circumstances,  ought  to  be  in,  and 
may  be  expected  to  be  in,  by  all  concerned.^  It  seems  to  be 
admitted  that  tiie  standard  of  seaworthiness  is  to  be  found  from 
the  usage  and  understanding  of  merchants,  at  the  place  where 
the  ship  belongs,  and  not  at  that  where  the  ship  is  insured.^ 

If  the  question  arises  on  a  time-policy,  whether  a  ship  must 
be  at  the  beginning  seaworthy,  and  in  such  condition  that  she 
will  remain  so  unless  some  accident  intervene  during  the  whole 

1  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227;  Wcdderhurn  v.  Boll,  1  Camp.  1; 
Woolf  i;.  Clasrgett,  3  Ksp.  257 ;  Chase  v.  Eade  Ins.  Co.  5  Pick.  51 ;  Deblois  v.  Ocean 
Ins.  Co.  IG  Pick.  303;  Clifford  v.  Hunter,  3  C.  &  P.  16  ;  TreadwcU  v.  Un.  Ins.  Co, 
6  Cowcn,  270;  Law  v.  Hollinixsworth,  7  Term,  IGO  ;  Tidmarsh  v.  Washington  F.  &  M, 
Ins.  Co.  4  Mason,  439  ;  Pullard  v.  PvOgcr  Williams  Ins.  Co.  1  Curtis,  148  ;  Small  v. 
Gibson,  3  Eng.  L.  &  Eq.  299  ;  M'Lanahan  v.  Universal  Ins.  Co.  1  Peters,  170. 

2  In  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227,  the  insui'ance  -was  on  the  cargo  of 
the  ship  Tarquin,  "lost  or  not  lost,  now  on  a  whaling  voyage  in  the  Pacific  Ocean." 
The  vessel  had  been  out  over  three  years  when  the  policy  was  effected.  The  court  held 
that  the  policy  related  back  to  the  commencement  of  the  voyage,  and  if  the  ship  was 
then  seaworthy,  the  policy  attached.  But  Shmv,  C.  J.,  goes  on  to  consider  the  case  in 
point.  He  says  it  may  "be  a  matter  of  doubt  whether  the  mle  of  seaworthiness  as  a 
condition  precedent,  would  apply,  when  the  policy  was  to  take  effect  on  a  particular  day 
in  the  latter  part  of  a  long  whaling  voyage  in  distant  seas,  and  intended  to  cover  only 
the  latter  portion  of  such  a  voyage.  He  also  says,  that  though  the  rule  would  be 
probably  applied,  yet  it  would  be  with  great  lilicrality  of  construction,  and  what 
would  be  a  condition  of  things  in  such  a  stage  of  the  voyage  sufficient  to  satisfy 
the  character  of  seaworthiness,  would  fall  fiir  short  of  that  required  at  its  commence- 
ment. Seaworthiness  applies  to  the  intended  uses  and  purposes  to  which  the  vessel 
is  to  be  applied.  Hucks  v.  Thoruton,  Holt,  N.  P.  30.  In  this  case,  the  risk  was  to  com- 
mence August  1, 1806.  The  vessel  sailed  on  her  voyage  in  1805.  Gibbs,  C.  J.,  held, 
that  she  nrust  have  been  seaworthy  at  the  time  the  risk  was  to  commence,  and  although 
the  crew  was  greatly  reduced  in  numbers,  yet,  if  she  had  a  competent  force  to  pursue 
any  part  of  her  adventure,  and  could  be  safely  navigated  home,  she  was  seaworthy. 
See  Cruder  v.  Phil.  Ins.  Co.  2  Wash.  C.  C.  262,  339.  In  Gibson  v.  Small,  24  Eng. 
L.  &  Eq.  36,  Parke,  B.,  says  :  "It  is  undoubted  law  that  there  is  an  implied  warranty 
with  respect  to  a  policy  for  a  voyage,  that  the  ship  sliould  be  seawortliy  at  the  com- 
mencement of  the  voyage,  or  in  port  when  preparing  for  it,  or  had  been  seaworthy  Avhca 
the  voyage  insured  had  been  commenced,  if  the  insurance  is  on  a  vessel  already  at  sea 
for  the  voyage,  which  voyage  being  commensurate  witli  the  risk  insured,  the  warranty  is 
compendiously  described  as  a  warranty  of  seaworthiness  at  the  commencement  of  the 
risk."     See,  also,  remarks  o^  Pollock,  C.  B.,  on  page  43  ;  and  infra,  p.  248,  n.  1. 

^  Tidmarsh  v.  Washington  Ins.  Co.  4  Mason,  439. 


428  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XVIII. 

of  the  period,  we  should  answer,  she  must  be  seaworthy  in  the 
beginning,  only  in  the  sense  in  which  her  then  place  and  condi- 
tion require  —  as,  if  in  port,  seaworthy  for  that;  if  just  going  to 
sea,  seaworthy  for  that ;  if  at  sea,  seaworthy  for  that.  And  then 
she  must  be  kept  in  a  seaworthy  state,  which  means  fit  to  en- 
counter the  perils  of  any  service  she  is  put  to,  from  time  to  time, 
during  the  whole  period.  And  if  at  any  time  during  that  period, 
she  is  unseaworthy  for  her  then  place  and  work,  through  the 
fault  of  the  insured  or  his  agents,  and  a  loss  occurs  by  reason  of 
such  unseaworthiness,  the  insurers  will  not  be  liable  therefor.^ 

1  The  question  whotlier  there  is  any  implied  warranty  of  seaworthiness,  and  if  any, 
what,  in  a  time-policy,  has  lately  been  the  subject  of  considerable  discussion.  A  com- 
paratively early  American  case  decided  that  there  is  such  an  implied  warranty  when 
the  vessel  sails  from  her  original  port  on  a  time-policy.  Am.  Ins.  Co.  v.  Ogden,  20 
Wend.  287.  The  subject  has  been  most  elaborately  discussed  in  England  in  the 
case  of  Small  v.  Gibson,  3  Eng.  L.  &  Ec^.  299.  "  Insurance  was  made  on  the  ship 
Susan,  'lost  or  not  lost,'  for  twelve  months,  commencing  Sept.  25,  18.'i3.  The  defendant 
pleaded  that  the  vessel  was  unseaworthy  at  the  time  the  policy  was  made,  and  on  Sept. 
25,  when  the  risk  commenced.  The  Court  of  Queen's  Bench  sustained  this  plea;  but  on 
writ  of  error  being  brought,  the  judgment  was  reversed  b}^  the  Court  of  Exchequer,  3 
Eng.  L.  &.  Eq.  299.  A  writ  of  error  was  then  taken  to  the  House  of  Lords,  and  the 
decision  of  tlie  Court  of  Exchequer  affirmed.  24  Eng.  L.  &  Eq.  16.  The  plea,  as 
stated  in  3  Eng.  L.  &  Eq.  299,  would  seem  to  show  that  the  defence  was  taken  that  the 
vessel  was  unseaworthy  when  she  left  home  on  the  voyage.  That  this  is  not  so  is 
shown  by  the  plea,  as  given  in  24  Eng.  L.  &  Eq.  and  by  the  remarks  of  Parke,  B.,  on 
this  point,  p.  42.  Two  questions  then  were  raised  ;  1st,  whether  there  was  an  implied 
warranty  of  seaworthiness  when  the  risk  commenced ;  and  2d,  whether  there  was  any 
when  the  policy  was  made.  The  question  whether  there  was  any  when  the  voyage 
commenced  was,  however,  presented  to  the  judges,  and  by  them  considered,  though 
they  expressly  say  that  it  was  not  necessary  to  decide  it.  In  3  Eng.  L.  &  Eq.  299,  Parke, 
B.,  says  :  ''We  are  far  from  arguing  that  there  is  no  warranty  of  seaworthiness  at  all, 
—  so  to  hold  would  be  to  let  in  the  mischief  which  the  law  provides  against,  Ijy  the 
implied  warranty  in  a  voyage  policy,  —  or  that  there  is  not  the  same  warranty  in  the 
case  of  a  time-policy,  according  to  the  situation  in  which  the  ship  may  be  at  the 
commencement  of  the  term  of  the  insurance.  If,  then,  a  ship  were  insured  in  terms, 
from  a  given  day,  for  the  remainder  of  the  voyage  to  a  foreign  port,  there  may  be  a 
warranty  of  seaworthiness  when  the  voyage  commenced."  He  then  goes  on  to  say 
that  if  the  vessel  had  met  with  damage,  and  could  have  been  repaired,  but  was  not, 
previous  to  the  commencement  of  the  risk,  the  policy  might  not  attach.  And  that  all 
the  court  intended  to  decide  was,  that  there  was  no  warranty  of  seaworthiness  where- 
ever  the  ship  might  be,  or  in  whatever  circumstances  placed,  at  the  commencement  of 
the  term  insured.  In  the  House  of  Lords  the  judges  stood  seven  to  two  on  the  ques- 
tions presented  by  the  plea.  Lord  St.  Leonards  and  Lord  Campbell  concurred  with  the 
majority.  The  other  point  in  regard  to  a  time-policy  on  a  vessel,  beginning  on  her 
departure  from  her  home  port,  was  not  discussed  by  all  the  judges.  Lord  Campbell 
was  in  favor  of  not  having  an  implied  warrant}'  in  any  case.  Lord  St.  Leonards  on  p. 
48,  and  Martin,  B.,  on  p.  20,  22,  thought  the  same  rule  in  such  a  case  would  apply  to  a 
time  as  well  as  to  a  voyage  contract  of  insurance.  In  Jones  v.  Ins.  Co.  2  Wallace,  278, 
Mr.  Justice  Grier  held  that  there  was  no  implied  warranty  in  a  time-policy,  with  three 
exceptions.  Speaking  of  Small  v.  Gibson,  as  decided  in  the  Exchequer,  he  says  :  "  It 
is  true  that  this  case  does  not  decide  that  there  is  no  warranty  of  seaworthiness  at  all 
in  a  timci-policy,  or  that  there  is  not  a  warranty  that  the  ship  is  or  shall  be  seaworthy 
for  that  voyage,  if  the  ship  be  then  about  to  sail  on  a  voyage.  It  may  be  true,  also, 
that  there  is  in  a  time-policy  a  warranty  of  seaworthiness  at  the  commencement  of  the 
risk,  so  far  as  lay  in  the  power  of  the  assured  to  effect  it,  so  that  if  the  ship  met  witii 
damage  before,  and  could  have  been  repaired  with  the  exercise  of  reasonable  care  and 
pains,  and  was  not,  the  policy  would  not  attach.    But  in  all  such  cases,  the  plea  must 


en.  XVIII.]  OF   MARINE  INSURANCE.  429 

There  are  other  implied  warranties.  One  of  these  is,  that  the 
insured  shall  deal  honestly  with  the  insurer,  and  make  a  distinct 
and  true  statement  of  all  material  circumstances  affecting  the 
risk.  Another  is,  that  the  ship  shall  pursue  thb  usual  course  of 
her  voyage,  without  deviation  from  it,  or  the  unnecessary  en- 
counter of  unusual  risks.  But  these  will  be  considered  in  subse- 
quent sections. 

SECTION  IX. 

OF   KEPRESEXTATION   AND   CONCEALMENT. 

If  there  be  an  affirmation  or  denial  of  any  fact,  or  an  allegation 
which  would  lead  the  mind  to  that  conclusion,  —  whether  made 
orally  or  in  writing,  or  by  exhibition  of  any  written  or  printed 
paper,  or  by  a  mere  inference  from  the  words  of  the  policy,  before 
the  making  of  the  policy,  or  at  the  making,  and  the  same  be  false, 
and  tend  to  procure  for  hiuj  who  makes  it,  the  bargain,  or  some 
advantage  in  the  bargain,  it  is  a  misrepresentation}     And  it  is 

state  such  facts  and  ch-cumstanccs  as  sliall  show  cither  that  at  the  time  the  insurance 
commenced,  the  ship  was  in  her  original  port  of  departure,  and  commenced  lier  voyage 
in  an  unseaworthy  condition,  and  so  continued  till  the  time  of  her  loss,  or  tliat,  having 
come  into  a  distant  port  in  a  damaged  condition,  before  or  after  the  commencement  of 
the  risk,  wliere  slie  might  and  ought  to  have  been  repaired,  and  the  owner  or  his  agents 
neglected  to  make  such  rejiairs,  and  the  vessel  was  lost  by  a  cause  wliich  may  be  attrib- 
uted to  tlie  insufficiency  of  the  ship."  In  the  case  of  Capen  v.  Washington  Ins.  Co.  de- 
cided by  the  Supreme  Court  of  Massachusetts,  November  term,  1853,  (not  yet  reported,) 
the  policy  was  subscribed  April  30 ;  the  risk  commenced  ]\Iarch  30,  at  noon,  to  con- 
tinue one  year,  on  the  ship  Eique,  to  and  at  all  ports  and  places  to  which  she  might  pro- 
ceed in  that  time.  The  vessel  was  at  sea  in  March,  and  returned  to  Boston  the  following 
September,  and  was  destroyed  by  fire  in  a  subsequent  voyage.  At  the  trial  in  the  court 
below,  Shaw,  C.  J.,  ruled  that  tliere  Avas  no  implied  warranty,  in  the  ordinary  acceptation 
of  that  term,  cither  at  the  time  that  the  policy  was  underwritten,  or  on  the  day  the  risk 
AVfls  to  commence,  but  that  tlie  only  implied  warranty  in  this  respect  was  that  the  vessel 
was  to  be  in  existence  as  a  vessel  at  the  time  fixed  for  the  commencement  of  the  risk  ; 
capable,  if  then  in  port,  of  being  made  useful,  with  proper  repairs  and  fittings,  for  naviga- 
tion, and  was  seaworthy  when  she  first  sailed  from  port ;  or  if  at  sea  when  the  risk 
commenced,  that  she  had  sailed  in  a  seaworthy  condition,  and  was  safe  so  as  to  be  a 
proper  subject  of  insurance  at  the  time  the  risk  attached.  But  if  the  vessel  was  then 
lost,  had  become  a  wreck,  or  ceased  to  exist  as  a  vessel,  or  was,  if  at  sea,  in  such  a  con- 
dition that  slie  could  not  on  her  arrival  in  port,  be  made  available,  by  seasonable  and 
suitable  repairs,  for  navigation,  then  there  was  no  subject  for  the  policy  to  take  effect 
upon.  As  exceptions  were  taken  to  these  rulings,  and  the  rulings  sustained  in  the 
Supreme  Court,  Shaio,  C.  J.,  giving  the  opinion,  it  is  presumed  that  they  are  substan- 
tially in  accordance  with  the  law  as  finally  laid  down.  In  Jenkins  v.  Heycock,  8  Moore, 
P.  C.  Cases,  351,  decided  in  the  Privy  Council  in  1853,  the  vessel  was  seaworthy  at  the 
commencement  of  tlie  risk,  but  became  imseaworthy  afterwards.  The  court  held  that 
this  did  not  avoid  the  policy.  They  also  said  :  "  If  it  were  necessary  for  the  decision  of 
this  case,  we  should  be  inclined  to  go  to  the  full  extent  of  what  Lord  Campbell  saj's  in 
the  House  of  Lords." 

1  Livingston  v.  jNIaryland  Ins.  Co.  7  Cranch,  506;  N.  Y.  Firemen  Ins.  Co.  v.  Walden, 
12  Johns.  517  ;  Pawson  v.  Watson,  Cowp.  785.     See  also  cases  infra. 


430  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

the  same  thing,  whether  it  refers  to  a  subject  concerning  which 
some  representations  were  necessary  or  otherwise.^ 

Concealment  is  the  suppression  of  a  fact  not  known  to  the 
other  party,  referring  to  the  pending  bargain,  and  material  there- 
to; and  the  effect  of  it  is  not  removed  by  a  result  which  shows 
that  the  circumstances  to  which  it  refers,  do  not  enter  into  the 
risk.2 

A  misrepresentation  or  a  concealment  discharges  the  insurers. 
To  have  this  efTect  it  must  continue  until  the  risk  begins,  and 
then  be  material.^ 

It  is  no  defence  that  it  arose  from  inadvertence  or  misappre- 
hension, because  the  legal  obligation  of  a  full  and  true  state- 
ment is  absolute;*  nor  that  the  insurers  were  not  influenced  by 
it,  if  it  were  wilfully  made  with  intention  to  deceive.^ 

If  it  be  in  its  nature  temporary  and  begins  after  the  risk  begins, 
and  ends  before  a  loss  happens,  the  insurers  are  not  discharged.^ 
And  if  it  relate  to  an  entirely  several  subject-matter  of  insurance, 

1  Sibbald  v.  Hill,  2  Dow,  P.  C.  263.  In  this  case  the  party  wishing  to  obtain  insur- 
ance stated  to  tlic  underwriter  that  eight  guineas  was  the  liighest  lie  had  paid  for  the 
same  risk  in  London,  whereas  he  had  paid  twenty-five.  The  House  of  Lords  held  that 
the  contract  was  void,  on  the  ground  "  that  every  misrepresentation  is  fatal  to  a 
contract  which  is  made  under  such  circumstances,  and  in  such  a  way  as  to  gain  the 
confidence  of  the  other  party,  and  induce  him  to  act  when  otherwise  he  would  not." 
See,  also,  De  Costa  v.  Scandret,  2  P.  Wms.  170;  Hoyt  v.  Gilman,  8  Mass.  336. 

-  Hoyt  V.  Gilman,  8  Mass.  336;  Seaman  v.  Fonercau,  2  Str.  1183.  In  Lynch  v. 
Hamilton,  3  Taunt.  37,  Mansfield,  C.  J.,  says :  "  A  person  insuring  is  bound  to  com- 
municate every  intelligence  he  has  that  may  affect  the  mind  of  the  underwriter  in 
either  of  these  two  ways,  —  first,  as  to  the  pohit  whether  he  will  insure  at  all;  and  sec- 
ondly, as  to  the  point  at  what  premium  he  will  insure."  In  Lynch  v.  Dunsford,  14  East, 
494,  intelligence  was  not  communicated,  and  the  report  of  the  supposed  risk  afterwards 
turned  out  to  be  untrue.  It  was  held  that  tlie  policy  was  nevertheless  avoided.  If  the 
risk  which  the  underwriter  has  to  run  be  covered  by  a  warranty,  then  as  to  that  a  re- 
presentation is  not  necessary.  Shoolbred  v.  Nutt,  Park  on  Ins.  493 ;  Haywood  y. 
Rodgers,  4  East,  590.  See,  also,  Ruggles  v.  Gen.  Int.  Ins.  Co.  4  Mason,  74,  and  cases 
cited,  p.  80 ;  Carter  v.  Boehm,  3  Burrow,  1905 ;  Rickards  v.  Murdock,  10  B.  &  C.  527; 
Beckwitli  v.  Sydebotham,  1  Camp.  116. 

3  2  Duer  on  Ins.  702. 

*  In  Burritt  v.  Saratoga  Co.  M.  F.  Ins.  Co.  5  Hill,  188,  Bronson,  J.,  says:  "In 
marine  insurance  the  misrepresentation  or  concealment  by  the  assured  of  a  fact  ma- 
terial to  the  risk,  will  avoid  the  policy  although  no  fraud  was  intended.  See  also,  Curry 
V.  Commonwealth  Ins.  Co.  10  Pick.  535  ;  N.  Y.  Bowery  Ins.  Co.  v.  N.  Y.  Fire  Ins. 
Co.  17  Wend.  359  ;  Bridges  v.  Hunter,  1  M.  &  S.  15;  Fitzherbert  v.  Mather,  1  Term, 
12  ;  Bufe  v.  Turner,  6  Taunt.  338.  See  also  Dennison  v.  Thomaston  Mut.  Ins.  Co. 
20  Maine,  125. 

5  1  Phillips  on  Ins.  §  541  ;  Arnould  on  Ins.  500. 

6  This  question  has  not  yet  come  before  the  courts.  In  2  Duer  on  Ins.  p.  698,  the 
author  says  :  "  That  when  the  breach  of  a  representation  is  transitory  in  its  nature,  and 
the  immediate  peril  is  surmounted,  it  would  be  held  by  the  tribunals  of  the  continent 
not  to  aifect  the  validity  of  the  contract,  I  have,  indeed,  no  doubt ;  but  that  such  would 
be  the  rule,  when  the  breacli,  without  producing  a  loss,  changes  essentially  the  subse- 
quent risks,  I  am  not  prepared  to  affirm."  See  also,  cases  on  Warranties,  ante,  p.  426, 
n.  2. 


en.  XVIII.]  OF   MARINE   INSURANCE.  431 

as  the  goods  only,  and  has  no  eficct  upon  the  risk  as  to  the  rest,  it 
discharges  the  insurers  only  as  to  that  part.'  Ignorance  is  never 
an  excuse,  if  it  be  wilful  and  intentional.  If  one  says  only,  "  he 
believes  so  and  so,"  the  fact  of  his  belief  in  good  faith  is  sufficient 
for  him.  But  if  he  says  that  is  true,  of  which  he  does  not  know 
whether  it  be  true  or  false,  and  it  is  actually  false,  it  is  the  same 
misrepresentation  as  if  he  knew  it  to  be  false.  If  a  statement  re- 
late to  the  future,  a  future  compliance  or  fulfilment  is  necessary .^ 

Any  statement  in  reply  to  a  distinct  inquiry,  will  be  deemed 
material;  because  the  question  implies  that  it  is.^  On  the  other 
hand,  the  insured  is  not  bound  to  communicate  any  mere  expec- 
tation or  hope  or  fear  ;  but  only  all  the  facts  material  to  the  risk.^ 

If  the  concealment  or  misrepresentation  by  the  insured  arose 
from  the  master's  concealment  from  his  owner,  it  seems  to  be  the 
law  in  this  country,  that  the  insurers  are  not  discharged.^  If  the 
insured  state  honestly  that  he  is  informed  so  and  so,  giving  his 
authorities,  this  is  no  misrepresentation,  although  he  is  misin- 
formed.*' But  generally,  the  insured  who  procures  insurance 
through  an  agent,  is  liable  for  that  agent's  concealment  or  misrep- 
resentation, although  unknown  and  unauthorized  by  him.'^ 

If  one  who  is  insured,  proposes  to  another  insurer  a  second 

1  1  Phillips  on  Ins.  §  680. 

"  Callaghan  v.  Atlantic  Ins.  Co.  1  Edwards,  Ch.  64.  In  this  case,  in  the  application 
for  insurance,  the  vessel  was  described  to  be  in  a  certain  port.  The  court  held  that  if 
this  was  not  a  warranty,  still  it  was  a  material  representation,  and  if  false  would  avoid 
the  policy.  But  that  if  it  had  been  stated  that  she  was  there  according  to  last  advices, 
or  was  there  on  such  a  day  and  intended  remaining  till  such  a  time,  it  would  liave  been 
different.  See  also  Hubbard  v.  Glover,  3  Camp.  313;  Bowden  u.  Vaughan,  10  East,  415; 
Kemble  v.  Bowne,  1  Caines,  75;  Maryland  Ins.  Co.  v.  Bathurst,  5  Gill  &  Johns.  159  ; 
Pawson  I'.  Watson,  Cowp.  785;  Whitney  u.  Haven,  13  Mass.  172;  Bryant  v.  Ocean 
Ins.  Co.  22  Pick.  200 ;  Kice  v.  N.  Eng.  Mar.  Ins.  Co.  4  Pick.  439  ;  Christie  v.  Secretan, 
8  Term,  192 ;  Brine  v.  Eeatherstone,  4  Taunt.  869  ;  Astor  v.  Union  Ins.  Co.  7  Cowen, 
202. 

»  Burritt  v." Saratoga  Co.  Mut.  E.  Ins.  Co.  5  Hill,  188;  1  Phillips  on  Ins.  §  542; 
2  Duer  on  Ins.  688 ;  Dennison  v.  Thomaston  Mut.  E.  Ins.  Co.  20  Maine,  125. 

*  Bell  V.  Bell,  2  Camp.  475.  But  if  the  beliefs  or  expectations  are  of  such  a  nature 
that,  if  communicated,  they  would  influence  the  mind  of  the  insurer  in  determining 
whether  to  take  the  risk  or  not,  and  if  he  would  take  it,  at  what  premium,  they  should 
be  made  known.  Willes  v.  Glover,  1  New  Hep.  14;  Marshall  v.  Union  Ins.  Co. 
2  Wash.  C.  C.  357. 

^  Buggies  V.  Gen.  Int.  Ins.  Co.  4  Mason,  74  ;  Gen.  Int.  Ins.  Co.  v.  Buggies,  12 
Wheat.  408.  In  England,  a  different  rule  appears  to  be  laid  down.  Eitzherbert  v. 
Mather,  1  Term,  12;  Gladstone  v.  King,  1  M.  &  S.  35.  These  cases,  however,  were 
cited  by  counsel  in  Gen.  Int.  Ins.  Co.  v.  Buggies,  and  were  commented  on  by  Mr. 
Justice  Thompson,  in  delivering  the  opinion  of  the  court.  They  were  not  considered 
by  him  to  warrant  the  conclusions  contended  for. 

6  Tidmarsh  v.  Washington  Ins.  Co.  4  Mason,  439,  443.  Per  StorT/,  J.  See  also 
1  Phillips  on  Ins.  §  563. 

■*  See  cases  cited  ante,  note  5 ;  also  Stewart  v.  Dunlop,  4  Brown,  Pari.  Cas.  483. 


432 


ELEMENTS   OF  MERCANTILE   LAW. 


[cn.  XVIII. 


insurance  on  the  same  policy,  on  the  same  terms  expressly  or  im- 
pliedly, and  the  first  is  founded  on  concealment  or  misrepresenta- 
tion, this  taint  extends  to  the  second.' 

A  premium  much  lower  than  would  be  proper  for  a  certain 
risk  if  certain  facts  were  disclosed,  may  be  evidence  tending  to 
show  that  they  were  not  disclosed.^ 


SECTION   X. 


WnAT   THIXGS   SHOULD   BE   COMMUNICATED. 

Not  only  ascertained  facts  should  be  stated  by  the  insured,  but 
intelligence,  and  mere  rumors,  if  of  importance  to  the  risk  ;  and 
it  has  been  held  that  intelligence  knowft  to  his  clerks  would  be 
generally  presumed  to  be  known  to  him ;  ^  and  it  is  no  defence 
that  the  things  have  been  found  to  be  false.*  It  has  been  held 
that  an  agent  was  bound  to  state  that  his  directions  were  sent 
him  by  express ;  because  this  indicated  an  emergency.^  If  the 
voyage  proposed  would  violate  a  foreign  law  not  generally  known, 
this  should  be  stated.^ 

It  is  impossible  to  give  any  other  criterion  to  determine  what 
should  be  communicated,  than  the  rule  that  every  thing  should 
be  stated  which  might  reasonably  be  considered  in  estimating 
the  risk.  And  it  is  obvious  that  the  season,  or  political  events, 
or  the  character  of  the  voyage,  may  make  that  material  in  a  par- 

1  New  York  Bowery  F.  Ins.  Co.  v.  New  York  Ins.  Co.  1 7  Wcncl.  359 ;  Pawson  v.  Wat- 
son, Cowpcr,  785 ;  Barber  v.  Flctclicr,  Doug.  305 ;  Feise  v.  Parkinson,  4  Taunt.  640. 
But  this  rule  applies  only  to  representations  favorable  to  tlic  underwriter  anJ  not  to  those 
which  would,  if  comnumicated,  increase  their  liability,  llobertson  v.  Marjoribanks,  2  Star- 
kie,  573.  In  Bell  v.  Carstairs,  2  Camp.  543,  Lord  Ellenhorough  says  :  "  It  is  ditticult  to  see 
on  what  principle  of  law  a  representation  to  the  iirst  underwriter  is  considered  as  made 
to  all  those  who  afterwards  underwrite  the  policy.  Tliat  rule  being  estabhshed,  I  will 
abide  by  it ;  but  I  will,  by  no  means,  allow  it  to  be  extended.  You  must  show  the 
representations  to  have  been  made  to  the  first  undenvriter  on  the  policy,  or  to  the  de- 
fendant himself."  In  Marsden  v.  Rcid,  3  East,  572,  it  was  intimated  by  the  court  that 
if  it  had  appeared  that  a  material  fact  had  been  represented  to  the  first  underwriter  to 
induce  him  to  subscribe  the  policy,  it  should  be  taken  to  have  been  made  to  all  the  rest 
•without  the  necessity  of  repeating  it  to  each. 

2  Bridges  v.  Hunter,  1  M.  &  S.  J9 ;  Freeland  v.  Glover,  7  East,  457  ;  NicoU  v.  Am. 
Ins.  Co.  3  Wood.  &  Minot,  529,  535. 

3  Ilimely  v.  Stewart,  1  Brevard,  209;  Byrnes  v.  Alexander,  1  id.  213. 
*  See  ante,  p.  430,  n.  2. 

5  Court  V.  Martineau,  3  Doug.  161.  In  this  case  it  was  held  that  such  a  fact  need 
not  be  disclosed  where  the  dates  plainly  show  that  the  message  must  have  so  come. 
And  see  1  Phillips,  §  581. 

6  Hoyt  V.  Gilman,  8  Mass.  336.    See  also  ante,  p.  409,  n.  4. 


CII.  XVIII.]  OF   MARINE   INSURANCE.  433 

ticular  case,  which  is  not  so  generally ;  as  the  national  character 
of  tlie  ship  or  goods  ;i  whether  contraband  or  not;^  the  interest 
of  the  insured  i'^  the  time  of  sailing;"^  and  the  last  news  as  to 
weather  and  the  like,  from  that  part  of  the  ocean  in  which  the 
ship  to  be  insured  is  supposed  to  be.^  And  so  every  other  thing 
of  any  kind  which  the  insurer  might  reasonably  wish  to  take 
into  consideration  in  estimating  the  value  of  the  risk  which  he 
is  invited  to  assume.^ 

The  question,  however,  being  one  of  concealment  as  it  affects 
the  estimation  of  the  risk,  it  is  obvious  that  the  insured  need  not 
state  to  the  insurer  things  which  he  already  knows ;  and  by  the 
same  reason  he  is  not  bound  to  state  things  which  the  insurer 
ought  to  know,  and  might  be  supposed  to  know.  These  are,  in 
general,  all  those  things  which  the  insured  learns  by  means  which 
are  quite  as  open  to  the  insurer  as  they  are  to  him ; "  as  general 
facts  widely  published,  and  known  by  others  long  enough  to 
justify  the  inference  that  all  interested  in  such  matters  are  ac- 
quainted with  them.s  So  things  resting  upon  a  general  rumor, 
which  is  known  to  all  alike.^  So  facts  of  science ;  as  the  posi- 
tion of  a  port ;  the  peculiar  dangers  or  liabilities  of  any  well 
known  navigation  ;  the  prevalence  of  winds,  currents,  or  weather 
of  any  particular  description  at  a  certain  place  or  in  a  certain 
season.^^  "Whether  the  suppression  of  such  a  thing  be  a  faulty 
concealment  on  the  part  of  the  insured,  or  only  an  innocent 
silence,  must  depend  upon  the  standard  above  stated.  If  it  be 
known  to  him  in  such  a  way,  that  he  ought  as  a  reasonable  man 
to  doubt  whether  the  insured  knows  it,  then  he  ought  as  an 

>  Campbell  v.  Innes,  4  B.  &  Aid.  423. 

-  Seton  V.  Low,  1  Johns.  Cas.  1.     See  ante,  p.  417,  note  2. 

3  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429  ;  Lawrence  v.  Aberdein,  5  B.  &  Aid.  107 ; 
Coit  V.  Smith,  3  Johns.  Cas.  16. 

*  Per  Story,  J.,  in  M'Lanahan  v.  The  Universal  Ins.  Co.  1  Peters,  170,  189  ;  M' An- 
drew V.  Bell,  1  Esp.  373  ;  Webster  v.  Foster,  1  Esp.  407;  Johnson  v.  Phoenix  Ins.  Co. 
1  Wash.  C.  C  378  ;  Livingston  y.  Delafield,  3  Caines,  49.  See  also,  Kice  v.  N.  Eng. 
M.  Ins.  Co.  4  Pick.  439  ;  Fiske  v.  New  Eng.  Mar.  Ins.  Co.  15  Pick.  310  ;  Littledale  v. 
Dixon,  1  Bos.  &  Pul.  N.  R.  151. 

6  Moses  V.  Delaware  Ins.  Co.  1  Wash.  C.  C.  385;  Fiske  v.  N.  Eng.  M.  Ins.  Co.  15 
Pick.  317  ;  Ely  v.  Hallett,  2  Caines,  57. 

**  See  cases  cited  supra,  generally. 

"<  Carter  v.  Boehm,  3  Burrow,  1910.  "But  either  party  may  be  innocently  silent,  as 
to  grounds  open  to  both,  to  exercise  their  judgment  upon."    Per  Lord  Mansjield. 

**  Friere  v.  Woodhouse,  1  Holt,  N.  P.  572;  Elton  v.  Larkins,  8  Bing.  198;  Green  v. 
Merchants'  Ins.  Co.  10  Pick.  402. 

9  Alsop  V.  Commercial  Ins.  Co.  1  Sumner,  451. 

1'  De  Longuemere  v.  N.  Y.  Fire  Ins.  Co.  10  Johns.  120;  Stewart  v.  Bell,  5  B.  &  Aid. 
238  ;  Kingstone  v.  Knibbs,  1  Camp.  508,  n.;  Bell  v.  Mar.  Ins.  Co.  8  Serg.&  Rawle,  98. 

37 


434 


ELEMENTS    OF  MERCANTILE   LAW. 


[cn.  XVIIL 


honest  man  to  put  an  end  to  the  doubt  by  stating  it ;  otherwise 
he  may  be  silent.^  And  so  he  may  be  about  any  thing  expressly 
provided  for  in  the  policy,  unless. he  be  expressly  interrogated  on] 
the  subject.^ 

If  either  party  says  to  the  other  so  much  as  should  put  the 
other  upon  inquiry,  in  reference  to  a  matter  about  which  inquiry  | 
is  easy  and  would  lead  to  information,  and  the  other  party  makes 
no  inquiry,  his  ignorance  is  his  own  fault,  and  he  must  bear  the 
consequences  of  it.*^ 

An  intention,  which  if  carried  into  effect  would  discharge  thej 
insurers,  as,  for  example,  an  intention  to  deviate,  need  not  be. 
stated,  unless  the  intention  itself  can  be  shown  to  affect  the  risk.*] 
So  a  part  damage  to  the  property  need  not  be  stated,  unless  it 
affects  its  present  probability  of  safety.^ 

A  false  statement  that  other  insurers  have  taken  the  risk  on] 
such  or  such  terms,  is  a  misrepresentation,  but  not  a  false  state- 
ment of  an  opinion  that  they  would  take  it  on  such  terms,^  for  of] 
this  the  insurers  can  judge  for  themselves. 

Every  statement  or  representation  will  be  construed  rationally, 
and  so  as  to  include  all  just  and  reasonable  inferences.  A  sub- 
stantial compliance  with  it  will  be  sufficient;  and  a  literal  com- 
pliance which  is  not  a  substantial  one,  will  not  be  sufficient.'' 


'  Dickenson  v.  Com.  Ins.  Co.  Anthon's  N.  P.  126. 

2  Walden  v.  N.  Y.  Firemen  Ins.  Co.  12  Johns.  128;  Farmers'  Ins.  Co.  v.  Snyder, 
16  Wend.  481  ;  Lexington  Ins.  Co.  u.  Paver,  16  Ohio,a^;  Coulon  v.  Bowne,  1  Gaines, 
288.  ^ 

3  Court  V.  Martineau,  3  Doug.  161 ;  Fort  v.  Lee,  3  Taunt.  381 ;  Alsop  v.  Commercial 
Ins.  Co.  1  Sumner,  451 ;  Carr  v.  Hilton,  1  Curtis,  390. 

*  Houston  V.  N.  Eng.  Ins.  Co.  5  Pick.  89 ;  Firemen  Ins.  Co.  v.  Lawrence,  14  Johns. 
46.  In  this  case,  Kent,  Chancellor,  says  :  "An  intention  to  deviate  is  nothing,  because 
the  intention  may  be  given  up  before  the  vessel  arrives  at  the  dividing  point ;  but  if' 
the  captain  be  under  positive  instructions  to  take  one  course,  and  not  the  other,  he  has 
no  discretion  to  act,  and  no  liberty  to  repent.  This  cause  alone  is  sufficient  to  dis- 
charge the  underwriter."  For  this  position,  Middlewood  v.  Blake,  7  Term,  162,  is  cited 
by  the  learned  Chancellor.  In  this  case,  the  insurance  was  on  a  vessel  on  a  voyage 
from  London  to  Jamaica.  The  captain  had  instructions  to  stop  at  Cape  Nicola  Mole, 
in  St.  Domingo.  She  was  captured  after  having  passed  the  dividing  point  of  three 
different  tracks  to  Jamaica,  but  before  she  had  reached  the  sub-dividing  point  of  the 
courses  to  the  Mole  and  to  Jamaica.  It  was  held  that  the  underwriters  were  dis- 
charged. Some  of  the  judges  put  it  on  the  ground  that  the  captain  had  no  discretion 
at  the  first  dividing  point,  and  consequently  the  deviation  took  place  then.  See  also 
the  opinion  of  Lawrence,  J.,  iu  this  case  ;  The  Marine  Ins.  Co.  v.  Tucker,  3  Cranch, 
357. 

5  Boyd  r.  Dubois,  3  Camp.  133  ;  Gladstone  v.  King,  1  Maule  &  Sel.  35. 

^  Sibbald  V.  Hill,  2  Dow,  P.  C.  263  ;  Clason  v.  Smith,  3  Wash.  C.  C.  156. 

'  Suckley  v.  Delafield,  2  Gaines,  222  ;  Alsop  v.  Coit,  12  Mass.  40;  Murray  v.  Alsop, 
3  Johns.  Cas.  47  ;  Vandenhcuvel  v.  United  Ins.  Co.  2  Johns.  Cas.  173,  n. :  Pawson  v. 
Watson,  Cowp.  785. 


CH.  XVIir.]  .     OF   MARINE   INSURANCE.  435 


SECTION   XL 
OF    THE    PKEMIUM. 

This  is  undoubtedly  due  when  ,the  contract  of  insurance  is 
completed ;  but  in  practise  in  this  country,  the  premium  in  ma- 
rine insurance  is  usually  paid  by  a  premium  note  on  time,  which 
is  given  at  or  soon  after  the  delivery  of  the  policy.  If  the  policy 
acknowledge  the  receipt  of  the  premium,  if  it  be  not  paid,  this 
receipt  would  be  no  bar  to  an  action  for  it.^ 

The  premium  is  not  due  unless  the  risk  is  incurred  ;2  whether 
this  be  caused  by  the  non-sailing  of  the  ship  ;  or  by  tke  insured 
not  having  goods  on  board  j^  or  not  so  much  cargo  as  he  is 
insured  for ;  or  by  any  error  or  falsity  in  the  description  which 
prevents  the  policy  from  attaching.'^ 

If  the  premium  be  not  earned,  or  not  wholly  earned,  it  must 
be  returned  in  whole  or  in  part  by  the  insurers  if  it  have  been 
paid  ;  and  not  charged  in  account  with  the  insured,  if  it  be  un- 
paid.^ 

The  premium  may  be  partially  earned  ;  and  then  there  must 
be  a  part  return  only.  As  if  the  voyage  consist  of  several  passa- 
ges, or  of  "  out  and  home"  passages,  and  these  are  not  connected 
by  the  policy  as  one  entire  risk  ;  *^  or  if  the  insured  has  some  goods 
at  risk,  but  not  all  which  he  intended  to  insure.'' 

'  In  England  the  law  is,  that  as  against  the  assured  the  underwriter  cannot  set  up 
that  the  broker  has  not  paid  the  premium  of  which  he  has  acknowledged  the  receipt. 
Anderson  v.  Thornton,  20  Eng.  L.  &  Eq.  339.  But  between  the  underwriter  and  the 
broker  it  is  not  conclusive.  See  Foy  v.  Bell,  3  Taunt.  493.  In  Ins.  Co.  of  Penn.  v. 
Smith,  3  Whart.  .520,  it  was  held  that  a  policy  of  insurance  did  not  differ  from  any 
other  contract  in  this  respect,  and  that  a  receipt  might  therefore  be  inquired  into.  For 
the  law  in  regard  to  a  receipt  being  conclusive  or  not,  see  1   Greenl.  Evid.  p.  354. 

-  Tyrie  r.  Fletcher,  Cowp.  6G6.  In  this  case,  Lord  Mansjield  says :  "-Where  the  risk  has 
not  been  run,  whether  its  not  having  been  run  was  owing  to  the  fault,  pleasure,  or  will  of 
tlie  insured,  or  to  any  other  cause,  the  premium  shall  be  returned."  See  also,  Emerigon 
on  Ins.  (Meredith's  cd.)  p.  52. 

^  Waddington  v.  United  Ins.  Co.  17  Johns.  23. 

*  Foster  v.  U.  S.  Ins.  Co.  11  Pick.  85  ;  Amery  v.  Rodgers,  1  Esp.  207  ;  Holmes  v. 
United  Ins.  Co.  2  Johns.  Cas.  329. 

s  Taylor  v.  Sumner,  4  Mass.  56  ;  M'CuUoch  i'.  Roy,  Exeh.  Ass.  Co.  3  Camp.  406. 

6  Waters  v.  Allen,  5  Hill,  421 ;  Lovering  v.  Mercantile  Mar.  Ins.  Co.  12  Pick.  348; 
Stevenson  v.  Snow,  3  Burr.  1237.  'In  Homer  v.  Dorr,  10  Mass.  26,  there  was  an  insur- 
ance on  a  cargo  from  Boston  to  Archangel  and  back.  The  outward  cargo  was  safely 
landed,  but  no  homeward  cargo  was  shipped.  A  usage  was  proved  in  such  a  case  to 
return  the  premium  for  the  homeward  voyage.  But  the  court  decided  against  it.  The 
premium  was  given  for  the  whole  voyage. 

^  See  ante.  n.  4. 


436  ELEMENTS    OF   MERCANTILE  LAW.  [CH.  XVIIL 

It  is  however  an  invariable  rule,  that  if  the  whole  risk  attaches 
at  ail,  that  is,  if  there  be  a  time,  however  short,  during  which  the 
insurers  might  in  case  of  loss  from  a  sea-peril,  be  called  on  for  the 
whole  amount  they  insure,  there  is  to  be  no  return  of  premium.' 

If  there  be  simultaneous  policies,  and  taken  together  they  cover 
more  than  the  whole  amount  at  risk,  there  must  be  a  pro  rata 
return  of  premium.  If  they  are  not  simultaneous,  and  the  earlier 
policies  attached  for  their  whole  amount  before  the  later  ones 
were  made,  the  earlier  ones  earn  their  whole  premium ;  and  the 
later  policies  must  return  theirs,  in  whole  or  in  part.^ 

If  the  policy  be  effected  by  an  agent  who  is  responsible  for  the 
premium,  and  the  insurance  is  neither  authorized  nor  confirmed 
by  the  principal,  there  is  no  return  of  premium  for  this  cause,  if 
the  principal  might  have  adopted  the  insurance  and  made  it  ob- 
ligatory on  the  insurers,  at  a  time  when  the  property  insured  was 
at  risk.3 

If  the  note  be  signed  by  an  agent,  the  insurers  may  look  to  a 
principal  actually  insured  by  it,  whether  know^n  or  unknown  to 
them  at  the  time.  Unless  it  can  be  inferred  from  the  facts  or 
otherwise  shown  that  with  a  knowledge  of  the  principal,  the  in- 
surers accepted  the  note  of  the  agent  or  broker  as  that  upon 
which  they  should  exclusively  rely.* 

'  Tyrie  v.  Fletcher,  Cowper,  666.  lu  this  case  the  insurance  was  on  a  vessel  war- 
ranted free  from  capture,  for  twelve  months,  at  9/.  per  cent.  The  vessel  was  taken  by  a 
privateer  about  two  taonths  after  she  sailed.  It  was  held  that  no  part  of  the  premium 
was  to  be  returned.  See  also  Taylor  v.  Lowell,  3  jMass.  331  ;  Hendricks  v.  Com.  lus.- 
Co.  8  Johns.  1 ;  Loraine  v.  Tomilson,  Doug-.  5S5  ;  Moses  v.  Pratt,  4  Camp.  297  ;  Tail 
V.  Levi,  14  East,  481. 

."  Fisk  V.  Masterman,  8  Mee.  &  Wels.  165.  Insurance  was  effected  on  the  12t]i  of 
April,  on  a  cargo  of  cotton  at  sea,  by  five  policies,  and  on  the  13th,  a  further  insurance 
was  made  by  six  different  policies.  Taken  togetlier  they  exceeded  in  value  the  amount 
at  risk,  but  the  amount  insured  by  the  five  did  not.  It  was  held  that  the  assured  were 
entitled  to  a  return  of  premium  on  the  amount  of  tlie  over  insurance  to  which  the  un- 
derwriters of  the  13th  were  to  contribute  ratably,  the  amount  of  over  insurance  to  be 
ascertained  by  taking  into  account  all  the  policies,  but  that  no  return  of  premium  was 
10  be  made  in  respect  of  the  policies  effected  on  tlie  12th.  See  cases  cited  p.  420,  n.  4. 
The  doctrine  of  Fisk  v.  JNIastcrman,  is  founded  on  the  principle  that  those  underwri- 
ters, who  have,  at  any  time,  been  liable  to  pay  the  whole  amount  of  their  subscriptions, 
are  entitled  to  retain  the  whole  amount  of  "the  premium.  2  Arnould  on  Ins.  1229;  2 
Phillips  on  Ins.  §  1838. 

^  Hagedorn  v.  Oliverson,  2  M.  &  S.  48.5 ;  Eouth  v.  Thompson,  13  East,  274.  In  this 
case,  Bayleij,  J.,  says :  "  Could  the  agent  who  procured  the  insurance,  have  recovered 
back  the  premiums  paid  by  him,  if  the  crown  had  not  adopted  the  insurance  ?  I  should 
think  not,  because  of  the  choice  which  tlie  crown  had  to  adopt  it,  in  respect  to  which 
the  insurer  would  have  incurred  the  risks."  See  also  Finney  v.  Fairhaven  Ins.  Co.  5 
Met.  192,  197,  where  the  doctrine  of  the  two  cases  above  cited  is  adopted. 

■*  Paterson  i-.  Gandassequi,   15  East,   62;  Addison  v.  Gandassequi,  4  Taunt.  538; 
■  Thomson  v.  Davenport,  9  B.  &  C.  78.      See  2  Smith's  Leading  Cases,  222.  note ;  Ins. 
Co.  of  Penn.  r.  Smith,  3  Whart.  520  ;  Patapsco  Ins.  Co.  r.  Smith,  6  li.  &  J.  166. 


CH.  XVin.]  OF  MARINE  INSURANCE.  437 

There  is  no  return  of  premium  for  avoidance  of  the  contract 
by  its  illegality ;  if  both  parties  knew  this  and  were  equally  in 
fault.i 

In  this  country,  insurers  usually  retain  one  half  of  one  per 
cent,  of  a  returnable  policy.  And  our  policies  contain  a  clause 
permitting  the  insurers  to  set  off  the  premium  Sue  against  a  loss, 
whether  the  note  be  signed  by  the  insured  or  another.^ 


SECTION  XII. 

OF   THE   DESCRIPTION   OF   THE   PROPERTY   INSURED. 

The  description  must  be  such  as  will  distinctly  identify  the 
property  insured,  as  by  quantity,  marks,  and  numbers,  or  a  refer- 
ence to  the  fact  of  shipment,^  or  the  time  of  shipment,*  or  the 
voyage,  or  the  consignee;^  or  in  some  similar  and  satisfactory 
way ;  and  no  mere  mistake  in  a  name,  or  elsewhere,  vitiates  the 
description  if  it  leaves  it  sufficiently  certain.^  If  different  ship- 
ments come  within  the  policy,  the  insured  may  attach  it  to  either 
by  his  declaration,  which  may  be  done  after  the  loss,  provided 

1  If  an  illegal  insurance  is  effected  which  is  not  known  to  be  such  at  the  time,  as 
where  the  insured  was  the  subject  of  a  foreign  country,  with  which  war  had  been 
declared,  though  the  parties  were  iirnorant  of  it  at  the  time,  the  premium  may  be 
recovered  back.  Com  v.  Bruce,  12  East,  225.  But  where  the  fact  was  known,  the 
maxim  in  pari  delicto  potior  est  conditio  possidentis  will  apply.  See  Lowry  v.  Bourdieu, 
Doug.  468  ;  Andre  v.  Fletcher,  3  Term,  266  ;  Vandyck  v.  Hewitt,  1  East,  96  ;  Lubbock 
V.  Potts,  7  East,  449 ;  Juhel  v.  Church,  2  Johns.  Cas.  33-3.  The  question  has  arisen 
whether  a  party  effecting  an  illegal  insurance,  and  having  paid  the  premium,  has  not  a 
locus  poznitentice,  so  that  he  can  rescind  the  contract,  and  recover  the  premium,  before  a 
loss  occurs.  It  was  held  that  he  might  in  Tappendeu  v.  Randall,  2  Bos.  &  Pul.  467  ; 
and  in  Aubert  v.  Walsh,  3  Taunt.  277.  This  view  is  also -supported  by  Buller,  J.,  in 
Lowry  v.  Bourdieu,  Doug.  468.  But  in  Palyart  v.  Leckie,  6  M.  &  S.  290,  it  was  held 
that  to  entitle  the  assured  to  recover  back  the  premium  in  such  a  case,  he  must  have 
made  a  formal  renunciation  of  the  contract  prior  to  the  bringing  of  the  action,  although 
the  adventure  had  never  commenced.  Lord  Ellenborowjh  expresses  his  regret  that  the 
vale  of  locus  pcenitenticB  was  ever  adopted. 

•^  Wiggin  V.  Suffolk  Ins.  Co.  18  Pick.  14.5.     See  2  Phillips  on  Ins.  ^  1839. 

3  Murray  v.  Col.  Ins.  Co.  11  Johns.  302  ;  Hickman  v.  Carstairs,  5  B.  &  Ad.  651; 
Hunter  v.  Leathley,  10  B.  &  C.  858.  See  also  M'Cargo  v.  Merch.  Ins.  Co.  10  Rob. 
La.  334  ;  Courtnay  v.  Miss.  F.  &  M.  Ins.  Co.  12  La.  233. 

*  Sorbe  v.  Merch.  Ins.  Co.  6  Louis.  185,  In  tWs  case  the  insui-ance  was  on  goods 
to  be  shipped  from  Havre  or  any  port  south  of  it  in  France  during  a  period  of  six 
months.  The  goods  were  put  on  board  before  the  expiration  of  tlie  time,  but  the  ship 
did  not  sail  till  after.  Held  that  they  were  covered.  See,  however,  Atkins  v.  The  Boyl- 
ston  F.  &  M.  Ins.  Co.  5  Met.  439. 

5  Ballard  v.  Merch.  Ins.  Co.  9  La.  258. 

^  Ruan  V.  Gardner,  1  Wash.  C.  C.  145 ;  Hall  v.  Mollineaux,  cited  in  Le  Mesurier  v. 
Vaughan,  6  East,  382,  386  ;  Clapham  v.  Cologan,  3  Camp.  382 ;  Emcrigon,  Meredith's 
ed.  c.  6,  §  2. 

37* 


438  ELEMENTS   OF  MERCANTILE    LAW.  [CIL   XVIII. 

this  appears  to  have  been  the  intention  of  the  parties.^  "  Cargo," 
"  goods  on  board,"  "  merchandise  "  mean  much  the  same  thing ; 
and  do  not  attach  to  ornaments,. clothing  or  the  like,  owned  by- 
persons  on  board  and  not  intended  for  commercial  purposes.^ 
"  Property  "  is  the  word  of  widest,  and  almost  unlimited  mean- 
ing.'^ "  Ship  "  or  "  vessel  "  includes  all  that  belongs  to  it  at  the 
time^  —  even  to  sextants  or  chronometers  belonging  to  the  ship- 
owner, and_by  him  appropriated  to  the  navigation  of  the  ship.^ 
So  it  includes  all  additions  or  repairs  made  during  the  insuratice.'^ 

The  phrase,  "  a  return  cargo,"  will  generally  apply  to  a  home- 
ward cargo  of  the  party  insured  in  the  same  ship,  however  it  be 
procured  ;  but  the  phrases  "  proceeds  "  or  "  returns,"  are  generally 
regarded  as  limited  to  a  return  cargo  bought  by  means  of  the 
outward  cargo.'^  And  neither  of  these,  or  any  similar  phrases,  will 
apply  to  the  same  cargo  brought  back  again,  unless  it  can  be 
shown,  by  the  usage,  or  other  admissible  evidence,  that  this  was 
the  intention  of  the  parties.^ 

The  interest  of  the  insured  need  not  be  specified,  unless  pecu- 
liar circumstances,  closely  connecting  this  interest  with  the  risk, 

1  See  Henchman  v.  Offley,  2  H.  Bl.  345,  n.  In  Kewley  v.  Ryan,  2  H.  Bl.  343,  there 
were  two  cargoes  to  which  the  policy  would  apply.  The  court  held  that  the  insured 
had  a  right  to  apply  it  to  either  so  that  they  came  within  the  terms  of  the  policy.  See 
Harmau  v.  Kingston,  3  Camp.  150;  Edwards  v.  St.  Louis  Perpetual  Ins.  Co.  7  Mas- 
souri,  382. 

2  lloss  V.  Thwaitcs,  Park  on  Ins.  23. 

^  In  Whiton  v.  Old  Colony  Ins.  Co.  2  Met.  1,  it  was  held  that  the  term  "  property  " 
included  current  bank  bills  on  board  a  vessel,  the  insured  intending  to  use  the  same 
in  purchasing  merchandise,  which  would,  when  bought,  be  covered  by  the  policy.  See 
also  Wiggin  v.  Mer.  Ins.  Co.  7  Pick.  271 ;  Holbrook  v.  Brown,  2  Mass.  280. 

*  Robertson  v.  Ewer,  1  Term,  127;  Eorbes  v.  Aspiuall,  13  East,  325;  Brough  v. 
Whitmore,  4  Term,  208 ;  Hill  v.  Patten,  8  East,  373  ;  Blackett  v.  Roy.  Ex.  Ass.  Co.  2 
Cr.  &  Jer.  244 ;  Hall  v.  Ocean  Ins.  Co.  21  Pick.  472. 

5  1  Phillips  on  Ins.  §  468 

^  Le  Cheminant  v.  Pearson,  4  Taunt.  3G7. 

'  Haven  r.  Gray,  12  Mass.  71;  Whitney  v.  Am.  Ins.  Co.  3  Cowcn,  210;  S.  C.  5 
Cowen,  712.  In  this  case  the  insurance  was  on  the  outward  cargo  and  the  returns 
home.  The  returns  were  valued  in  the  policy  at  $14,000.  The  court  held  that  if  the 
outward  cargo  had  been  sold  for  87,000,  and  the  return  cargo  purchased  with  the  avails, 
the  insured  could  recover  to  the  amount  of  $14,000  ;  and  so  if  the  outward  cargo  had 
been  pledged  to  the  full  value  instead  of  being  sold. 

^  Dow  y.  Hope  Ins.  Co.  1  Hall,  166 ;  Dow  v.  Whetten,  8  Wend.  160.  In  this  case, 
the  captain,  on  arrival  at  the  outvs^rd  port  of  destination,  finding  no  market  for  the 
goods,  brought  them  home  again.  They  were  damaged  on  the  homeward  voyage,  and 
the  owners  claimed  to  recover  on  the  ground  that  the  term  "proceeds  "  would  cover  the 
same  goods  if  brought  home.  The  Superior  Court  of  New  York  City  decided  in  favor 
of  the  defendants.  An  appeal  was  taken  to  the  Supreme  Court,  and  the  plaintiff  non- 
suited. It  then  came  up  before  the  Court  of  Errors,  (8  Wend.  160,)  and  the  judgment 
of  the  Supreme  Court  was  reversed  solely  on  the  ground  that  evidence  was  rejected 
tending  to  show  a  usage  that  the  term  "proceeds  "  was  meant  to  cover  the  same  goods 
if  brought  back. 


Cir.  XVIII.]  OF   MARINE   INSURANCE.  439 

may  make  this  necessary.^  But  either  a  mortagor  or  a  mortga- 
gee,- a  charterer,'^  an  assignee,'*  or  consignee,'^  or  trustee,''  or  car- 
rier," may  insure  as  on  their  own  property. 

We  have  seen  that  it  is  common  to  cover  profits  by  valuation 
of  the  goods  ;  ^  but  no  insurance  on  ship,  goods,  or  freight,  will,  as 
such,  cover  the  profits.^ 

So  it  is  common  to  cover  the  freight  by  over-valuation  of  the 
ship ;  but  an  open  policy  on  the  ship  does  not  cover  the  freight. 
An  owner  of  both  ship  and  cargo  may  cover  by  the  word  freight, 
what  his  ship  would  earn  by  carrying  that  cargo  for  another.^o 
Insurance  on  freight  from  one  port  to  another,  covers  the  freight 
on  goods  taken  in  by  agreement  at  ports  intermediate  to  them.^^ 
But  if  the  insurance  be  on  freight,  and  the  description  of  the 
goods  be  such  that  the  insurance,  had  it  been  on  goods,  would 
not  have  attached,  the  insurance  will  not  attach  to  the  freight.^^ 

Freight  "  to  "  a  place  is  valid,  although  the  cargo  is  to  go  fur- 
ther, and  the  freight  be  paid  only  at  the  more  distant  port.^^  But 
insurance  on  freight  "  at  and  from  "  a  place  does  not  cover  freight 
"  to  "   that  place.^*     If  a  charterer   pays  a  certain  price  to  the 


I  Lawrence  v.  Van  Home,  1  Caiues,  276  ;  Murray  v.  Columbian  Ins.  Co.  1 1  Johns. 
302. 

-  Traders'  Ins.  Co.  v.  Eobert,  9  Wend.  404  ;  Carpenter  v.  Providence  Wash.  Ins.  Co. 
16  Peters,  495.     See  also  ante,  p.  413,  n.  5. 
3  Oliver  r.  Greene,  3  Mass.  133  ;  Bartlet  v.  Walter,  13  Mass.  267. 

*  Paradise  v.  Sun  Mat.  Ins.  Co.  6  La.  Ann.  R.  596. 

5  Putnam  v.  Mercantile  Mar.  Ins.  Co.  5  Met.  386.  See  alSo  De  Forest  v.  Fulton  F. 
Ins.  Co.  1  Hall,  84.  In  this  case  the  question  of  the  right  of  a  special  owner  to  inshre 
■without  specifving  his  interest,  is  thoroughly  discussed.     See  ant^-p.  413,  n.  4. 

«  Stetson  r.'Mass.  F.  &  Mar.  Ins.  Co.  4  Mass.  330;  Bell  v.  Western  Mar.  &  F.  Ins. 
Co.  5  Rob.  La.  424. 

T  SQeante,  p.  413,  n.  2. 

*  See  ante,  p.  410,  n.  9. 

9  Lucena  v.  Craufurd,  5  B.  &  P.  315. 

w  Wolcott  r.  Eao-lc  Ins.  Co.  4  Pick.  429,  435  ;  Dumas  v.  Jones,  4  Mass.  647 ;  Hart 
V.  Del.  Ins.  Co.  2  Wash.  C.  C.  346 ;  Flint  v.  Flemyug,  1  B.  &  Ad.  45. 

II  Barclay  v.  Stirling,  5  M.  &  S.  6. 

12  Adams  v.  Warren  Ins.  Co.  22  Pick.  163.  In  this  case  the  insurance  was  on  freight 
generally.  The  goods  had  not  been  put  on  bo.ard,  but  a  specific  contract  had  been  en- 
tered into  respecting  them.  Some  were  to  be  carried  above,  and  some  under  deck.  It 
was  held  that  for  the  portion  to  be  carried  under  deck  the  insured  might  recover  his 
freight,  but  not  for  that  which  was  to  have  been  carried  on  deck.  See  also  Wolcott  i\ 
Eagle  Ins.  Co.  4  Pick.  429  ;  AUegre  v.  Maryland  Ins.  Co.  6  II.  &  J.  408. 

i"^  Taylor  v.  Wilson,  15  East,  324.  Freight  was  insured,  in  this  case,  from  St.  Ubes 
to  Portsmouth  ;  the  ship  was  to  sail  from  St.  Ubes  to  Gottenburgh  intending  to  pro- 
ceed first  to  Portsmouth.  Held,  that  the  plaintiff"  might  recover,  though  the  ultimate 
destination  of  the  ship  was  not  known  to  the  miderwriters.  See  also  Hughes  v.  Un. 
Ins.  Co.  3  Wheat.  159. 

!■*  Bell  v.  Bell,  2  Camp.  475.  The  policy  was  on  freight  "at  and  from  Riga,"  in  con- 
tinuation of  two  other  policies  to  Riga.  The  vessel  was  seized  at  Riga  before  the  out- 
ward cargo  was  discluu-ged.  It  was  held  that  the  policy  did  not  apply  to  the  freight 
lost,  but  to  that  of  the  return  cargo. 


440  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVIII. 

owner,  and  has  agreed  to  carry  cargo  for  another  at  a  higher 
price,  he  may  insure  the  difference,  which  is  his  profit,  under  the 
name  of  freight.' 


SECTION  XIII. 

OF    THE   PERILS    COVERED   BY   THE   POLICY. 

The  policy  enumerates,  as  the  causes  of  loss  against  which 
it  insures,  Perils  of  the  Sea,  Fire,  Piracy,  Theft,  Barratry,  Cap- 
ture, Arrests,  and  Detentions  ;  -  and  "  all  other  perils,"  by  which  is 
meant  by  construction  of  law,  all  other  perils  of  a  like  kind  with 
those  enumerated.-^ 

It  is  a  universal  rule,  that  the  insurers  are  liable- only  for  extra- 
ordinary risks.  The  very  meaning  of  "  seaworthiness,"  which 
the  insured  warrants,  is  that  the  ship  is  competent  to  encount 
with  safety  all  ordinary  perils.*  If  she  be  lost  or  injured,  and  the 
loss  evidently  arose  from  an  ordinary  peril,  as  from  common 
weather,  or  the  common  force  of  the  waves,  the  insurers  are  not 
liable,  because  the  ship  should  be  able  to  withstand  these  as- 

1  Clark  V.  Ocean  Ins.  Co.  16  Pick.  289.  In  Riley  v.  Delafiekl,  7  Johns.  522,  the 
plaintiff  was  not  the  charterer.  Previous  to  the  insurance  he  had  owned  the  vessel,  and 
had  chartered  her  to  A,  and  then  had  sold  her  to  B.  On  account  of  the  charter  it  was 
agreed  between  the  plaintiff  and  B  that  the  former  should  have  the  lienefit  of  the  freight 
arising  from  that  voyage,  .which  was  the  one  insured.  The  plaintiii'  was  thus  neither 
the.  general  owner  of  the  vessel  nor  the  owner  pro  hue  vice,  and  on  these  grounds  the 
court  held  that  he  could  not  recover,  having  insured  his  interest  under  the  title  of  freight, 
without  stating  tlie  circumstances  of  the  case.  In  Mellen  i\  Nat.  Ins. .Co.  1  Hall,  463, 
the  plaintiff,  on  the  arrival  of  the  vessel,  was  to  receive  a  certain  amount  for  carrying 
goods,  and  to  pay  an  equal  or  greater  amount  as  charterer.  As  he  would  lose  nothing 
if  she  did  not  arrive,  the  court  held  that  he  had  no  insurable  interest. 

^  The  perils  usually  enumerated  in  the  Boston  policies  are  "  of  the  seas,  fire,  ene- 
mies, pirates,  assailing  thieves,  restraints,  and  detainments  of  all  kings,  princes,  or 
people  of  what  nation  or  quality  soever,  barratry  of  the  master,  unless  the  insured  be 
owner  of  the  vessel,  and  of  mariners,  and  all  the  losses  and  misfortunes  which  have  or 

shall  come  to  the  damage  of  the  said or  any  part  thereof,  to  which  insurers  are 

liable  by  the  rules  and  customs  of  insurance  in  Boston."  And  they  are  substantially 
the  same  in  our  other  commercial  cities. 

^  In  EUery  v.  N.  Eng.  Ins.  Co.  8  Pick.  14,  it  was  held  that  damage  done  to  a  ship 
by  the  violence  of  the  wind  while  being  hauled  upon  a  marine  railway  for  the  purpose 
of  being  repaired,  and  while  she  was  partly  on  land,  was  covered  by  the  general  clause. 
In  Butler  v.  Wildman,  3  B.  &  Aid.  398,  dollars  were  thrown  overboard  to  prevent  their 
being  captured.  It  was  held  that  it  was  covered  by  the  general  clause.  So  where  a 
ship  was  fired  into  by  mistake  and  sunk.  Cullcn  v.  Butler,  5  M.  &  S.  461.  See  also 
Devaux  v.  J.  Anson,  5  Bing.  N.  C.  519;  Phillips  v.  Barber,  5  B.  &  Aid.  .161  ;  Skid- 
more  V.  Desdoits,  2  Johns.  Cas.  77 ;  Caldwell  r.  St.  Louis  Perpet.  Ins.  Co.  1  Louis. 
Ann.  85.     See  also  Moses  v.  The  Sun  Mut.  Ins.  Co.  1  Duer,  159,  post,  172,  n. 

*  See  M'Lanahan  v.  Univ.  Ins.  Co.  1  Peters,  170:  Small  v.  Gibson,  3  Eng.  L.  &  Eq. 
299;S.  C.24id.  16. 


en.  XVIII.]  OF  MARIXE  INSUEAXCE.  441 

savilts.i  ^j^j  jf  i\^Q  ]qss  be  unexplained,  and  no  extraordinary 
peril  be  shown  or  indicated,  this  fact  would  raise  a  very  strong 
presumption  of  unseaworthiness.^ 

So  the  insurers  are  not  liable  for  loss  or  injury  by  wear  and 
tear,  or  natural  decay,  or  the  effect  of  age.'^  The  ship  itself,  and 
every  part  of  it,  and  everything  which  belongs  to  it,  must  give  out 
at  some  time  ;  and  when  it  is  actually  lost,  the  insurers  are  not 
held  without  suilicient  evidence  of  a  cause  adequate  to  the  loss 
of  such  a  thing,  if  it  were  in  a  good  condition  and  properly  se- 
cured. For  without  this  evidence  it  would  be  presumed  to  have 
been  lost  by  its  own  defect.* 

It  is,  indeed,  another  universal  rule,  that  the  insurers  are  never 
liable  for  a  loss  which  is  caused  by  the  quality  of  the  thing  Ipst. 
This  rule  applies,  as  above  stated,  to  the  ship,  her  rigging  and 
appurtenances,  when  worn  out  by  age  or  hard  service.  But  its 
most  frequent  application  is  to  perishable  goods.  The  memo- 
randum, already  spoken  of,^  provides  for  this  in  some  degree. 
But  the  insurers  are  liable  for  the  loss  of  no  article  of  merchan- 
(fise  whatever,  if  that  loss  were  caused  by  the  inherent  qualities 
or  tendencies  of  the  article,  unless  these  qualities  or  tendencies 
were  excited  to  action,  and  made  destructive  by  a  peril  insured 
against.^     Thus,  if  hemp  rots  from  spontaneous  fermentation, 

'  111  Ballard  v.  Eodger  Williams  Ins.  Co.  1  Curtis,  148,  Mr.  Justice  Curtis  held  that 
the  la^v  required  vessels  to  be  sufficiently  strong  to  resist  the  ordinary  action  of  the  sea 
in  the  voyages  for  which  they  might  be  insured;  but  that  the  ordinary  action  of  the 
wind  and  sea  did  not  mean  the  winds  and  sea  to  be  ordinarily  met  witli  in  the  voyage 
insured.  He  accordingly  hald  that  heavy  cross-seas  were  not  the  ordinary  action  of 
the  sea  within  the  meaning  of  this  rule,  however  common  they  might  be  in  the  voyage 
insured.     See  also  ante,  p.  425,  n.  1. 

-  See  cases  cited  aiUe,  p.  425,  n.  6. 

3  "Where  a  cable  is  clmfed  by  the  rocks,  or  the  fluke  of  an  anchor  broken  off,  in  a 
place  of  usual  anchorage,  and  under  no  extraordinary  circumstances  of  wind  and 
weather,  this  is  ordinary  wear  and  tear  for  which  the  owner  is  alone  liable.  Beueche, 
Pr.  of  Inden.  456.  See  also  1  Phillips  on  Ins.  §  1105;  Coles  r.  Marine  Ins.  Co.  3 
Wash.  159  ;  Dupeyre  v.  The  Western  Mar.  &  F.  Ins.  Co.  2  Kob.  Louis.  457. 

*  In  Coles  V.  Marine  Ins.  Co.  3  Wash.  159,  it  was  held  that  it  was  not  sufficient 
for  the  insured  to  prove  that  there  were  storms  during  the  voyage,  unless  the  injuries 
sustained  could  be  fairly  traced  to  that  cause.  In  The  Louisville  Mar.  &  F  Ins.  Co. 
r.  Bland,  9  Dana,  143,  a'declaration  which  did  not  state  the  caixse  of  the  loss,  nor  that 
the  loss  arising  from  the  damage  to  the  goods,  even  if  it  were  occasioned  by  one  of  the 
perils  insured  against,  was  one  for  which  the  insurers  were  liable  under  the  several 
agreements  of  warranty,  -u^s  held  defective.  See  also  Flemming  v.  Marine  Ins.  Co.  4 
Whart.  59  ;»Leftwitch  v.  St.  Louis  Perpet.  Ins.  Co.  5  Louis.  Ann.  706. 

^  See  ante,  p.  421,  n.  5.  ^ 

6  See  Clark  v.  Barnwell,  12  How.  272  ;  Tatham  v.-Hodgson,  6  Term,  656;  1  Emer. 
393,  c.  12,  §  9  ;  Goold  i-.  Shaw,  1  Johns.  Cas.  293 :  2  id.  442.  Nor  are  they  liable  for 
the  waste  occasioned  by  ordinary  leakage.  2  Val.  83,  tit.  Ins.  a.  31.  Nor  for  breakage. 
Stevens,  pt.  3,  a.  1. 


442  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII. 

which  cannot  occur  if  it  be  dry,  the  insurers  are  not  liable  if  the 
loss  arose  from  the  dampness  which  the  hemp  had  when  laden 
on  board  ;  but  if  the  vessel  were  strained  by  tempest,  and  her 
seams  opened,  and  the  hemp  was  in  this  way  wet,  and  then 
rotted,  they  are  liable.^ 

The  insurers  do  not,  of  course,  insure  any  man  against  his 
own  acts.  But  when  we  consider  whether  they  are  liable  for 
losses  caused  by  the  agents  or  servants  of  the  insured,  it  is  neces- 
sary to  make  a  somewhat  nice  distinction.  Beginning  with  the 
general  principle,  which  should  apply  as  well  to  the  contract  of 
insurance  as  to  all  others,  we  say  that  the  owner,  as  principal,  is 
liable  for  the  acts  of  his  agents  while  they  are  acting  as  his 
agents,  and  only  executing  the  work  he  gave  them  to  do,  in  a 
manner  which  conforms  with  his  instructions  and  authority.  But 
for  the  negligence  or  wilful  misconduct  of  the  master  or  crew, 
the  insurers  may  be  liable,  because,  in  this  respect.,  they  are  not 
the  agents  of  the  owner.  They  are  his  agents,  if  he  directed  the 
very  negligence  or  wrongful  act  which  destroys  the  property  in- 
sured, and  the  insurers  are,  of  course,  discharged.^     So  they  are, 

1  In  Boyd  v.  Dubois,  3  Camp.  133-,  insurance  was  effected  on  hemp,  on  a  voyage 
from  London  to  the  coast  of  Devonshire.  On  tlie  voyage,  a  fire  broke  out  in  the  night, 
and  the  greater  part  of  the  cargo  was  consumed.  Lord  Ellenhorongh  said  :  "  If  the 
hemp  was  put  on  board  in  a  state  liable  to  effervesce,  and  it  did  effervesce,  and  generate 
the  lire  which  consumed  it:  upon  the  common  principles  of  insurance  law,  the  assured 
cannot  recover  for  a  loss  which  he  himself  has  occasioned." 

^  In  General  Int.  Ins.  Co.  v.  Euggles,  12  Wheat.  410,  Thompson,  J.,  says:  "If  the 
loss  of  the  vessel  had  been  occasioned  by  any  misconduct  of  the  master,  short  of  bar- 
ratry, whilst  in  the  prosecution  of  the  voyage,  and  liefore  the  loss  ha))pcned,  or  if,  at 
the  time  this  misconduct  is  alleged  in  him,  he  was  the  exclusive  agent  of  the  owner,  for 
any  purpose  connected  with  procuring  the  insurance,  the  owner  must  bear  the  loss." 
In  this  case,  the  vessel  had  been  lost  Ijcforc  the  insurance  was  procured,  but  the  captain 
kept  this  fact  from  the  owner,  who  procured  the  insurance  bona  fide.  Held,  that  the  in- 
surers were  liable.  See  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222;  Busk  v.  Boy,  Exeh. 
Ass.  Co.  2  B.  &  Aid.  73  ;  Jordan  v.  Warren  Ins.  Co.  1  Story,  342 ;  AValker  i'.  Mait- 
land,  .5  B.  &  Aid.  171 ;  Dixon  v.  Sadler,  5  M.  &  W.  415  ;  Williams  v.  Suffolk  Ins.  Co. 
3  Sumn.  270;  S.  C.  13  Pet.  415.  Sec  also  the  remarks  oi  Shaw,  C.  J.,  in  Copeland  v. 
New  Eng.  Mar.  Ins.  Co.  2  IMct.  443.  But  if  the  master  acts  in  bad  faith,  or  is  guilty 
of  gross  negligence  in  the  discliarge  of  his  duty,  or  violate  the  law,  then  the  under- 
writers are  discharged.  Cleveland  v.  Union  Ins.  Co.  8  Mass.  30S  ;  Phyn  v.  Roy.  Exch. 
Ass.  Co.  7  Term,  505 ;  Siordet  v.  Hall,  4  Bing.  G07;  Coffin  v.  Newburyport  Ins.  Co.  9 
Mass.  436.  A  more  difficult  question  has  arisen,  whether  the  insurers  are  liable  for  a 
loss,  the  remote  cause  of  which  was  the  negligence  of  the  master  or  mariners,  but  the 
proximate  cause  a  peril  insured  against.  In  Andrews  v.  Essex  Mar.  Ins.  Co.  3  Mason, 
6,  Mr.  Justice  Stonj  considered  this  a  vexed  question.  In  '^illianis  v.  Suffolk  Ins.  Co. 
3  Sunm.  27G,  he  says:  "As  to  the  point  of  gross  negligence,  not  amounting  to  fraudu- 
lent conduct,  if  such  a  case  were  made  out,  it  would  not  help  the  defence.  It  has  been 
repeatedly  settled,  by  the  Supreme  Court  of  the  United  States,  that,  if  the  immediate 
cause  of  a  loss  is  a  peril  insured  against,  it  is  no  ground  of  defence  tliat  it  was  remotely 
caused  by  the  negligence  of  the  master  or  crew;  the  rule  being,  cai(s«  proxima,  non 
remota  spectatur:'     See  also  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222;  Columbian  Ins. 


en.  XVIII.]  OF   MARINE   INSURANCE.  443 

if  the  misconduct  be  such  as  to  prove  the  original  unfitness  of 
the  master  or  crew,  and  therefore  to  show  the  unseaworthiness 
of  the  ship  in  this  particular ; '  or  if  they  give  the  insurers  the 
defence  of  deviation,  or  the  like.'^ 

The  insurers  may  take  upon  themselves  whatever  risks  they 
choose  to  assume.  And  express  clauses  in  a  policy,  or  the  uni- 
form and  established  usage  and  construction  of  policies,  may 
throw  upon  them,  as  in  fact  it  does,  a  very  large  liability,  for  the 
effects  of  the  misconduct  —  wilful  or  otherwise  —  of  the  master 
and  crew.  The  clause  relating  to  barratry,  to  be  spoken  of 
presently,  is  of  this  kind.^ 

If  the  cargo  is  damaged  through  the  fault  of  the  master  or 
crew,  the  shipper  has  a  remedy  against  the  owner  of  the  ship. 
But  this  does  not  necessarily  discharge  the  insurers.  If,  how- 
ever, he  enforces  his  claim  against  them,  he  is  bound  to  transfer 
to  them,  by  a  kind  of  subrogation,  his  claim  against  the  ship- 
owner. For  the  insurers  of  the  cargo,  by  paying  a  loss  thereon, 
put  themselves,  as  it  were,  in  the  position  of  the  shippers,  and 
acquire  their  rights.^ 

Generally,  no  loss  will  be  attributed  to  the  negligence  or  de- 
fault of  the  master  or  crew,  which  can  be  with  as  good  reason 
attributed  to  any  of  the  perils  insured  against.^ 


SECTION  XIV. 

OF   PERILS   OF   THE   SEA. 

By  this  phrase  is  meant  all  the  perils  incident  to  navigation ; 
and  especially  those  arising  from  the  wind  and  weather,  the  state 
of  the  ocean,  and  its  rocks  and  shores.     But  it  will  be  remem- 

Co.  V.  Lawrence,  10  Pet.  507;  Waters  v.  Merchants'  Ins.  Co.  11  Pet.  213;  Delano  v. 
Bedford  Ins.  Co.  10  Mass.  347;  Walker  v.  Maitland,  5  B.  &  Aid.  171.  See,  however, 
De  Vaux  v.  Salvador,  4  Ad.  &  Ell.  420.  See  also  The  Gen.  Mut.  Ins.  Co.  v.  Sher- 
wood, 14  How.  351;  Matthews  v.  Howard  Ins.  Co.  1  Kernan,  9;  Nelson  v.  Suffolk 
Ins.  Co.  8  Cush.  477;  Montoya  v.  London  Ass.  Co.  4  Eng.  Law  and  Eq.  500.  See, 
also,  remarks  in  section  15,  on  Collision. 

1  If  a  ship  sail  with  an  incompetent  crew,  the  policy,  as  we  have  seen,  never  attaches. 
Walden  v.  Firera.  Ins.  Co.  12  Johns.  133;  Copeland  v.  N.  E.  Ins.  Co.  2  Met.  432. 

^  See  inf)-a,  tit.  "Deviation." 

3  See  infra. 

*  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  285 ;  Bell  v.  Western  M.  &  F.  Ins.  Co.  5 
Rob.  (Louis.)  423,  442  ;  Russell  v.  Union  Ins.  Co.  4  Dall.  421 ;  Gracie  v.  N.  Y.  Ins.  Co. 
8  Johns.  245.     See  also  a7ite,  p.  413,  n.  5. 

^  Potter  V.  Suffolk  Ins.  Co.  2  Sumn.  197. 


444  ELEMENTS   OF  MERCANTILE  LAW.  [cn.  XVIII. 

bered  that  the  insurers  take  upon  themselves  only  so  many  of 
these  as  are  "  extraordinary."  ^  Hence,  destruction  by  worms,  is 
not  such  a  peril  as  the  insurers  are  liable  for,  because  it  is  not 
extraordinary .2  It  is  known  to  exist  in  all  waters ;  and  in  certain 
waters,  and  at  certain  seasons,  this  danger  is  very  great;  and  it 
is  the  duty  of  the  insured  to  guard  against  this.  But  if  the  ves- 
sel, or  the  cargo  —  which  is  far  more  common  —  be  injured  by 
rats,  this  has  been  regarded  as  so  far  an  extraordinary  peril,  that, 
if  the  insured  have  taken  reasonable  precaution  against  them, 
the  insurers  are  liable.  There  is  now,  however,  some  disposition 
to  put  the  danger  from  rats  on  the  same  footing  as  that  from 
worms. 3 

If  a  vessel  reach  a  harbor  in  the  course  of  its  voyage,  and  is 
therein  detained  by  stress  of  weather,  or  by  being  frozen  in,  or 
by  any  such  cause,  the  expenses  of  the  delay,  which  may  be  very 
considerable,  are  the  loss  of  the  owner,  and  not  of  the  insurers.* 


'  The  Schooner  Eeeside,  2  Sumn.  567,  571.  In  this  case,  Mr.  Justice  Story  says: 
"  The  phrase,  '  danger  of  the  seas,'  whether  understood  in  its  most  limited  sense,  as  im- 
porting only  a  loss  by  the  natural  accidents  peculiar  to  that  clement ;  or  whether  under- 
stood in  its  more  extended  sense,  as  including  inevitable  accidents  upon  that  element, 
must  still,  in  either  case,  be  clearly  understood  to  include  only  such  losses  as  are  of  an 
extraordinary  nature,  or  arise  from  some  irresistil>le  force,  or  some  overwhelming  power, 
which  cannot  be  guarded  against  by  the  ordinary  exertions  of  human  skill  and  pru- 
dence." .   ' 

2  Eohl  V.  Parr,  1  Esp.  445  ;  Martin  v.  Salem  Ins.  Co.  2  Mass.  420  ;  Hazard  r.  N.  E. 
Mar.  Ins.  Co.  1  Sumn.  218  ;  S.  C.  8  Pet.  557. 

3  Hunter  v.  Potts,  4  Camp.  203.  In  this  case,  goods  were  insured  on  a  voyage  from 
London  to  Honduras,  with  leave  to  touch  at  Antigua.  While  at  the  last-named  port, 
her  timbers  were  so  damaged  by  rats  that  a  survey  was  called,  and  the  vessel  con- 
demned. Lord  Ellenborour/li  held  that  the  underwriters  were  not  liable.  See  also 
Aymar  v.  Astor,  6  Cow.  266  ;  Dale  v.  Hall,  1  Wils.  281.  In  this  last  case,  it  was  de- 
cided that  a  common  carrier  was  liable  for  damage  caused  by  rats.  And  it  is  fully 
sustained  in  a  late  case  in  England,  Laveroni  v.  Drury,  8  Exch.  166 ;  S.  C.  16  Eng.  L. 
&  Eq.  510.  This  was  an  action  against  a  common  carrier  for  damages  caused  by  rats. 
The  defence  was,  that  the  captain  had  two  cats  on  board.  According  to  the  writers  on 
foreign  maritime  law,  this  would  have  been  a  good  defence.  See  Emerigon,  377,  378  ; 
Roccus  de  Navibus,  n.  58;  Consulat  de  la  Mer.  cc.  66,  67.  But  the  court  held  that  it 
was  no  excuse.  Pollock,  C.  B.,  says  :  "Now,  whatever  might  have  been  the  case  when 
Roccus  wrote,  we  cannot  but  think  that  rats  might  be  banished  from  a  ship  by  no  very 
extraordinary  degree  of  diligence  on  the  part  of  the  master,  and  we  are  further  very 
strongly  inclined  to  believe,  that,  in  the  present  mode  of  stowing  cargoes,  cats  would 
atFord  a  very  slight  protection,  if  any,  against  rats.  It  is  ditRcult  to  understand  how,  in 
a  full  ship,  a  cat  could  get  at  a  rat  in  the  hold  at  all,  or  at  least  with  the  slightest 
chance  of  catching  it."  If  a  common  carrier  is  responsible  for  such  a  peril,  it  follows 
that  an  underwriter  is  not.  The  case  of  Garrigues  v.  Coxe,  1  Binney,  592,  supports 
the  \iew  that  an  insurer  will  be  liable  in  such  a  case,  if  there  be  no  fault  on  the  part  of 
the  captain.  Chancellor  Kent  says,  (3  Comra.  p.  301 ) :  "  The  better  opinion  would 
seem  to  be,  that  an  insurer  is  not  liable  for  damage  done  to  a  ship  by  i-ats,  because  it 
arises  from  the  negligence  of  the  carrier,  and  may  be  prevented  by  due  care,  and  is 
within  the  control  of  human  prudence  and  sagacity." 

*  Everth  v.  Smith,  2  M.  &  Sel.  278. 


en.  xvni.l  OF  marine  insurance.  445 

•• 

.But  those  incurred  by  bearing  away  for  repair,  fall,  as  \vill»be 

more  fully  stated  hereafter,  upon  the  insurers.^ 

If  a  vessel  be  not  heard  from,  it  will  be  supposed,  after  a 
reasonable  interval,  that  she  has  perished.  The  presumption  of 
law  will  be,  that  she  was  lost  by  an  extraordinary  })eril  of  the 
sea,  and,  of  course,  the  insurers  will  be  answerable  for  her.  But 
this  presumption  may  be  rebutted  by  any  sufficient  evidence.^ 

SECTION    XV. 

OF   COLLISION. 

Collision  is  a  peril  of  the  sea  which  may  deserve  especial 
notice.  In  the  chapter  on  Shipping,  it  has  been  stated  that, 
where  a  collision  is  caused  by  the  fault  of  one  of  the  ships,  the 
ship  in  fault  sustains  the  whole  loss ;  that  is,  it  must  bear  its  own 
loss,  and  must  indemnify  the  other  ship  for  the  injury  that  ship 
sustains.  It  has  been  held  that  the  insurers  of  the  ship  in  fault 
are  liable  for  the  whole  of  this  loss,  because  it  is  all  caused  by 
collision,  which  is  a  peril  of  the  sea.^  But  the  Supreme  Court 
of  the  United  States  have  recently  decided  that  the  insurers  are 
not  held  for  more  than  the  loss  directly  sustained  by  the  ship 
they  insure ;  because  they  neither  insure  the  ship  not  in  fault, 
nor  do  they  insure  the  owners  of  the  ship  in  fault  against  mere 
indebtedness  which  is  cast  upon  them  by  the  negligence  of  their 
servants ;  for  negligence  can  never  be  the  ground  of  a  claim,  al- 
though it  may  be  no  defence  against  a  claim  arising  from  a  peril 
insured  against.*  This  view  has  been  adopted  and  emphatically 
approved  by  the  Court  of  Appeals  ^  of  New  York,  reversing  a 
decision  of  the  Supreme  Court ;  ^  and  this  rule  now  rests  on  the 
weight  of  authority.     The  question  is  one  of  much  difficulty; 

1  See  infra,  p.  481,  n.  2. 

2  Brown  v.  Neilson,  1  Caines,  525.  In  this  case,  the  judge  ruled  that  there  was  no 
time  fixed  by  law,  after  which  a  missing  vessel  should  be  presumed  to  be  lost,  but  that, 
if  a  vessel  did  not  arrive  within  the  most  usual  limits  of  the  voyage  she  was  prosecut- 
ing, she4iBught  to  be  presumed  to  be  lost,  and  that  it  would  not  be  I'easonable  to  calcu- 
late on  the  utmost  or  greatest  limit  of  it.  See  also  Green  f.  Brown,  Strange,  1199; 
Patterson  v.  Black,  Marsh,  on  Ins.  781;  AYatson  v.  King,  1  Stark.  121 ;  Twcmlow  v. 
Oswin,  2  Camp.  85  ;  Cohen  v.  Hinckley,  2  Camp.  51;  Houstmau  v.  Thornton,  Holt, 
N.  P.  242;  Koster  v.  Reed,  6  B.  &  C.  19. 

3  Nelson  et  al.  v.  Suffolk  Ins.  Co.  8  Cush.  477. 
*  Gen.  M.  Ins.  Co.  v.  Sherwood,  14  How.  352. 
^  Matthews  v.  The  Howard  Ins.  Co.  9  Kern.  9. 

6  Matthews  v.  The  Howard  Ins.  Co.  13  Barb.  234. 

38 


• 


446  ELEMENTS   OP  MERCANTILE  LAW.  [CH.  XVIII. 


butt,  upon  the  whole,  we  think  the  rule  as  now  established  by| 
the  Supreme  Court  of  the  Union,  and  the  highest  court  of  our 
principal  mercantile  State,  rests  on  the  better  reason. 

The  Supreme  Court  of  the  United  States^  once  confirmed  a 
decision  of  the  Circuit  Court  for  the  first  circuit,^  to  the  effect, ; 
that,  where  a  collision  takes  place  without  fault,  in  a  port  of] 
which  the  local  law  divides  the  whole  loss,  (therein  opposing  the ' 
general  maritime  law,)  the  insurers  of  a  vessel  the  owners  ofl 
which,  by  this  law,  were  made  to  pay  a  large  sum,  were  liable | 
for  it.     But  this  case  was  exactly  opposed  to  a  cotemporary  de- 
cision in  the  Court  of  Queen's   Bench  in  England  ;3   and  itsj 
aufthority  has  certainly  been  shaken  by  the  recent  decision  of  the 
Supreme  Court  of  the  United  States. 
* 

SECTION   XVI. 

OF    FIRE. 

This  peril  also  must  come  under  the  common  rule,  and  the  in-] 
surers  will  not  be  held,  unless  it  be  caused  by  something  extra- 
ordinary, and  not  belonging  to  the  inherent  qualities  of  the  thing] 
which  takes  fire.* 

The  master  and  crew  may  burn  a  ship  and  cargo,  to  prevent! 
their  capture  by  an  enemy;  for  this  is  their  duty  to  the  State  ;^ 
and,  therefore,  it  would  seem  that  the  insurers  would  be  liable! 
for  such  a  destruction  by  fire,  although  their  policy  expressly! 
exempted  them  from  liability  for  loss  by  capture,  or  by  war  risks  j 
generally. 

The  insurers  would  be  held  also  for  any  direct  and  immediate^ 
consequences  of  the  fire ;  and  for  loss  caused  by  the  endeavor  to 
extinguish  it;  and,  perhaps,  for  all  that  arose  from,  or  was  due] 
to,  honest  and  reasonable  efforts  to  prevent  it.^  It  is,  indeed,  a 
general  rule,  that  the  insurers  are  liable  for  the  loss  or  injury 
which  is  the  natural,  direct,  and  proximate  effect  of  any  peril  in- 
sured against,  although  the  loss  may  be  the  immediate  effect  of 

1  Peters  v.  Warren  Ins.  Co.  14  Pet.  99. 

2  Peters  v.  Warren  Ins.  Co.  3  Sumn.  389. 

3  De  Vaux  v.  Salvador,  4  Ad.  &  El.  420. 
*  See  ante,  p.  442,  n.  1. 

5  Gordon  v.  Rimmington,  1  Campb.  123;   Pothier,  h.  t.  n.  53  ;  2  Valiu,  75  ;  Emeri- 
gon,  Tome  1,  434. 
s  See  post,  section  on  General  Averaj^e. 


en.  XVIII.]  OF   ftURINE  INSURANCE.  447 

a  preceding  loss;  as,  if  a  part  of  the  cargo  was  burned  up,  and 
another  part  injured  by  water  used  to  arrest  the  fire.^ 


SECTION  XVII. 

OF   PIRACY,   ROBBERY   OR   THEFT. 

There  can  be  no  piracy  or  robbery,  without  violence ;  but  this 
is  not  necessary  to  constitute  the  crime  of  theft.^  Piracy  and 
robbery  are  most  usually  committed  by  strangers  to  the  ship ; 
they  may,  however,  be  committed  by  the  crew ;  and  the  insurers 
are  answerable  for  such  a  loss,  unless  it  arose  from  the  fault  of 
the  owner.3  If  theft  be  committed  by  the  crew,  we  should  still 
hold  the  insurers  liable.*  This  may  be  doubtful;  but  insurers 
regard  it  as  at  least  possible,  and  provide  against  it  by  the  phrase, 
"  assailing  thieves."  This  excludes  theft  without  violence,  and, 
perhaps,  all  theft  by  those  lawfully  on  board  the  vessel,  as  a 

'  1  Case  V.  Hartford  Ins.  Co.  13  HI.  680.  In  this  case,  Turnhull,  J.,  says :  "  Surely, 
an  injury  to  the  goods  by  water  thrown  to  extinguish  a  fire,  would  not  be  an  injury  to 
the  goods  by  actual  ignition,  and  yet,  no  case  can  be  found  where  an  insurance  against 
damage  by  fire  has  been  held  not  to  extend  to  such  a  case."  See  also  Hillier  v. 
Allegheny  Co.  Mut.  Ins.  Co.  3  Barr.  470,  per  Grier,  J. 

2  It  is  laid  down,  by  Chancellor  Kent,  (3  Com.  303,)  that  theft  means  that  which  is 
accompanied  with  violence,  and  not  simple  theft.  On  this  authority,  the  case  of 
Marshall  v.  Xashville  M.  &  ¥.  Ins.  Co.  1  Humph.  99,  was  decided.  In  New  York, 
however,  after  most  elaborate  arguments,  it  was  held,  both  by  the  Supreme  Court  .and 
the  Court  of  Errors,  that  the  word  theft  did  not  mean  a  stealing  by  violence  necessarily, 
but  would  also  include  a  simple  larceny.  Am.  Ins.  Co.  v.  Bry;in,  1  Hill,  25  ;  S.  C. 
26  Wend.  563.  In  this  case,  the  goods  had  been  stolen  while  on  the  voyage,  but  it 
could  not  be  sliown  by  whom,  whether  by  a  passenger,  or  by  one  of  the  crew.  The 
insurers  were  held  liiible.     See  also  The  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  Ch.  285. 

3  Brown  r.  Smith,  1  Dow,  349.  In  Nayler  v.  Palmer,  22  Eng.  L.  &  Eq.  573  ;  S.  C. 
8  Exch.  739,  insurance  was  effected  on  adv.ances  for  the  outfits,  provisions,  &c.,  of 
coolies,  to  be  repaid  upon  the  safe  delivery  of  the  emigrants  at  the  port  of  destination 
in  Peru.  The  insurance  was  against  pir.ates,  thieves,  and  all  other  the  usual  perils.  On 
the  voyage,  the  coolies  rose  irpon  the  crew,  murdered  part  of  them  and  the  captain, 
took  the  ship,  and  sailed  for  land ;  on  reaching  which  they  left  the  ship  and  escaped. 
Pollock,  C.  B.,  says :  "  The  act  of  seizure  of  the  ship,  and  taking  it  out  of  the  possession 
of  the  master  and  crew,  by  the  passengers,  was  cither  an  act  of  piracy  and  theft,  and  so 
within  the  express  words  of  the  policy,  or,  if  not  of  that  quality,  because  it  was  not  done 
animo  furamli,  it  was  a  seizure  ejusdem  generis,  analogous  to  it,  or  to  barratry  of  the 
crew,  falling  within  the  general  concluding  words  of  the  perils  enumerated  by  the 
policy."  The  plea  averred  th-at  the  loss  occurred  through  the  refusal  of  the  coolies  to 
return  to  the  sliip  after  tliey  landed,  and  not  by  reason  of  the  seizure  ;  but  the  court 
say :  "  The  running  away  with  the  ship  was  as  much  the  cause  of  the  loss  as  if  the  ship 
had  been  seized  and  taken  out  of  the  possession  of  the  crew  by  strangers,  and  then 
abandoned,  and  the  cargo  had  consisted  of  wild  animals,  who  had  escaped  or  been  let 
loose  by  them  whilst  they  were  in  possession,  and  could  not  be  caught  again  after  the 
captors"  abandoned  the  possession."  This  case  was  afiirmed,  on  appeal,  in  the  Ex- 
chequer Chamber,  26  Eng.  L.  &  Eq.  455. 

*  See  supra,  n.  2. 


448  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XVIII. 

part  of  the  ship's  company.^  If,  after  shipwreck,  the  property  is 
stolen,  the  insurers  are  liable,  and  would  probably  be  so  if  there 
were  no  insurance  against  theft,  if  this  was  a  direct  effect  of  the 
wrecking.^  # 


SECTION  XVIII. 

OF    BARRATKY. 

This  word  has  given  rise  to  much  discussion,  and  its  meaning 
may  not  be  now  positively  determined.  We  understand  by  it, 
however,  any  wrongful  act  of  the  master,  officers,  or  crew,  done 
by  them,  or  either  of  them,  against  the  owner.^  If  he  directed 
the  act,  or  consented  to  it,  or  by  his  negligence  or  default  caused 
it, — whether  actual  owner,  or  quasi  owner,  by  hiring  the  vessel, — 
it  is  no  barratry.^  But  it  is  not  necessary  that  it  should  be  done 
with  an  intention  hostile  to  him.  For  an  act  otherwise  barra- 
trous, would  be  none  the  less  so  because  the  committer  of  it  sup- 
posed it  would  be  for  the  advantage  of  the  owner.  So,  too,  the 
voluntary  and  unnecessary  encounter  of  any  extraordinary  peril, 
although  done  from  a  belief  that  it  would  be  advantageous  to 
the  owner,  would  be  a  barratrous  act ;  ^  and  of  course  it  would 
be  if  done  by  the  master  for  his  own  benefit.^  Mere  negligence, 
if  gross  and  extreme,  may  be  barratrous,  even  if  there  be  no  pur- 

1  See  1  Phillips  on  Ins.  §  1106. 

2  In  Magoun  v.  New  Eng.  Mar.  Ins.  Co.  1  Story,  157,  164,  Mr.  Justice  Story  says  : 
"All  the  consequences  naturally  flowing  from  the  peril  insured  against,  or  incident 
thereto,  arc  properly  attributable  to  the  peril  itself.  If  there  be  a  capture,  and,  before 
the  vessel  is  delivered  from  that  peril,  she  is  afterwards  lost  by  fire,  or  accident,  or 
negligence  of  the  captors,  I  take  it  to  be  clear  that  the  whole  loss  is  properly  attribut- 
able to  the  capture."  See  also  Pothier  on  Ins.  n.  55  ;  Bondrett  v.  Hentigg,  Holt,  N.  P. 
149. 

**  Considerable  discussion  has  arisen  in  regard  to  the  meaning  of  this  word.  In 
nearly  all  the  early  cases,  it  is  defined  to  be  a  fraud,  cheat,  or  trick  on  the  part  of  the 
captain.  In  The  Patapsco  Ins.  Co.  v.  Coulter,  3  Peters,  222,  the  whole  subject  is  ably 
reviewed  by  Mr.  Justice  Johnson,  and  the  cases,  which  say  that  the  act  must  be  a  fraud- 
ulent one,  are  shown  to  l)e  inconsistent  with  the  language  used  in  them.  Thus,  as  said 
in  the  text,  gross  negligence  will  be  held  to  be  barratry,  and  a  mere  nonfeasance  by 
the  captain  of  the  duty  enjoined  upon  him  v/ill  be  a  barratrous  act,  in  some  cases.  See, 
however,  Wiggin  v.  Amory,  14  Mass.  1  :  Stone  v.  National  Ins.  Co.  19  Pick.  34; 
Lockyer  v.  OtHey,  1  Term,  259;  Vallejo  v.  Wheeler,  Cowp.  143  ;  Wilcocks  v.  Un.  Ins. 
Co.  2  Binney,  574 ;  Phyn  v.  Eoy,  Exch.  Ass.  Co.  7  Term,  505. 

*  Pipon  V.  Cope,  1  Camp.  434 ;  Nutt  v.  Bourdieu,  1  Term,  323,  330,  per  Lord  Mans- 
field, C.  J. ;  Vallejo  v.  Wheeler,  Cowp.  155 ;  Scares  v.  Thornton,  7  Taunt.  627. 

5  In  Earle  v.  Rowcroft,  8  East,  126,  the  master  had  general  instructions  to  make  the 
best  purchases  with  despatch.  It  was  held  that  this  would  not  justify  his  trading  with 
the  enemy,  and  that  such  an  act  would  be  barratry. 

«  Vallejo  V.  Wheeler,  Cowp.  143;  Ross  v.  Hunter,  4  Term,  33. 


en.  XVIII.]  OF  MARINE  INSURANCE.  449 

pose  of  helping  or  of  hurting  any  one.^  And,  indeed,  mere  nonfea- 
sance, or  the  not  doing  of  an  act,  may  be  barratrous,  if  thereby 
an  injury  was  sustained,  which  might  have  been  prevented  by  a 
proper  and  reasonable  resistance,  and  therefore  should  have  been 
so  prevented.^ 

It  must  be  an  act  against  the  owners.  Therefore,  if  the  mas- 
ter be  a  part-owner,  he  cannot  commit  barratry .^  Nor  will  any 
act  of  a  master  be  barratrous,  which  is  done  by  him  as  super- 
cargo, consignee,  or  factor,  or  in  any  capacity  or  function  what- 
ever, other  than  that  of  master.* 

Not  only  is  a  quasi  owner's  consent  to  an  act  destructive  of  its 
barratrous  character,  but  his  consent  will  have  this  effect,  and  the 
legal  owner's  will  not.  Thus,  if  there  be  a  quasi  owner,  as  a 
charterer  who  loads  and  sails  her,  the  master,  however,  being 
appointed  by  the  actual  owner, — if  this  master  commits  an  act  of 
barratry,  its  character  is  not  taken  away  by  the  fact  that  he  did 
it  with  the  consent,  or  by  the  order  of  the  actual  or  legal  owner.  ^ 

The  master  being  appointed  by  the  owner,  and  controlled  by 
him,  many  policies  provide  that  they  do  not  insure  against  bar- 
ratry, if  the  insured  be  the  owner  of  the  ship.     The  purpose  of 

1  In  the  case  of  Ileyman  v.  Parish,  2  Camp.  149,  the  captain  sailed  contrary  to  the 
directions  of  the  pilot,  and  the  ship  having  been  stopped  by  getting  out  an  anchor,  the 
captain  cut  the  cable,  and  let  her  drift  on  a  rock.  Park,  for  the  defendant,  suggested 
that  there  did  not  appear  to  be  any  fraud.  Lord  EUenhorough  said  :  "  This  is  not  nec- 
essary. It  has  been  solemnly  decided,  that  a  gross  malversation  by  the  captain  in  his 
ofSce,  is  barratrous."  See  also  Richardson  v.  Maine  Ins.  Co.  6  Mass.  117,  121  ;  Gold- 
schmidt  v.  Whitmore,  3  Taunt.  508. 

2  In  The  Patapsco  Ins.  Co.  v.  Coulter,  3  Peters,  234,  Mr.  Justice  Johnson  says : 
"  And,  certainly,  a  master  of  a  vessel  who  sees  another  engaged  in  the  act  of  scuttling 
or  firing  his  ship,  and  will  not  rise  from  his  berth  to  prevent  it,  is  prima  facie  chargeable 
with  barratry.  Although  a  mere  misfeasance,  it  is  a  breach  of  trust,  a  fault,  an  act  of 
infidelity  to  his  owners."      See  n.  3,  p.  447. 

3  Marcardier  v.  Chesapeake  Ins.  Co.  8  Cranch,  39  ;  Taggard  ?;.  Loring,  16  Mass.  336; 
Cook  V.  Ins.  Co.  11  Johns.  40.  In  Jones  v.  Nicholson,  26  Eng.  L.  &.  Eq.  542,  it  was 
held,  that  though  an  owner  could  not  commit  barratry,  yet  a  part-owner  could. 

*  Emerigou,  Meredith's  ed.  p.  296.  The  act,  however,  if  done  by  the  master  in  his 
capacity  of  master,  although  he  may  fill  other  offices,  will  be  barratry. 

5  Vailejo  I'.  Wheeler,  Cowp.  143;  S.  C.  Lofft,  631  ;  and  in  a  note  to  1  Johns.  234. 
See  also  Boutflower  t;.  Wilmer,  2  Selw.  N.  P.  II th  ed.  969.  The  question  which 
most  frequently  arises,  in  such  cases,  is,  who  is  the  owner  for  the  voyage.  It  was  held 
in  England,  in  Hutton  v.  Bragg,  7  Taunt.  14,  that  if  the  charter-party  contained  words 
of  demise,  the  possession  of  the  vessel  passed  thereby  to  the  charterers,  though  there 
were  words  repugnant  to  this  construction  in  other  parts  of  the  instrument.  This  case 
has  been  overruled  in  England,  in  Christie  v.  Lewis,  2  Brod.  &  Bing.  410,  where  it  was 
held  that  the  whole  contract  must  be  taken  together.  In  this  country,  Hutton  v.  Bragg, 
has  nowhere  been  followed.  The  law  is  stated  with  great  accuracy  in  Marcardier  v. 
The  Chesapeake  Ins.  Co.  8  Cranch,  49,  "where  the  general  owner  retains  the  posses- 
sion, command,  and  navigation,  and  contracts  to  carry  the  goods  on  freight,  the  charter- 
party  is  a  mere  aff'reightment  sounding  in  covenant."  Sec  also  MTntire  v.  Browne,  1 
Johns.  229.     See  ante^  chapter  on  Shipping,  p.  359,  n.  2.  ^ 

38* 


450 


ELEMENTS    OF   MERCANTILE   LAW. 


[cn.  XVIII. 


this  is  obvious  ;  it  is  to  prevent  an  insurance  of  the  owner  against 
the  acts  of  one  for  whom  he  ought  to  hold  himself  responsible. 
The  effect  of  the  clause  is,  generally,  to  limit  the  insurance 
against  barratry,  to  goods  shipped  by  one  who  is  not  owner  of 
the  vessel.  Still,  if  a  charterer  who  filled  the  ship  he  hired  with 
his  own  goods  and  those  of  others,  insured  his  freight  —  meaning 
the  excess  of  what  he  w^ould  earn  over  what  he  must  pay  —  the 
insurance  against  barratry  would  not  be  prevented  by  this  clause 
from  extending  to  him,  because  he  is  not  the  owner  of  the 
ship. 

As  a  general  rule,  the  insurers  are  liable  for  the  misconduct  of 
the  crew,  when  all  usual  and  reasonable  precautions  have  been 
taken  by  the  owner,  and  his  servant,  the  master,  to  prevent  such 
misconduct.' 


SECTION  XIX. 

OF  CAPTURE,  ARREST,  AND  DETENTION. 

The  phrase  which  refers  to  these  perils,  is  usually  in  these 
words :  "  Against  all  captures  at  sea,  or  arrests,  or  detentions  of 
all  kings,  princes,  and  people."  Almost  every  word  of  this  sentence 
has  been  the  subject  of  litigation  or  of  discussion.  The  provis- 
ion has  been  held  to  apply  not  only  to  captures,  arrests,  or  deten- 
tions by  public  enemies,  by  foreign  belligerent  powers,^  but  to 
those  by  the  very  government  of  which  the  insured  is  himself  a 
subject,  unless  the  same  be  for  a  breach  of  the  law  by  the  in- 
sured.^ By  the  "  people  "  are  understood  the  sovereign  power  of 
a  State,  whatever  be  its  form 'of  government.^  "  Capture"  and 
"  seizure  "  are  equivalent — they  differ  from  "  detention  "  in  this 
respect;  the  two  former  words  mean  a  taking  with  intent  to 


1  Supra,  p.  442,  n.  2. 

2  Rhinelander  r.  The  Ins.  Co.  of  Penn.  4  Cranch,  29. 

3  Green  v.  Young,  2  Salk.  444;  S.  C.  2  Ld.  Rayra.  840;  Odlin  v.  Ins.  Co.  of  Penn. 
2  "Wash.  C.  C.  312 ;  Lorent  v.  S.  Car.  Ins.  Co.  1  Nott  &  McCord,  .505 ;  M'Bride  v.  Mar. 
Ins.  Co.  5  Johns.  299  ;  Olivera  v.  Un.  Ins.  Co.  3  Wheat.  183  ;  Rotch  v.  Edie,  6  Term, 
413;  Offdent;.  N.  Y.  E.  Ins.  Co.  10  Johns.  177. 

*  In  Nesbitt  v.  Lusliington,  4  Term,  783,  787,  Lord  Kenyan  says  :  "  The  meaning  of 
the  word  "people"  may  be  discovered  here,  by  the  accompanying  words :  noscitur  a 
sociis — it  means 'the  ruling  power  of  the  country.'"  Mr.  Justice  Buller  says:  "It 
means  '  the  supreme  power ; '  '  the  power  of  the  country,'  whatever  it  may  be." 


en.  XVIII.]  OF   JIARINE   INSITRANCE.  451 

keep ;  the  latter,  a  taking  with  intent  to  restore  the  property.^ 
"  Arrest,"  is  any  taking  possession  of  the  property  for  any  hostile 
or  judicial  purpose.^ 


SECTION  XX. 

OF    THE   GENERAL   CLAUSE. 

This  clause  has  a  very  limited  operation.  We  have  already 
remarked,  that  it  is  usually  restricted  to  perils  of  a  like  kind  with 
those  already  enumerated;  and  although  this  phrase  has  been 
declared  to  be  substantial  and  material,^  it  might  be  difFicult  to 
hold  an  insurer  liable  on  tenable  grounds,  under  this  clause,  when 
he  would  not  have  been  liable  under  any  of  the  enumerated 
perils.^  Another  phrase  sometimes  used,  "  against  all  risks,"  has 
been  construed  very  widely,  and  as  if  it  included  every  cause  of 
loss,  except  the  fraud  of  th.e  insured.^  If  it  stood  by  itself,  it 
might  be  difficult  to  define  it ;  but  if  it  followed  the  usual  enu- 
meration, we  should  say  that  it  should  be  limited  by  them  in  its 
significance  and  operation.^ 

■>  Emerigon,  c.  xii.,  §  xxx.,  p.  420,  Meredith's  ed. 

~  Lord  Ellenborough  hold,  in  Carruthers  v.  Gray,  3  Camp.  142,  that  an  averment  stat- 
ing that  a  ship  and  goods  were  arrested  by  the  powers  of  government  at  a  certain 
place,  and  the  goods  were  there  detained  and  confiscated,  was  supported  by  proof  that 
the  goods  were  forcibly  taken  possession  of  by  the  officers  of  government.  In  ( )livera 
V.  The  Union  Ins.  Co.  .3  Wheat.  183,  Mr.  Chief  Justice  Marshall,  spealving  of  arrest 
and  detainment,  says:  '-Each  of  these  terms  implies  possession  of  the  thing,  by  the 
power  which  arrests  or  detains."  He  accordingly  held  that  a  blockade  could  not  be 
either  of  these,  because  the  vessel  remained  in  the  possession  of  the  master, — but  that 
it  would  be  a  restraint. 

^  In  Cullen  v.  Butler,  5  M.  &  S.  4G1,  Lord  EUenhorovgh,  speaking  of  the  words  in  the 
general  clause,  says  :  "  They  are  entitled  to  be  considered  as  material  and  operative 
words,  and  to  have  their  due  effect  assigned  to  them  in  the  construction  of  this  instru- 
ment." 

*  Moses  V.  The  Sun  Mut.  Ins.  Co.  1  Duer,  159.  It  was  held  in  this  case,  that  the 
general  clause  covered  only  losses  of  a  similar  nature  to  those  specifically  described, 
and  that  it  would  not  therefore  cover  a  loss  resulting  from  the  consumption  of  cargo 
hy  the  crew  or  passengers,  or  from  a  sale  of  it  to  defray  the  necessary  expenses  of  re- 
pairing the  vessel.     See  also  cases  cited  ante,  note  226. 

^  In  Goix  V.  Knox,  1  Johns.  Cas.  337,  the  court  said:  "This  expression  is  vague 
and  indefinite,  but  if  we  allow  it  any  force,  it  must  be  considered  as  erecting  a  special 
insurance,  and  extending  to  other  risks  than  are  usually  contemplated.  We  are  in- 
clined to  apply  it  to  all  losses,  except  such  as  arise  from  the  fraud  of  the  assured."  See 
also  Skidmore  v.  Desdoity,  2  Johns.  Cas.  77. 

^  The  maxim  noscitw  a  sociis  would  seem  to  apply  as  well  here,  as  in  Nesbitt  v. 
Lushington,  4  Term,  783,  787,  where  it  was  held  that  the  word  "  people,"  was  to  be 
taken  in  connection  with  the  context,  and  it  was  accordingly  construed  to  mean  the 
sovereign  power  of  the  State.    See  also  cases  cited  ante,  p.  440,  u.  3. 


452  ELEMENTS   OF  MERCANTILE   LAW.  [cn.  XVIII. 


SECTION  XXL 

OF   PROHIBITED   TRADE. 

This  is  not  the  same  with  contraband  trade,  although  the 
words  are  sometimes  used  as  if  they  were  synonymous.  It  is 
perfectly  lawful  for  a  ship  to  break  through  a  blockade  if  it  can, 
or  to  carry  arms  or  munitions  of  war  to  a  belligerent.  But  then 
it  is  perfectly  lawful  for  the  State  whose  enemy  is  thus  aided,  to 
catch,  seize,  and  condemn  the  vessel  that  does  this,  if  it  can.  The 
vessel  takes  upon  itself  this  risk ;  and  we  have  seen  that  it  is  not 
covered  by  a  common  policy,  unless  the  purpose  is  disclosed  and 
permitted.^  Prohibited  trade  belongs  to  a  time  of  peace.  It  is 
either  trade  prohibited  by  the  State  to  which  the  ship  belongs, — 
and  then  it  is  wholly  illegal, — and  the  insurers  are  not  only  not 
answerable  under  a  general  policy  for  a  loss  occasioned  by  this 
breach  of  law,  but  an  express  bargain  to  that  effect  would  itself 
be  illegal  and  void ;  ^  or  it  may  be  trade  prohibited  only  by  a 
foreign  State.  And  then  it  is  not  an  illegal  act  in  the  vessel  by 
whose  sovereign  it  is  not  prohibited.  On  general  principles, 
we  should  say,  that  the  intention  to  incur  this  risk  should  be 
communicated.-^  But  in  practice,  our  policies  generally,  if  not 
universally,  except  expressly  the  risks  arising  from  prohibited 
trade. 

If  there  has  actually  been  such  a  trade,  and  a  seizure,  forfeit- 
ure, and  condemnation  because  of  it,  the  insurers  are  certainly 
discharged  by  the  operation  of  this  exception.* 

If  there  has  been  an  attempt  at  such  a  trade,  which  was  not 
carried  into  effect,  but  the  vessel  was  seized  and  condemned 


1  See  ante,  p.  417,  n.  6. 

2  The  United  States  v.  The  Paul  Shearman,  1  Peters,  C.  C.  98 ;  Delmada  v.  Mot- 
teux.  Park  on  Ins.  505,544;  Kussell  i>.  Degrand,  15  Mass.  35 ;  Kichardson  r.  The 
Maine  Ins.  Co.  6  Mass.  102. 

3  In  Archibald  v.  Mercantile  Ins.  Co.  3  Pick.  70,  the  court  say :  "  The  law  is  clearly 
settled,  that  an  insurance  does  not  cover  an  illegal  voyage,  unless  by  the  terms  of  the 
contract  the  intention  to  do  so  is  expressed,  or  unless  tlie  voyage  insured  is  known  to 
the  assurer  to  be  illegal  at  the  time  when  he  makes  the  contract."  In  this  case,  the 
risk  was  a  prohibited  one.  See  also  Andrews  v.  The  Essex  P.  &  M.  Ins.  Co.  3  Mason, 
6;  Richardson  v.  The  Maine  Ins.  Co.  6  Mass.  102  ;  Livingston  v.  The  Maryland  Ins. 
Co.  7  Cranch,  506  ;  Pollock  v.  Babcock,  6  Mass.  234. 

*  See  cases  cited  in  note  above. 


CH.  XVIII.]  OF   MARINE  INSURANCE.  453 

therefor,  according  to  the  laws  of  the  country  where  the  attempt 
was  made,  here,  also,  we  should  say,  that  the  insurers  were  dis- 
charged.' 

If,  however,  the  seizure  and  condemnation  were  for  an  alleged 
trade,  or  attempt  to  trade,  but  there  was  no  justification  for  the 
same,  in  fact,  the  vessel  being  wholly  innocent,  such  a  loss  as 
this  would  not  come  under  the  exception,  and  the  insurers  would 
be  liable.^ 

If  there  be  such  a  trade,  or  attempt  thereto,  and  no  seizure  or 
condemnation,  the  insurers  are  not  discharged  from  their  liability 
for  an  independent  loss,  by  this  exception.^ 

The  parties  may  always  agree  to  add  such  risks  or  except  such 
as  they  choose*  And  sometimes  an  excepted  risk  and  one  in- 
sured against  are  mingled.  If,  for  example,  all  war  risks  and  all 
captures  are  excepted,  and  a  vessel  is  stranded  upon  a  foreign 
and  hostile  shore,  and  captured  there  and  condemned,  are  the  in- 
surers liable  ?  Yes,  if  the  vessel  would  have  been  lost  by  the 
stranding ;  but  not,  if  so  far  as  this  peril  went,  the  owners  would 
have  recovered  her.^ 


1  But  if  at  the  time  of  the  seizure,  the  port  to  which  the  vessel  was  going  had  ceased 
to  be  hostile,  or  another  port  Imd  been  substituted  for  it,  then  the  capture  is  invalid. 
The  Abby,  5  Rob.  251 ;  The  Imina,  3  Rob.  167  ;  The  Trende  Sostre,  6  Rob.  390,  n. 

2  Sawyer  v.  The  Maine  F.  &  M.  Ins.  Co.  12  Mass.  291. 

^  In  Richardson  v.  IMaine  Ins.  Co.  6  Mass.  112,  Parsons,  C.  J.,  says:  "And  if  the 
assurer  will  expressly  insure  against  seizure  for  illicit  trade,  or  with  a  full  knowledge 
of  the  nature  of  the  voyage,  he  will  insure  it  without  making  any  exception,  he  will  be 
bound  to  indemnify  the  assured  for  the  losses  arising  from  the  breaches  of  the  trade- 
laws  of  the  foreign  State.  But  although  he  may  not  take  upon  himself  these  losses, 
and  thus  be  irresponsible  for  them,  yet  he  is  answerable  for  any  other  losses  insured 
against,  because  the  policy  is  not  void." 

*  "  It  is  a  maxim  as  old  as  our  law,  conventio  vincit  legem.  The  parties  may,  if  they 
please,  introduce  into  their  contract  an  article  to  prevent  the  application  of  a  general 
rule  of  law  to  it."     Per  Lord  Kenijon,  C.  J.,  in  Walker  v.  Birch,  6  Term,  2G2. 

^  The  case  of  Livie  v.  Janson,  12  East,  648,  where  a  ship  insured,  warranted  free 
from  American  condemnation,  was  driven  on  shore  by  perils  insured  against,  and  after- 
wards captured,  proceeds  upon  this  distinction.  Lord  Ellenhorough,  in  giving  the  opin- 
ion of  the  court,  states  this  case  :  "  If,  for  instance,  a  ship  meet  with  sea  damage,  which 
checks  her  rate  of  sailing,  so  that  she  is  taken  by  an  enemy,  from  whom  she  would 
otherwise  have  escaped,  though  she  would  have  arrived  safe  but  for  the  sea  damage, 
the  loss  is  to  be  ascribed  to  the  capture  and  not  to  the  sea  damage."  This  case  is  said 
by  an  eminent  writer  on  Insurance,  to  be  "  surely  wrong  " — (see  1  Phillips  on  Ins. 
§  1136) — but  it  appears  to  us  to  come  clearly  within  the  rule  laid  down  in  the  text.  If 
the  decision  is  wrong,  it  is  not  a  mistake  of  law,  but  one  of  fact,  as  is  said  by  Best,  C. 
J.,  in  Hahn  v.  Corbett,  2  Bing.  205,  because  the  facts  would  have  warranted  the  court 
in  finding  that  the  stranding  produced  a  total  loss  independently  of  the  seizure.  In  the 
case  of  Rice  v.  Homer,  12  Mass.  230,  the  ship  was  damaged  to  the  amount  of  three 
fourths  of  her  value,  but  as  she  existed  in  specie,  there  could  not  be  a  total  loss  before 
an  abandonment  should  be  made  ;  and,  consequently,  as  there  was  no  total  loss  before 
seizure,  the  capture  was  held  to  be  the  cause.  See  also  Green  v.  Elmslie,  Peake, 
212. 


454  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XVIII. 


SECTION  xxn. 

OF   DEVIATION. 

As  the  insurers  must  know,  either  from  information  given 
them  or  from  the  known  course  of  trade,  what  risks  they  as- 
sume, it  is  obvious  that  the  insured  have  no  right  to  change  those 
risks,  and  that  if  they  do,  the  insurers  are  not  held  to  the  new 
risk.  Such  a  change  of  risk  is  called  a  deviation ;  it  certainly  dis- 
charges the  insurers ;  and  although  the  word  originally  meant 
in  law  what  it  means  commonly,  a  departure  from  the  proper 
course  of  the  voyage,  it  now  means,  in  the  law  of  insurance, 
any  departure  from,  or  change  of  the  risks  insured  against.  And 
it  discharges  the  insurers,  although  it  does  not  increase  the  risk, 
as  they  have  a  right  to  stand  by  the  bargain  they  have  made.'' 
There  may  be  a  deviation  while  the  ship  is  in  port ;  ^  or  where 
the  insurance  is  on  time,  and  no  voyage  is  indicated.^  And  a 
very  slight  deviation  may  suffice  to  discharge  the  underwriters.* 

But  no  deviation  discharges  the  insurers,  or,  in  the  language 
of  the  law,  no  change  of  risk  is  a  deviation,  unless  it  be  volun- 
tary— that  is,  unless  it  be  made  without  sufficient  necessity.^ 
Nor  is  this  necessity  determinable  altogether  by  the  event ;  for 
it  must  be  judged  of  by  the  circumstances  as  they  existed  at  the 
time,  and  entered  into,  or  ought  to  have  entered  into  considera- 
tion.6 

If  a  deviation  is  only  temporary,  it  only  suspends  the  liability 


1  Maryl.  Ins.  Co.  V.  Le  Roy,  7  Cranch,  26.  In  this  case,  Mr.  Justice  Jo/insow  says: 
"  The  discharge  of  the  underwriters  from  their  liability,  in  such  cases,  depends,  not 
ixpou  any  supposed  inci-ease  of  risk,  but  wholly  on  the  departure  of  the  insured  from 
the  contract  of  insurance." 

-  Palmer  v.  Marshall,  8  Bing.  79.  In  this  case,  the  risk  commenced  "at"  the  port 
of  departure.  It  was  held  that  an  inexcusable  delay  to  sail  would  be  a  deviation.  See 
also  Palmer  w.  Penning,  9  Bing.  4G0;  Earl  v.  Shaw,  1  Johns.  Cas.  313;  Seamans  i'. 
Loring,  1  Mason,  127  ;  Grant  v.  King,  4  Esp.  175,  per  Loi'd  Ellenhorongh. 

^ V.  "Westmore,  6  Esp.  109 ;  Bell  v.  Western  E.  &  M.  Ins.  Co.  5  Rob.  La. 

423. 

*  Maryland  Ins.  Co.  v.  Le  Roy,  7  Cranch,  26.  See  also  cases  joassim. 

^  Thus  it  is  allowable  to  go  out  of  the  course  to  avoid  capture.  Oliver  v.  Maryl.  Ins. 
Co.  7  Cranch,  487  ;  and  to  avoid  ice — Graham  v.  Com.  Ins.  Co.  1 1  Johns.  352.  See 
also  Vallejo  v.  Wheeler,  Cowp.  143;  Green  v.  Elmslic,  Peake,  212;  Robinson  v.  Mar. 
Ins.  Co.  2  Johns.  89  ;  Lee  v.  Gray,  7  Mass.  349. 

"  Byrne  v.  Louisiana  State  Ins.  Co.  19  Martin,  (7  N.  S.)  Louis.  128  ;  Gazzam  v.  Ohio 
Ins.  Co.  Wright's  Ohio  Rep.  202  ;  Toulmin  v.  Inglis,  1  Camp.  421. 


CH.   XVIII.]  OF  MARINE  INSURANCE.  455 

of  the  insurers.  But  it  is  not  temporary,  unless  after  its  termina- 
tion all  other  risks  are  precisely  what  they  would  have  been  if 
there  had  been  no  deviation.'  And  this  is  true  of  very  few  de- 
viations indeed,  and  certainly  not  of  any  change  of  course ;  for 
the  ship  will  not  be  again  in  the  same  place,  and  subject  to  the 
sai#e  winds  and  waves,  as  she  would  otherwise  have  been.^ 

The  proper  course — a  departure  from  which  is  a  deviation — is 
always  the  usual  course,  provided  there  be  a  usage;  for  a  master 
is  not  bound  to  follow  their  track,  wherever  one  or  two  have  gone 
before,  but  must  be  allowed  his  own  reasonable  discretion.^  If 
there  be  no  course  so  well  established  that  every  one  would  be 
expected  to  follow  it,  the  master  must  go  to  his  destined  port  in 
the  most  natural,  direct,  safe,  and  advantageous  way.  And  a 
mere  mistake  on  this  point  does  not  constitute  a  deviation.  A 
deviation  from  one  course  marked  out  by  established  usage,  is 
not,  however,  excused  by  a  mistake.*  And  if  a  master,  where 
there  is  no  controlling  usage,  has  made  up  his  mind  that  a  certain 
course  is  the  best  and  proper  course,  and  takes  another,  whether 
from  some  motive  of  his  own  or  by  the  order  of  his  owner,  this 
is  a  deviation.  The  insurers  have  a  right  to  the  master's  best 
discretion,  and  to  his  following  it.^ 

An  extraordinary  and  unnecessary  protraction  of  a  voyage 
would  be  a  deviation.  But  the  mere  length  of  the  voyage,  with- 
out other  evidence,  would  not  prove  this.*^ 

Liberty  policies,  so  called,  are  often  made.  That  is,  the  insured 
is  expressly  permitted  to  do  certain  things,  which,  without  such 
permission,  would  constitute  a  deviation.  And  a  large  propor- 
tion of  the  cases  on  the  subject  of  deviation,  has  arisen  under 

1  See  1  Phillips,  §§  975,  989. 

2  Coffin  V.  Newburyport  Mar.  Ins.  Co.  9  Mass.  436,  449.  Mr.  Justice  Sedgivick,  in 
delivering  the  opinion  of  the  court,  in  this  case,  says  :  "  Now  it  is  undoubtedly  true, 
that  the  shortness  of  the  time,  or  the  distance  of  a  deviation,  makes  no  difference  as 
to  its  effect  on  the  contract — whether  for  one  hour  or  one  month,  or  for  one  mile  or 
one  himdred  miles,  the  consequence  is  the  same.  If  it  be  voluntary,  and  without 
necessity,  it  puts  an  end  to  the  contract." 

3  Martin  v.  Del.  Ins.  Co.  2  Wash.  C.  C.  254. 

*  Phyn  V.  The  Royal  Exch.  Ass.  Co.  7  Term,  505.  This  follows  as  a  natural  sequence 
of  the  rule  above  laid  down,  that  the  usual  course,  if  there  be  one,  is  to  be  followed, 
and  if  this  is  not  done,  the  risk  is  a  different  one  from  that  concerning  which  the  con- 
tract was  made,  and  consequently  the  insurers  will  be  discharged.  See  Maryland  Ins. 
Co.  V.  Le  Koy,  7  Cranch,  26. 

&  Middlewood  v.  Blakes,  7  Term,  162;  Vallejo  v.  Wheeler,  Cowp.  143;  Eoss  v. 
Hunter,  4  Term,  33. 

•^  Syers  v.  Bridge,  Doug.  529;  Columbian  Ins.  Co.  v.  Catlett,  12  Wheat.  383;  Smith 
V.  Surridge,  4  Esp.  25  ;  Suydani  v.  Marine  Ins.  Co.  2  Johns.  138,  143. 


456  ELEMENTS   OF    MEKCANTILE   LAW.  [CH.  XVIII. 

these  policies.  Most  of  the  phrases  commonly  used  have  been 
construed  by  the  courts ;  and  generally  quite  strictly.  A  liberty 
to  "  enter  "  a  port,  or  "  touch  "  at  a  place,  permits  a  ship  to  go  in 
and  come  out  with  but  little  delay,  because  for  this  purpose  the 
word  "  stay  "  or  "  remain,"  is  necessary .^  And  it  is  said  that  even 
to  "  enter  and  stop  at,"  gives  no  liberty  to  trade  at  the  pori^but 
that  word  itself,  or  its  full  equivalent,  must  be  used.  Still  the 
circumstances  of  each  case  would  influence  the  court  very 
strongly  in  construing  any  such  phrase  or  permission.^ 

It  is  certain  that  no  permission  is  necessary  for  any  change  of 
course  or  risk  that  is  made  for  the  saving  of  life,  or  even  for  the 
purpose  of  helping  the  distressed.^  Always  provided,  however, 
that  the  change  of  course,  or  the  delay,  was  no  greater  and  no 
longer  continued  than  this  cause  for  it  actually  and  rationally 
considered,  required.  And  the  rule  applies  to  every  case  in  which 
it  is  attempted  to  justify  a  deviation  on  the  ground  of  necessity.* 
It  is,  however,  equally  well  settled  that  a  change  of  course  or 
of  risk  for  the  purpose  of  saving  property,  is  a  deviation  not 
justified  by  its  cause.^ 

Sometimes  it  is  intended  that  a  ship  shall  visit  m^y  ports, 
and  even  go  backwards  and  forwards,  at  places  between  the  port 

1  Urquhart  v.  Barnard,  1  Taunt.  450.  Sir  J.  Matisjield,  C.  J.,  in  delivering  the 
opinion  of  the  court  in  this  case,  says :  "  It  is  doubtful,  nor  can  I  find  it  anywhere 
defined,  what  is  the  precise  meaning  of  '  liberty  to  touch,'  as  contradistinguished  from 
the  meaning  of  '  liberty  to  touch  and  stay.'  No  case  decides  this  ditiiculty,  though 
there  must  be  some  diff'ercnce  between  tiie  two  phrases."  See  also,  Duerhagcn  v.  U. 
S.  Ins.  Co.  2  S.  &  R.  309.  So  it  has  been  held  that  liberty  to  touch  atone  port  will  not 
authorize  the  substitution  of  another  port,  thougii  the  latter  was  not  more  out  of  the 
course.  The  better  opinion  now  seems  to  be  that  where  a  ship  is  rightly  at  a  port,  any 
thing  can  be  done  there  which  will  not  delay  her  or  increase  the  risk.  Raine  v.  Bell, 
9  East,  195 ;  Kane  v.  Col.  Ins.  Co.  2  Johns.  264 ;  Hughes  v.  Union  Ins.  Co.  3  Wheat. 
159;  Thorndike  v.  Bordman,  4  Pick.  471  ;  Chase  v.  Eagle  Ins.  Co.  5  Pick.  51 ;  Cor- 
mack  V.  Gladstone,  11  East,  347  ;  Laroche  v.  Oswin,  12  East,  131. 

2  Ashley  w.  Pratt,  16  M.  &  W.  471 ;  S.  C.  1  Exch.  257;  Metcalfe  v.  Parry,  4  Camp. 
123  ;  Houston  v.  New  England  Ins.  Co.  5  Pick.  89.     See  also,  cases  supra. 

^  Bond  V.  Brig  Cora,  2  Wash.  C.  C  80 ;  Lawrence  v.  Sydebotham,  6  East,  54,  per  Law- 
rence, J.  In  the  case  of  The  Schooner  Boston,  1  Sumner,  328,  Mr.  Justice  Sto7-i/  says  : 
"The  stopping  for  tliis  purpose  could  not,  in  my  judgment,  be  deemed  by  any  tribunal 
in  Christendom  a  deviation  from  the  voyage,  so  as  to  discharge  any  insurance,  or  to 
render  the  master  criminally  or  civilly  liable  for  any  subsequent  disasters  to  his  vessel 
occasioned  thereby.  See  also,  The  Ship  Henry  Ewbank,  1  Sumner,  400  ;  Settle  v.  St. 
Louis.  Perpet.  M.  &  F.  Ins.  Co.  7  Missouri,  379 ;  Walsh  v.  Homer,  10  Missouri,  6. 
And  a  deviation  to  save  lives  on  board  is  also  justifiable ;  but  the  plaintiff"  is  bound  to 
show  that  all  medicines,  &c.,  generally  necessary  for  the  voyage  were  on  board,  but 
were  insufficient  in  the  emergency.    Woolf  v.  Claggett,  3  Esp.  257. 

*  Lavabre  v.  Wilson,  Doug.  290,  per  Lord  Mansjield. 

^  Bond  V.  Brig  Cora,  2  Wash.  C.  C.  80;  Mason  v.  Siiip  Blaireau,  2  Cranch,  240; 
Warder  v.  Goods  Saved  from  La  Belle  Creole,  1  Peters,  Adm.  40 ;  Natchez  Ins.  Co.  v. 
Stanton,  2  Sm.  &  Mar.  340. 


CII.  XVIII.]  OF   MARINE   INSURANCE.  457 

from  which  she  sails,  and  that  at  which  the  voyage  is  finally  to 
terminate.  Such  purposes  as  this  are  sometimes  provided  for 
by  a  policy  on  time  ;  and  sometimes  by  express  permission  to  go 
to  and  trade  at  certain  ports.  But  there  must  be  no  going  back 
and  forth  unless  this  also  is  expressly  stated.  Otherwise,  the 
ports  mentioned  must  be  visited  in  a  certain  order.  If  a  port  is 
named  as  one  to  which  the  ship  will  go,  to  that  she  must  go.  If 
it  be  only  said  that  she  may  go  to  it,  she  may  pass  by  without 
entry.  If  permission  be  given  to  enter  and  stop  at  a  dozen  dif- 
ferent ports,  the  vessel  may  omit  any  of  them  or  the  whole,  but 
must  visit  in  the  proper  order  all  to  which  she  goes.^ 

What  this  order  is,  must  be  determined  by  the  words  used,  and 
by  the  facts,  in  each  case.  Generally,  if  ports  are  enumerated, 
they  must  be  visited  in  the  order  in  which  they  are  mentioned; 
or  if  it  appears  that  this  was  not  intended,  then  in  their  geo- 
graphical order,  which  may  not  be  that  which  the  map  indicates, 
but  that  settled  by  the  course  of  navigation.^  Where  no  final 
port  is  designated,  it  Vv^ould  seem  that  the  ports  permitted  may 
be  visited  in  any  order;  but  even  here  the  voyage  cannot  be  un- 
reasonably protracted.^ 

The  substitution  of  a  new  voyage  for  that  agreed  upon,  is 
of  course  a  deviation,  and  that  can  very  seldom  be  justified  by 
any  necessity  so  as  to  carry  the  insurers  liability  on  the  new 
voyage.  If  an  entirely  new  voyage  is  intended,  and  a  vessel 
sails  upon  it,  but  in  the  same  direction  in  which  she  would  have 
gone  on  the  insured  voyages,  the  policy  never  attaches,  and  the 
premium  is  never  earned,  because  the  ship  never  sails  on  the 
insured  voyage.^  But  if  the  ship  is  intended  to  pursue  the 
insured  voyage  to  its  proper  terminus,  but  at  a  certain  point  of 
the  voyage  to  deviate  by  going  into  another  port,  there  is  no 
deviation  until  that  point  is  reached  and  the  deviation  actually 
begun  ;  because  it  is  certain  that  no  mere  intention  to  deviate  dis- 

1  Andrews  v.  Mellish,  5  Taunt.  496;  Marsden  v.  Rcid,  3  East,  572;  Kane  v.  Colum- 
bian Ins.  Co.  2  Johns.  264;  Hale  v.  Mercantile  Ins.  Co.  6  Pick.  172  ;  Houston  v.  New- 
England  Ins.  Co.  5  Pick.  89. 

*  In  Beatson  v.  Ha\vorth,6  Term,  531,  Lord  Kenyan  held  that,  where  the  geographi- 
cal order  was  different  from  that  named  in  the  policy,  the  latter  must  be  followed,  unless 
a  usage  could  be  shown  to  the  contrary.  Where  a  usage  can  be  shown,  it  will  govern. 
Gairdncr  f.  Senhouse,  3  Taunt.  16;  Bragg  i'.  Anderson,  4  Taunt.  229.  See  also 
Ashley  v.  Pratt,  16  M.  &  W.  471  ;  1  Exch^'257. 

3  Dcblois  V.  Ocean  Ins.  Co.  16  Pick.  303  ;  Gairdner  v.  Senhouse,  3  Taunt.  16. 

*  Marsden  v.  Reid,  3  East,  572;  Wooldridge  v.  Boydell,  Doug.  16;  Palmer  v. 
Marshall,  8  Bing.  79  ;  Palmer  v.  Penning.  9  Bing   460 

39 


458  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

charses  the  insurers  until  it  is  carried  into  execution.'  Whether 
the  intended  deviation  was  only  that,  or  was  so  great  a  change  of 
the  voyage  that  the  mere  intention  to  make  it  was  an  intention 
to  sail  on  an  entirely  different  voyage,  in  which  case  the  policy 
does  not  attach,  would  be  in  every  case  a  question  of  mixed  law 
and  fact.  And  if  it  was  a  part  of  the  intention  not  to  go  finally 
to  the  proper  terminus  of  the  voyage,  this  would  generally,  we 
think,  indicate  that  the  old  voyage  was  given  up  and  a  new  one 
substituted.^ 

SECTION  XXIII. 

OF    THE    TERMINI   OF    THE    VOYAGE,   A>fD    OF    THE    RISK. 

These  must  be  distinctly  stated,  whether  they  be  termini  of 

time    or    place.     A    policy  from  to  ,  or  from    B 

to ,  or  from to  B,  is  void.^     Nor  would  it  be  any 

better  if  the  termini  were  named  with  apparent  distinctness,  but 
in  such  wise  as  to  mean  nothing,  or  nothing  sufficiently  certain.'* 

A  policy  takes  effect  from  its  date,  if  the  bargain  was  then 
complete,  although  not  delivered  until  afterwards.^  And  it  may 
be  remarked  that  if  there  be  an  unreasonable  delay  in  the  sailing 
of  the  vessel,  the  policy  never  attaches,  for  the  bargain  is  consid- 
ered as  annulled.^ 

The  common  phrase  "  lost  or  not  lost,"  or  any  equivalent 
words,  make  the  policy  retrospective,  so  far  that  the  insurers  are 
responsible  for  any  loss  which  occurred  before  the  policy  was 
made,  but  within  the  time  or  the  voyage  insured.'^  If  the  loss 
be  known,  it  must  of  course  be  stated;  but  even  then,  if  its 
extent  or  amount  is  wholly  unknown,  it  may  be  the  subject  of 
valid  insurance.^     If  the  policy  is  to  take  effect  "on"  a   certain 

1  Houston  V.  New  Eng.  Ins.  Co.  5  Pick.  89  ;  Firemen's  Ins.  Co.  i;.  Lawrence,  14  Johns. 
46,  per  Kent,  Chancellor;  Hogg  v.  Horner,  Park  on  Ins.  626,  782  ;  Henshaw  v.  Mar. 
Ins.  Co.  2  Caines,  274 ;  Hobart  v.  Norton,  8  Pick.  159 ;  Hare  v.  Travis,  7  B.  &  C.  14. 

'■^  Tasker  V.  Cunninghanie,  1  Bligli,  87;  Middlewood  v.  Blakes,  7  Term,  162. 

'•^  MoUoy,  book  2,  c.  7,  §  14.  See  also.  Manly  v.  United  Mar.  and  Fire  Ins.  Co.  9 
Mass.  8.5. 

*  Robertson  z'.  French,  4  East,  130;  Langhorn  v.  Hardy,  4  Taunt.  628;  Spitta  v. 
Woodman,  2  Taunt.  416;  Graves  v.  The  Marine  Ins.  Co.  2  Caines,  339;  Richards 
V.  The  Marine  Ins.  Co.  3  Johns. ,307. 

5  Lightbody  v.  North  Am.  Ins.  Co.  23  Wend.  18.  Sec  also.  The  Union  Mat.  Ins. 
Co.  V.  The  Commercial  Mut.  Ins.  Co.  ante,  p.  403,  n.  3. 

8  Sec  ante,  p.  453,  n.  2. 

■^  See  aiite,  p.  414,  n.  1. 

8  Mead  v.  Davison,  3  Ad.  &  Ellis,  303. 


CH.  XVIII.]  OF   MARINE   INSURANCE.  459 

day,  it  begins  with  the  beginning  of  that  day.  If  "from  and 
after"  a  day,  that  day  is  excluded,  but  "  from  "  only  may  be  more 
ambiguous,  and  the  construction  of  the  word  be  open  to  evidence. 
It  has  been  said,  however,  that  "  from  the  date,"  includes  the  day, 
and  "from  the  day  of  the  date."  excludes  it;  but  this  is  a  very 
nice  distinction.' 

A  policy  on  a  vessel  "at"  such  a  place,  generally  attaches 
when  she  is  there  and  in  safety  .^  But  if  there  were  a  policy  "to" 
a  place,  and  another  was  made  out  between  the  same  parties 
"from"  the  same  place,  we  should  say  that  the  law  would  pre- 
sume that  the  parties  intended  that  the  second  policy  should  a.U 
tach  whenever  the  first  one  ceased  by  her  -arrival,  without  refer- 
ence to  the  condition  of  the  ship  or  her  peril  at  the  time.^ 

Generally,  a  policy  on  goods  attaches  to  them  when  it  would 
have  attached  to  the  vessel  had  she  been  insured.  And  if  the 
risk  is  to  begin  at  a  certain  time,  and  also  at  a  certain  port  or 
place,  the  latter  words  may  be  shown  to  be  mere  surplusage,  and 
not  intended  to  control  the  former ;  and  the  risk  will  begin  at 
that  time  wherever  the  ship  may  be.'^  The  extent  w^hich  should 
be  given  to  the  meaning  of  the  word  "port"  is  sometimes  a 
question  of  some  difficulty  ;  but  in  general  all  places  are  within 
a  port  which  belong  to  it  by  mercantile  usage  and  acceptance, 
although  not  within  the  same  municipal  or  legal  precinct.^ 

1  Sir  Eobert  Howard's  Case,  2  Salk.  625.  This  subject  was  elaborately  considered 
by  Lord  Mansfield,  in  Pugh  v.  Duke  of  Leeds,  Cowper,  714.  He  held  that  the  word 
"  from  "  might  be  either  inclusive  or  exclusive,  according  to  the  context  and  subject- 
matter.  He  also  held  that  the  day,  and  the  day  of  the  date  meant  in  every  case  the 
same  thing.  He  says :  "  The  date  is  a  memorandum  of  the  day  wlien  the  deed  was 
delivered.  In  Latin  it  is  'datum;'  and  'datum  tali  rf/e' is,  delivered  on  such  a  day. 
Then  in  point  of  law,  there  is  no  fraction  of  a  day ;  it  is  an  indivisible  point.  What 
is  '  the  day  of  the  date  ? '  It  is  '  the  day  the  deed  is  delivered-'  '  The  date,'  therefore, 
being  also  defined  to  be  the  day  the  deed  is  delivered  ;  '  the  date,'  and  '  the  day  of  the 
date,'  must  mean  the  same  thing.  The  day  of  the  date  is  only  a  superfluous  expres- 
sion." 

2  In  Parmeter  i\  Cousins,  2  Camp.  2.35,  the  insurance  was  at  and  from  the  Island  of 
St.  Michael's.  The  sliip  arrived  in  a  very  disabled  state,  and,  after  lying  at  anchor 
there  twenty-four  hours,  was  blown  out  to  sea  and  wrecked.  Lord  Ellenborough  held 
that  the  policy  under  these  circumstances  never  attached.  He  says:  "She  must  have 
once  been  at  the  place  in  good  safety.  If  she  arrived  at  the  outward  port  so  shattered 
as  to  be  a  mere  wreck,  a  policy  on  the  homeward  voyage  never  attaches." 

3  See  Spitta  ;;.  Woodman,  2  Taunt.  416  ;  Bell  v.  Hobson,  16  East,  240;  1  Arnould 
on  Ins.  p.  427  ;  3  Kent,  Com.  310. 

*  Manly  v.  Unit.  M.  &  F.  Ins.  Co.  9  Mass.  85 ;  In  Martin  v.  The  Fishing  Ins.  Co. 
20  Pick.  389,  a  vessel  was  insured  "at  and  from  Calais,  Maine,  on  the  Ifith  day  of 
July,  at  noon,  to,  at,  and  from  all  ports  and  places  to  which  she  may  proceed  in  the 
coasting  business,  for  six  months."  The  court  held  that  the  policy  attached,  although 
there  was  no  evidence  that  the  vessel  was  at  or  prosecuting  her  voyage  from  Calais  on 
the  day  named. 

^  See  Park  v.  Hammond,  2  Marsh,  189  ;   Payne  v.  Hutchinson,  2  Taunt.  405,  n. ; 


460  ELEMENTS   OF   MERCANTILE    LAW.  [CII.   XVIII. 

"  At  and  from  "  cover  a  vessel  in  a  port  as  well  as  after  she 
leaves  it.  "  From  "  only  covers  the  vessel  after  she  gets  under 
vi^ay.  "  At  and  from "  applied  to  goods,  do  not  cover  them  in 
the  port  iintil  they  become  subject  to  marine  risk,  by  being  water- 
borne.'  They  are  covered  not  only  when  they  reach  the  ship, 
but  as  soon  as  they  are  put  on  board  of  boats  or  lighters  or  any 
other  usual  water  conveyance  to  the  ship.^  And  if  insured  to  a 
port,  they  continue  covered  after  they  leave  the  ship  by  any  usual 
conveyance  for  the  shore.^  The  word  "at"  applied  to  an  island 
or  a  coast,  may  embrace  all  the  ports  therein,  and  cover  the  ship 
while  sailing  from  one  to  another.*  "  To  a  port  and  a  market," 
covers  a  voyage  to  the  port,  and  thence  to  every  place  to  which, 
by  mercantile  usage  or  reasonable  construction,  a  ship  may  go 
thence  in  search  of  a  market.  If  the  insurance  be  on  a  certain 
voyage,  a  very  strong  presumption  of  law  would  confine  it  to 
the  next  voyage  which  came  under  that  description.^ 

If  the  insurance  be  to  "  a  port  of  discharge,"  this  does  not  ter- 
minate if  the  vessel  goes  to  a  port  for  inquiry,  or  for  needful 
refreshment  or  repair.^     If  it  be  "a  final  port  of  discharge,"  the 

Constable  v.  Noble,  2  Taunt.  403  ;  Murray  v.  Col.  Jus.  Co.  4  Johns.  443.  And  sec 
tn//'«,  n.  4. 

1  Spitta  V.  Woodman,  2  Taunt.  416.  And  where  the  risk  is  to  commence  "  in  the 
loading  of  goods  "  at  A,  the  policy  will  not  cover  goods  shipped  before  the  arrival  of 
the  vessel  at  A.  Mellish  v.  Allnutt,"  2  M.  &  S.  106  ;  Langhorn  v.  Hardy,  4  Taunt.  628 ; 
Hornever  v.  Lushington,  15  East,  46  ;  Rickman  v.  Carstairs,  2  Nev.  &  Man.  571.  See 
also,  Graves  v.  Mar.  Ins.  Co.  2  Caines,  339  ;  Scriba  v.  Ins.  Co.  of  N.  H.  2  Wash.  C.  C. 
107.  In  Murray  v.  Col.  Ins.  Co.  11  Johns.  302,  it  was  held  that  the  hoisting  the  cargo 
out  of  the  hold  of  the  ship,  and  restoring  it,  did  not  amount  to  a  loading  it  on  board 
the  ship. 

-  Parsons  v.  Mass.  F.  &  M.  Ins.  Co.  6  Mass.  197;  Coggeshall  v.  Am.  Ins.  Co. 
3  Wend.  283.  In  this  case,  the  vessel  was  on  a  trading  voyage  on  the  western  coast 
of  South  America.  The  policy  covered  goods  laden  on  board  said  vessel  from  the  10th 
of  July  to  the  10th  of  January.  During  this  time  a  basket  of  virgin  silver  was  lost, 
while  being  brought  from  the  shore  to  the  vessel,  in  a  flat  boat.  Held,  that  this  being 
the  customary  mode  of  taking  goods  on  board,  the  assured  were  entitled  to  recover. 

«  Per  Lord  Mansfield,  C.  J.,  in  Hurry  v.  Koyal  Exch.  Ass.  Co.  2  B.  &  Pul.  430 ; 
Eucker  v.  London  Ass.  Co.  2  B.  &  Pul.  432,  note;  Sparrow  v.  Carrnthers,  2  Str.  1236  ; 
Matthie  v.  Potts,  3  B.  &  P.  23  ;  Wadsworth  v.  Pac.  Ins.  Co.  4  Wend.  33  ;  Stewart  v. 
Bell,  5  B.  &  Aid.  238. 

*  Cruikshank  v.  Janson,  2  Taunt.  301  ;  Dickey  v.  Baltimore  Ins.  Co.  7  Cranch,  327. 

5  Maxwell  v.  Robinson,  1  Johns.  333  ;  Deblois  v.  Ocean  Ins.  Co.  16  Pick.  303.  In 
this  case,  the  court  say  :  "  The  words,  and  a  market,  seem  to  us  necessarily  to  confer 
the  liberty  of  returning  to  a  port,  once  and  again,  if  such  return  were  with  the  honest 
intent  of  finding  a  market."     See  also,  Neilson  v.  De  La  Cour.  2  Esp.  619. 

'^  Coolidge  V.  Gray,  8  Mass.  527  ;  Lapham  v.  Atlas  Ins.  Co.  24  Pick.  1.  In  Brown  v. 
Vigne,  12  ICast,  283,  Lord  Ellenborough  used  this  language,  in  speaking  of  a  similar 
case :  "  There  may  be  causes  for  a  ship  putting  back  for  a  time,  without  any  intention 
of  abandoning  her  voyage  ;  as  the  approach  of  an  enemy,  or  a  temporary  embargo;  or 
as  in  a  case  which  occurred  before  Lord  Kenyon,  wliere  a  ship,  bound  to  a  port  in  the 
Baltic,  found  it,  on  her  approach,  blocked  up  by  the  ice  ;  on  which  she  put  back,  but 
afterwards,  on  a  thaw,  sailed  again,  and  Lord  Kenyon  held,  that  she  was  still  under  the 


CH.  XVIII.]  OF   MARINE   INSURANCE.  461 

insurance  ceases  upon  such  parts  of  the  cargo  as  are  left  at  one 
port  or  another,  and  continues  on  the  ship,  and  on  all  the  goods  on 
board,  until  arrival  at  the  port,  where  they  will  be  finally  dis- 
charged.^ 

A  vessel  is  "  at  sea,"  when  in  bays  or  straits;  and  indeed,  by  a 
rather  broad  construction  whenever  not  "  in  port."  And  if  the 
insurance  begins  on  a  ship  on  a  certain  day  "if  at  sea,"  this  has 
been  construed  to  mean  "  if  not  at  home,"  and  therefore  to 
attach  if  the  ship  was  in  a  distant  port." 

The  English  policies  and  our  own  contain  a  provision  that  the 
insurance  continues  on  the  ship  "  until  she  shall  be  arrived  and 
moored  twenty-four  hours  in  safety;"  and  on  the  goods  until 
they  be  "  landed,"  or  "  safely  landed." 

Under  this  clause,  the  ship  is  insured  until  moored  in  safety,  so 
far  as  the  perils  insured  against  are  concerned,  but  not  against 
the  peculiar  and  local  dangers  of  the  port,  or  the  possibility  that 
a  tempest  there  might  injure  her,  for  these  always  exist.  If  she 
enters  the  harbor,  and  before  she  is  moored,  is  blown  off,  or 
ordered  into  quarantine,  she  is  insured  until  this  delay  ceases  and 

policy."  See  also,  Loiighorn  v.  Allnutt,  4  Taunt.  511;  Rucker  r.  Alliuitt,  15  EASt, 
278;  Hammond  v.  Eeid,  4  B.  &  Aid.  72;  Motteux  v.  Lond.  Ass.  Co.  1  Atk.  545  ; 
Cruder  v.  Phil.  Ins.  Co.  2  Wash.  G-  C  262;  Winthrop  r.  Un.  Ins.  Co.  2  Wash.  C.  C  7  ; 
King  V.  Middlctown  Ins.  Co.  1  Conn.  184;  Sage  v.  Middletown  Ins.  Co.  1  Conn.  239. 

1  Inglis  y.  Vaux,  3  Camp.  437; 'Moore  r. "Taylor,  1  Ad.  &  El.  25;  Oliverson  y. 
Brightman,  8  Ad.  &  El.  N.  S.  781 ;  Bold  y.  Rotheram,  id.  797.  In  Upton  v.  The  Salem 
Ins.  Co.  8  Met.  605,  insurance  was  effected  on  a  vessel  from  Salem  to  her  port 
or  ports  of  discharge  in  the  River  La  Plata.  She  discharged  all  her  cargo,  with  the 
exception  of  a  few  bundles  of  shingles  at  Monte  Video,  and  then  sailed  for  Buenos 
Ayres,  where  she  was  lost.  The  court  held  that  if  the  cargo  was  substantially  dis- 
charged at  Monte  Video,  the  underwriters  would  not  be  liable,  and  that  this  was  a 
question  for  the  jury  to  decide. 

^  In  Wood  v.  N.  Eng.  Mar  Ins.  Co.  14  Mass.  31,  the  vessel,  at  the  expiration  of  the 
year,  was  in  a  foreign  port,  where  she  had  been  carried  after  capture  by  a  British  cruiser, 
Parker,  C.  J.,  said  :  "  A  vessel  is  considered  in  that  condition,"  (viz.  at  sea,)  "while 
on  her  voyage  and  pursuing  the  business  of  it,  although  during  a  part  of  the  time  she 
is  necessarily  within  some  port,  in  the  prosecution  of  her  voyage.  The  intention,  in 
prolonging  the  risk  beyond  twelve  months,  was  unquestionably  to  give  the  ship  protec- 
tion under  the  policy,  in  case  that  time  should  expire,  while  the  vessel  should  be 
employed  in  some  unfinished  voyage  ;  and  whether  in  a  foreign  port,  or  actually  upon 
the  high  seas,  wc  believe  there  was  no  difference  in  the  contemplation  of  the  parties, 
when  the  contract  was  made."  In  Bowen  v.  The  Hope  Ins.  Co.  20  Pick.  275,  Shaw^ 
C  J.,  says  :  "  If  the  vessel  has  sailed  or  commenced  a  voyage  from  one  port  to  another, 
she  must  be  considered  to  be  at  sea,  within  the  meaning  of  this  clause,  from  the  com- 
mencement to  the  termination  of  that  voyage,  although  during  part  of  it  she  may  have 
sought  shelter  in  a  place  on  the  way.  Then  what  is  a  departure  on  a  voyage  and  what 
an  arrival  must  be  settled  by  the  law  and  usage  as  established  in  reference  to  cases 
where  the  termini  of  the  voyage,  and  not  periods  of  time,  determine  the  commencement 
and  termination  of  the  risk.  See  also,  on  this  subject.  Union  Ins.  Co.  v.  Tysen,  3  Hill, 
'  118  ;  Eyre  v.  Marine  Ins.  Co.  6  Whart.  247  ;  Burrows  v.  Turner,  24  Wend.  276  ;  Hut- 
ton  V.  Am.  Ins.  Co.  7  Hill,  321. 

39* 


462  ELEMENTS    OF   MERCANTILE   LAW.  [CE.    XVIII. 

she  is  safely  moored  in  port.  And  if  before  or  within  the 
twenty-four  hours  a  dangerous  storm  begins,  she  is  insured  until 
that  storm,  or  its  danger,  ceases.^ 

Goods,  we  have  seen,  are  covered  in  their  transit  from  the  ship 
to  the  shore.2 


SECTION  XXIV. 

OF  TOTAL  LOSS  AND  ABANDONMENT. 

The  law  of  insurance  recognizes  an  actual  total  loss,  and  a  con- 
structive total  loss.  It  is  actual  when  the  whole  property  passes 
away,  as  by  submersion  or  destruction  by  fire.^  It  is  a  construc- 
tive total  loss,  when  the  ship  or  goods  are  partially  destroyed,  and 
the  law  permits  the  insured  to  abandon  the  salvage  or  whatever 
is  saved  to  the  insurers,  and  claim  from  them  a  total  loss.  In 
other  words,  a   constructive  total  loss  is    a    partial  loss    made 

1  Meigs  V.  The  Mut.  Mar.  Ins.  Co.  2  Cush.  439.  In  this  case,  the  insurance  was  on 
a  vessel  and  her  catchings,  on  a  whaling  A'oyagc,  the  risk  to  continue  on  and  during 
her  voyage  and  back  to  M.  "  until  she  be  arrived  and  moored  twenty-four  hours  in 
safety,  and  on  the  property  until  landed."  On  the  return  of  the  vessel  to  M.  the  water 
was  not  high  enough  to  enable  her  to  reach  her  wharf  which  was  her  place  of  final 
destination.  She  was  accordingly  anchored  in  the  harbor,  and  while  being  lightened 
and  on  her  way  to  the  wharf  with  proper  diligence,  she  was  destroyed  by  fire.  This 
did  not  happen  until  more  than  a  week  after  her  arrival  iu  the  harbor.  The  court  held 
that  under  these  circumstances,  the  insurers  were  liable.  They  say:  "Reaching  the 
harbor,  therefore,  cannot  be  arriving  within  the  meaning  of  the  policy  ;  and  if  it  do  not 
mean  tliat,  it  must  mean  that  particular  place  or  point  in  the  harbor,  which  is  the 
ultimate  destination  of  the  ship.  Until  that  point  is  reached,  the  voyage  is  not  ended, 
and  the  ship  has  not  arrived;  though  she  maybe  obstructed  and  delayed  in  her  pro- 
gress through  tlie  harbor,  and  for  want  of  water,  or  by  adverse  winds  or  other  causes, 
be  obliged  to  come  to  anchor,  and  remain  at  anchor  twenty-four  hours,  and  to  take  out 
some  portion  of  her  cargo.  While  she  is  properly  pursuing  her  course  to  the  place  of 
her  ultimate  destination,  and  of  complete  and  iinal  unlading,  and  until  she  reaches 
that  place,  and  has  been  moored  there  in  safety  twenty-four  hours,  she  is  insured  and 
protected  by  the  policy."  See  also,  Angerstein  i\  Bell,  Park  on  Ins.  54 ;  Zacharie  v. 
Orleans  Ins.  Co.  5  Martin,  N.  S.  637  ;  Dickey  v.  Unit.  Ins.  Co.  11  Johns.  358  ;  Samuel 
V.  Roy.  Exch.  Ass.  Co.  8  B.  &  C.  119  ;  Bill  v.  Mason,  6  Mass.  313  ;  King  v.  Middletown 
Ins.  Co.  1  Conn.  184.  In  Waples  v.  Eames,  2  Str.  1243,  it  was  held  that  where  a  ship 
\vas  ordered  into  quarantine  within  twenty-four  hours  after  her  arrival,  the  risk  con- 
tinued till  she  had  been  moored  in  safety  twenty-four  hours  after  the  expiration  of  the 
quarantine. 
•  '  ^  See  ante,  p.  459,  n.  3. 

3  Cambridge  v.  Anderton,  2  B.  &  C.  691  ;  Walker  v.  Protection  Ins.  Co.  29  Maine, 
317.  In  Bullard  r.  The  Roger  Williams  Ins.  Co.  1  Curtis,  152,  Mr.  Justice  Cwr^'s, 
says  :  "  An  abandonment  is  necessary  only  in  case  of  a  constructive  total  loss  ;  if  the 
loss  be  actually  total,  the  insured  may  recover  for  it  without  an  abandonment."  He 
then  goes  on  to  say  that  if  the  vessel  be  incapable  of  repair,  she  has  ceased  to  exist  as 
a  vessel,  and  no  abandonment  is  necessary.  And  the  same  rule  applies  when  the  cost 
of  repairs  would  exceed  the  value  of  the*  vessel  when  repaired.  See,  also,  Smith  v. 
Manf  Ins.  Co.  7  Met.  448 ;  Murray  v.  Hatch,  6  Mass.  465  ;  Roux  v.  Salvador,  3  Bing. 
N.  C.  266  ;  Irving  v.  Manning,  1  H.  L.  Cas.  287,  304. 


f 


CH.  XVIII.]  OF   MARINE  INSURANCE.  '463 

total  by  an  exercise  of  the  right  of  abandonment.'  A  construc- 
tive total  loss  is  sometimes  called  a  "technical"  total  loss. 

The  abandonment  transfers  all  that  remains  of  the  property  to 
the  insurers.  If  nothing  remains,  or  if  that  which  remains  have 
no  value,  there  need  be  no  abandonment,  and  this  is  an  actual 
total  loss. 

The  insured  never  need  make  an  abandonment  if  he  chooses 
not  to  do  so.  And  if  from  such  choice  or  neglect  he  makes  no 
abandonment,  his  claim  against  the  insurers  is  still  perfect  ;2  but 
is  now  to  be  settled  as  a  partial  loss,  of  which  we  shall  speak 
presently.  For  it  is  the  purpose  and  effect  of  an  abandonment 
to  convert  an  actual  partial  loss  into  a  constructive  t^al  loss. 
And  if  he  makes  an  abandonment  when  he  has  no  right  to  make 
it,  such  abandonment  is  wholly  inoperative,  unless  the  insurers 
choose  to  accept  it,  in  which  case  they  must  settle  the  loss  as  a 
total  loss. 

The  topics  in  relation  to  this  subject,  which  we  will  con- 
sider, are :    1.  The  necessity  of  abandonment.     2.  The  right  of 


1  Grade  v.  N.  Y.  Ins.  Co.  8  Johns.  237,  244;  Martin  v.  Crokatt,  14  East,  465  ;  Bell 
V.  Nixon.  Holt,  N.  P.  423  ;  Smith  v.  Manf.  Ins.  Co.  7  Met.  448.  In  Fleming  v.  Smith, 
1  H.  L.  Cas.  513,  534,  Lord  Campbell  says  :  "  A  constructive  total  loss  is  a  good  ground 
for  abandonment,  but  in  deciding  on  the  circumstances  which  constitute  a  constructive 
total  loss,  which  is  as  good  a  term  as  a  contingent  total  loss,  the  reasons  which  govern 
the  conduct  of  prudent  uninsured  owners  must  be  considered.  If  a  prudent  person 
uninsured  would  not  have  repaired  the  vessel,  but  would  have  sold  it  to  be  broken  up, 
that  amounts  to  a  total  loss.  Then  the  question  arises  what  the  assured  is  bound  to 
do  under  such  circumstances,  in  order  to  entitle  himself  to  claim  as  for  a  total  loss. 
The  ship  was  not  submerged  or  destroyed ;  it  remained  in  the  form  of  a  ship,  capable 
of  being  repaired,  and  it  was  for  the  captain  to  determine  whether  it  should  be  repaired 
or  not.  Under  these  circumstances,  the  question  arises,  whether,  when  the  owners  of 
a  ship  so  insured,  receive  the  intelligence  that  the  ship  is  capable  of  being  repaired,  and 
that  it  is  lying  in  port,  they  can  claim  as  for  a  total  loss,  without  giving  -notice  of 
abandonment.  My  opinion  is  that  they  cannot  do  so.  According  to  all  the  old 
authorities,  a  constructive  total  loss  can  only  entitle  the  owners  to  recover  as  for  an 
actual  total  loss  by  a  notice  of  abandonment,  for  though,  in  the  judgment  of  the 
assured,  it  may  be  better  not  to  repair  the  vessel,  the  underwriters  may,  with  different 
means,  give  directions  to  repair,  and  may  direct,  and  are  entitled  to  direct,  how  the 
wreck  is  to  be  disposed  of.  It  would  be  an  extreme  hardship  for  them  to  be  called  on  to 
pay  as  for  a  total  loss  without  having  the  opportunity  of  making  the  most  of  the  ship 
in  its  disabled  state.  The  law,  therefore,  requires  that  notice  shall  be  given  in  order 
to  convert  a  constructive  into  an  absolute  total  loss."  Sec  also,  Moss  v.  Smitli,  9  C. 
B.  94. 

^  In  Smith  v.  Manuf.  Ins.  Co.  7  Mete.  451,  Shmv,  C.  J.,  says  :  "  It  is  always  optional 
with  tlie  assured,  whether  or  not  they  will  abandon  in  case  of  a  constructive  total  loss. 
If  they  do  not,  the  ship,  and  all  profits  and  benefits  of  salvage,  remain  to  the  owners, 
in  the  same  manner  as  if  the  damage  were  not  one  half,  and  did  not  amount  to  a  con- 
structive total  loss;  and  the  assured  will  be  entitled  to  recover,  for  a  partial  loss,  an 
indemnity  to  the  amount  of  the  actual  damage  suffered,  which  may  exceed  fifty  per 
cent.,  and  amount  to  any  sum  sliort  of  a  total  loss."  Gracie  v.  N.  T.  Ins.  Co.  8  Johns. 
244.    Hamilton  v.  Mendes,  2  Burrow,  1211. 


464*  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XVIH. 

abandonment.  3.  The  exercise  of  this  right.  4.  The  acceptance 
of  the  abandonment.  5.  The  eflect  of  the  abandonment,  or  of 
the  absence  of  abandonment. 

1.    Of  the  Necessity/  of  Abandonment. 

It  is  said  that  if  a  ship  be  completely  wrecked,  and  reduced  to 
"  a  mere  congeries  of  planks  and  iron,"  ^  or  if  she  has  not  been 
heard  from  for  a  sufficiently  long  time,  there  need  be  no  aban- 
donment, and  the  insured  may  claim  as  for  a  total  loss,  without 
one.2  In  either  case,  or  any  other  case,  if  the  insurers  pay  a  total 
loss,  thfey  are  entitled  to  whatever  shall  come  to  hand  of  the 
property  insured.^  And  it  is  usual,  and  we  think  more  proper  to 
abandon  in  both  of  these  cases. 

If  the  property  was  injured  by  sea  peril,  and  passed  from  the 
insured  by  a  justifiable  sale  by  the  master,  there  need,  perhaps, 
be  no  abandonment,  but  the  insured  will  account  for  the  pro- 
ceeds.*    If,  however,  he  abandon,  the  salvage  or  proceeds  belong 

1  Per  Abbott,  C.  J.,  in  Cambridge  v.  Anderton,  2  B.  &  C.  691. 

2  Brown  u.  Neilson,  1  Caines,  525;  Green  w.  Brown,  2  Str.  1199;  Camberling  r. 
M'Call,  2  Dall.  280 ;  Gordon  v.  Bowne,  2  Johns.  150.  In  this  case,  Kent,  C.  J.,  says : 
"  There  is  no  precise  time  from  which  this  presumption  is  to  arise.  Each  case  must 
depend  upon  its  own  circumstances." 

^  Sec  post,  p.  464,  n.  1. 

*  On  this  point  the  authorities  are  very  conflicting.  The  doctrine  as  laid  down  in 
the  text  has  been  supported  in  England  in  a  late  case.  Roux  v.  Salvador,  3  Bing. 
N.  C.  266,  and  in  several  cases  in  this  country.  Fuller  i\  Kennebec  M.  Ins.  Co.  31 
Maine,  325  ;  The  Mut.  Safety  Ins.  Co.  v.  Cohen,  3  Gill,  459  ;  and  in  Massachusetts,  id 
Gordon  i'.  IMass,  F.  &  M.  Ins.  Co.  2  Pick.  261,  265.  The  question  arose  in  The  Pa- 
tapsco  Ins.  Co.  v.  Southgate,  5  Peters,  623  ;  but  the  court  did  not  deem  it  necessary  to 
decide  it.  They  however  say  :  "It  may  not  be  amiss  to  observe  that  there  is  very  re- 
spectable authority,  and  that,  too,  founded  upon  pretty  substantial  reasons,  for  saying 
that  no  abandonment  is  necessary  where  the  property  has  been  legally  transferred  by 
a  necessary  and  justifiable  sale.  2  Pick.  261-265."  In  Hodgson  y.  Blackiston,  Park 
on  Ins.  400,  n.,  it  was  held  that  in  such  a  case  there  must  be  an  abandonment.  So,  also, 
in  Smith  v.  Manufacturers'  Ins.  Co.  7  Mete.  448,  453.  The  case  of  Roux  v.  Salvador, 
was  twice  decided;  first  in  the  Common  Pleas,  (1  Bing.  N.  C.  526;  which  decision 
was  reversed  in  the  Exchequer,  3  Bing.  N.  C.  266.)  In  Smith  v.  Mar.  Ins.  Co. 
7  Mete.  452,  453.  Shaw,  C.  J.,  speaking  of  this  case  as  first  decided,  says:  "  But  the 
subject  has  undergone  an  elaborate  discussion  in  a  I'ceent  case,  Roux  v.  Salvador,  in 
which,  after  a  full  review  of  all  the  cases,  it  was  held  that  even  where  the  property 
insured  had  been  sold,  and  the  news  of  the  sale  arrived  as  soon  as  that  of  the  loss,  and 
where  there  was  a  total  loss,  but  not  an  actual  total  loss  by  the  destruction  of  the  thing 
itself,  there  could  not  be  a  recovery  for  a  total  loss  without  abandonment,  and  this  is 
well  supported  in  principle  as  well  as  by  authorities."  In  the  Am.  Ins.  Co.  v.  Erancia, 
9  Barr.  390,  the  jury  found  that  the  cost  of  repairs  would  so  far  exceed  the  value  of  the 
vessel  when  repaired,  that  no  prudent  man  could  doubt  as  to  the  propriety  of  sell- 
ing the  vessel,  and  that  the  sale  was  made  under  circumstances  which  rendered  it  legal. 
The  court  held  that,  notwithstanding  this,  the  insured  could  not  recover  for  a  total  loss 
without  an  abandonment.  They  also  refer  to  Roux  v.  Salvador,  and  express  their 
preference  for  the  doctrine  laid  down  in  the  first  decision  of  that  case. 


en.  XYIII.]  OF   MARINE    INSURANCE.  465 

at  ometo  the  insurers,  and  are  afterwards  at  their  risk;   other- 
wise they  are  at  his  risk.' 


2.   Of  the  Right  of  Abandonment. 

The  insured  cannot  convert  every  partial  loss,  however  small, 
into  a  total  loss,  by  abandonment,  transferring  the  damaged 
property  to  the  insurers.  But  by  a  rule  which  is  nearly  univer- 
sal in  this  country  and  not  unknown  abroad,  if  the  damage  by  a 
peril  insured  against,  exceed  one  half  of  the  value  of  the  p^-operty 
insured,  —  whether  ship,  good?,  or  freight,  —  he  may  abandon 
the  property  to  the  insurers  and  claim  as  for  a  total  loss.^  But 
if  the  vessel  actually  reaches  her  destined  port,  it  seems  that  she 
cannot  be  abandoned,  although  the  repairs  would  cost  more  than 
half  of  her  value.^ 

When  we  speak  of  partial  loss,  it  will  be  seen  that  by  the  es- 
tablished usage  of  this  country,  an  allowance  of  "  one  third,  new 
for  old,"  is  always  made.  This  means,  that  if  a  new  thing  were 
given  for  an  old  one,  because  the  old  one  had  been  injured,  the 
insurer  would  be  more  than  indemnified.  The  sails,  for  example, 
might  be  so  new  that  they  had  lost  little  of  their  value ;  or  so  old, 
that  they  were  of  no  value.  To  avoid  inquiring  into  each  case, 
usage  has  adopted  as  a  fair  average  to  apply  to  all  cases,  that 
the  thing  injured  has  lost  one  third  of  its  value.  When  it  is 
replaced  by  repairs,  the  insured  therefore  pays  one  third  of  the 
cost  of  repair,  and  the  insurers  pay  two  thirds. 

Now,  our  policies  provide  that  there  shall  be  no  total  loss  by 
abandonment,  unl';ss    the   injury  exceed   fifty  per   cent.,   when 

1  The  cft'oct  of  an  abandonment,  as  we  have  seen,  ante,  page  413,  note  5,  is  to  trans- 
fer to  the  insurers  all  the  right,  title,  and  interest  of  the  insured.  But  if  he  do  liot 
abandon  he  can  recover  merely  for  his  actual  loss. 

i  pyy  Parsons,  C.  J.,  Wood  v.  Lincoln  and  Kennebec  Ins.  Co.  6  Mass.  479,  482  ;  De- 
blois  V.  Ocean  Ins.  Co.  16  Pick.  303  ;  Gardiner  r.  Smith,  1  Johns.  Cas.  141  ;  Marcar- 
dier  v.  Ches.  Ins.  Co.  8  Cranch.  39  ;  Clarkson  v.  Phoen.  Ins.  Co.  9  Johns.  1  ;  Queen  v. 
Un.  Ins.  Co.  2  Wash.  C.  C.  331  ;  Dickey  v.  N.  Y.  Ins.  Co.  4  Cowen,  222 ;  Dickey  v.  Am. 
Ins.  Co.  3  Wend.  658  ;  Saurez  v.  Sun  Mut.  Ins.  Co.  2  Sandf.  482;  Allen  v.  Commercial 
Ins.  Co.  1  Gray,  154. 

^  If  a  ship  arrive  at  her  destined  port  as  a  ship,  it  is  very  clear  that,  having  performed 
the  voyage  which  the  underwriters  warranted  she  would  perform,  they  are  not  liable. 
Parage  i'.' Dale,  3  Johns.  Cas.  156;  Pezant  v.  Nat.  Ins.  Co.  15  Wend.  453.  But  if  she 
arrive  a  mere  wreck,  so  as  not  to  be  worth  repairing,  then  slie  does  not  arrive  as  a 
ship,  and  consequently  the  underwriters  will  be  held  liable.  See,  also,  the  remarks 
of  Lord  Chancellor  Cramcorth  in  The  Scottish  Mar.  Ins.  Co.  v.  Turner,  20  Eng.  L.  & 
Eq.  37. 


466  ELEMENTS    OF    MERCANTILE    LAW.  [CH.  XVIII. 

"  estimated  as  for  a  partial  loss;  "  that  is,  one  third  off.  Conse- 
quently, the  repairs  necessary  to  restore  the  vessel  to  a  sound 
condition  must  amount  to  more  than  seventy-five  per  cent,  of 
her  value  when  repaired,  (one  third  of  which,  twenty-five  per 
cent.,  being  cast  off,  leaves  fifty  per  cent.,)  before  there  can  be  an 
abandonment,  which  the  insurers  are  bound  to  accept,  and  settle 
the  loss  as  a  total  loss.  We  think,  however,  the  usage  not 
sufficient  to  require  that  this  one  third  shall  T)e  cast  off,  unless 
expressly  stipulated  as  above  stated,  or  in  some  equivalent 
manner.^ 

The  valuation  in  the  policy,  if  there  be  one,  generally  deter- 
mines the  value  on  which  this  estimate  is  to  be  made.  But  in 
some  of  our  States  it  does  not,  and  there  that  value  must  be 
shown  by  evidence.^  The  premium,  we  think,  should  be  exclud- 
ed;  but  this  may  not  be  quite  settled.'^  A  loss  by  jettison,^  by 
salvage,  by  general  average  contribution,^  by  wages  of  sailors 
paid  while  they  assisted  in  making  the  repairs,  should  be  included 
in  the  fifty  per  cent.^  If  the  insured  have  lost  a  part  of  his  goods 
by  jettison,  and  have  a  claim  for  contribution  which  is  not  yet 
paid,  the  whole  of  his  loss  is  to  be  included  to  make  up  the  fifty 
per  cent.,  and  the  insurers  take  the   claim   to  contribution   by 

1  In  Massachusetts  the  rule  is  well  settled  that  in  every  case  one  third  off  new  for 
old  should  he  deducted.  Sewall  v.  U.  S.  Ins.  Co.  II  Pick.  90;  Winn  v.  Col.  Ins.  Co. 
12  Pick.  279;  Deblois  v.  Ocean  Ins.  Co.  16  Pick  303;  Allen  v.  Commercial  Ins.  Co. 
1  Gray,  158.  So  in  New  York,  Smith  v.  Bell,  2  Caines  Cas.  153;  Pezant  v.  Nat.  Ins. 
Co.  15  Wend.  453.  On  the  other  hand  it  is  opposed  by  Chancellor  Kent,  (Comm. 
vol.  iii.  p.  330,)  also  in  Pennsylvania,  Am.  Ins.  Co.  v.  Francia,  9  Barr.  390.  By  the 
Supreme  Court  of  the  United  States,  Bradlie  v.  Maryl.  Ins.  Co.  12  Peters,  378.  By 
Mr.  Justice  Story,  in  Perele  v.  Merch.  Ins.  Co.  3  Mason,  27  ;  and  in  Robinson  v.  Com- 
monwealth Ins.  Co.  3  Sumn.  220. 

^  In  Peele  v.  Merch.  Ins.  Co.  3  Mason,  27,  Mr.  Justice  Stoiy  adopted  the  value  for 
sale  at  the  time  of  the  loss.  The  rule  is  so  laid  down  in  Bradlie  v.  Maryland  Ins.  Co. 
12  Peters,  378.  See,  also,  Fontaine  v.  Phoenix  Ins.  Co.  11  Johns.  293";  Depeyster  r. 
Col.  Ins.  Co.  2  Caines,  85 ;  Am.  Ins.  Co.  v.  Center,  4  Wend.  45  ;  S.  C.  7  Cowen,  564. 
In  Massachusetts  the  rule  is  well  settled  the  other  way.  Deblois  v.  Ocean  Ins.  Co.  16 
Pick.  303  ;  Hall  v.  Ocean  Ins.  Co.  21  Pick.  472 ;  Allen  v.  Commercial  Ins.  Co.  1  Gray, 
154.  In  New  York,  the  rule  seems  to  be  as  in  Massachusetts.  See  Dickey  r.  N.  Y. 
Ins.  Co.  4  Cowen,  222  ;  Am.  Ins.  Co.  v.  Ogden,  20  Wend.  287. 

3  Sec  Ogden  v.  Col.  Ins.  Co.  10  Johns.  273;  Mayo  v.  Maine  F.  &  M.  Ins.  Co.  12 
Mass.  259  ;  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259  ;  Orrok  v.  Commonwealth  Ins.  Co. 
21  Pick.  456.  Mr.  Phillips  lays  down  the  most  reasonable  rule,  that  if  the  premium 
is  included  in  determining  the  value  of  the  subject,  it  should  also  be  in  estimating  the 
amount  of  repairs.     2  Phillips  on  Ins.  §  1552. 

*  See  Pezant  v.  Nat.  Ins.  Co.  15  Wend.  453;  Reynolds  v.  Ocean  Ins.  Co.  22  Pick. 
191 ;  Col.  Ins.  Co.  v.  Ashbv,  13  Peters,  343. 

*  Moses  V.  Col.  Ins.  Co.  6  Johns.  219  ;  Sewall  v.  U.  S.  Ins.  Co.  11  Pick.  90  ;  Brad- 
lie V.  Maryl.  Ins.  Co.  12  Peters,  378.  See,  also,  Orrok  v.  Commonwealth  Ins.  Co.  21 
Pick.  456. 

«  Hall  V.  Ocean  Ins.  Co.  21  Pick.  472. 


CH.  XVIII.]  OF   MAKINE    INSURANCE.  467 

abandonment.^  The  expense  of  repairs  is  to  be  taken  at  the  place 
where  actually  made,  or  where  they  must  have  been  made,  if 
made  at  ail.^ 

If  the  repairs  cost  less  than  fiffy  per  cent.,  and  the  ship  is  bot- 
tomed for. the  amount,  and  afterwards  sold  on  the  bottomry 
bond,  this  is  a  total  loss  ;  unless  the  vessel  came  within  reach  of 
the  owner,  so  as  to  make  it  his  fault  or  neglect  that  she  was 
sold.3  • 

If  a  sale  be  lawfully  made  by  the  master,  under  the  authority 
from  necessity  which  we  have  considered  in  the  chapter  on  the 
Law  of  Shipping,  this  is  a  total  loss,  and  the  insured  must  ac- 
count for  the  proceeds.^ 

If  distinct  interests  are  included  in  one  policy,  either  under 
one  valuation,  or  under  no  valuation,  they  are  so  far  united  as 
one  subject-matter  of  the  insurance,  that  the  general  rule  requires 
that  they  should  all  be  abandoned  together,  and  theii||ore  an 
abandonment  of  one  alone  is  ineffectual.-^     But  it  seems  to  be^ 

1  It  was  held,  in  Lapslcy  ik  Pleasants,  4  Binney,  502,  that  a  demand  must  be  first 
made  on  those  benefited  by  the  jettison,  before  the  insured  could  recover  of  the  under- 
writers. In  a  late  case  in  Massachusetts,  Forbes  f.  Manufacturers  Ins.  Co.  1  Gray,  371, 
the  true  rule  is  laid  down  that  the  underwriters  mav  be  held  in  the  first  place.  See, 
also,  Maggrath  v.  Church,  1  Caines,  196;  Judah  v.  Randal,  2  Caincs,  Cas.  324;  Amory 
V.  Jones,  6  Mass.  318 ;  Pottcr.i'.  Providence  Washington  Ins.  Co.  4  Mason,  301. 

2  Center  v.  Am.  Ins.  Co.  7  Cowen,  564;  S.  C.  4  Wend,  45  ;  Sewall  v.  U.  S.  Ins.  Co. 
11  Pick.  90;  Saurez  v.  Sun  Mut.  Ins.  Co.  2  Sandf.  482.  So,  if  a  vessel  is  at  a  port 
where  complete  repairs  cannot  be  made,  but  partial  may  be,  which  will  enable  her  to  go 
to  a  port  where  she  can  be  put  in  complete  repair,  it  is  the  duty  of  the  captain  to  take 
her  to  such  a  port,  if  the  expenses  of  both  would  be  less  than  half  her  value.  Orrok  v. 
Com.  Ins.  Co.  20  Pick.  456 ;  Sewall  r.  U.  S.  Ins.  Co.  11  Pick.  90.  So  if  she  were  at  a 
port  where  no  rejiairs  could  be  had,  but  site  could  go  in  safety  to  another,  where  such 
could  be  had.     Hall  r.  Franklin  Ins.  Co.  9  Pick.  483. 

3  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532 ;  S.  C.  20  id.  287  ;  Bradlie  v.  Maryland  Ins. 
Co.  12  Peters,  378.  In  Allen  v.  Commercial  Ins.  Co.  1  Gray,  154,  the  vessel  ai-rived 
at  her  port  of  destination  in  such  a  captlition  that  her  estimated  repairs  were  $5,248. 
This,  after  deducting  one  third,  new  for  old,  was  less  tlian  half  her  value.  The  owners 
were  present,  but  having  no  funds,  fhe  vessel  was  sold.  ,  Thomas,  J.,  in  delivering  the 
opinion  of  the  court,  says  :  "If  this  vessel  had  been  in  a  port  of  necessity,  in  the  condi- 
tion described  m  the  report,  and  the  master  had  found  it  impossible  to  obtain  the  requi- 
site funds  for  her  repair,  by  bottomry  or  otherwise,  or  to  consult  the  owners,  a  sale 
might  have  been  justified  ;  and  upon  abandonment,  no  lien  or  incuml)rancc  having 
been  created  to  deprive  the  underwriter  of  the  rights  which  it  is  the  object  of  an  aban- 
donment to  secure,  a  total  loss  might  have  been  claimed,  thougli  the  cost  of  repair 
would  have  been  less  than  fifty  per  cent."  The  claim  was  denied  in  this  case.  See, 
also,  Depau  v.  Ocean  Ins.  Co.  5  Cowen,  63. 

*  See  ante,  p.  463,  n.  4. 

s  In  Stocker  v.  Harris,  3  Mass.  413,  the  point  was  taken  by  counsel  that  an  owner  could 
not  abandon  his  interest  in  a  ship  only,  where  ship,  cargo,  and  freight  were  jointly 
in.sured.  It  was  not,  however,  decided  by  the  court.  In  Hurtin  r.  Pluen.  Ins.  Co.  1 
Wash.  400,  it  seems  to  have  been  taken  for  granted  that,  where  the  insurance  was  on 
the  vessel  and  cargo,  the  latter  could  be  abandoned  separately.  In  Guerlain  v.  The 
Col.  Ins.  Co.  7  Johns.  527,  it  was  held  that  where  insurance  was  effected  on  different 
kinds  of  goods  by  one  policy,  there  could  not  be  a  total  loss  of  any  one  article  of  the 


468  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XVIII. 

also  held,  that  if  these  interests,  or  if  several  portions  of  the  cargo 
are  separately  valued,  this  makes  them  so  far  distinct  from  each 
other,  that  there  may  be  a  separate  abandonment  of  one  or  the 
other.' 


3.   Of  the  Exercise  of  the  Right  of  Abandonment. 

As  an   abandonment  has  the  eflfect  of  an  absolute  transfer  of 
the  property  to  the  insurers,  and  is  intended  for  this  purpose,  it 
is  obvious  that  it  cannot  be  made    by  one  who  is  not  possessed  . 
of  such  title  to  the  property,  or  such  interest  therein   as  would 
enable  him  to  make  a  valid  transfer.^ 

There  is  no  especial  form  or  method  of  abandonment.  But 
the  proper  and  safe  way  is  to  do  it  in  writing,-^  and  to  use  the 
word  "  abandon,"  or  "abandonment,"*  although  other  words  of 
entirellltequivalent  meaning  might  suffice.^  It  must  be  distinct 
and  unequivocal,  and  state,  at  least  in  a  general  way,  the  grounds 
of  the  abandonment.*^ 


cargo,  witliout  there  was  a  total  loss  of  the  whole.  See,  also,  Marshall  on  Ins.  2d  ed. 
p.  GOO. 

1  It  was  so  held  in  New  York,  in  Deidcricks  v.  Com.  Ins.  Co.  10  Johns.  234,  per 
Kent,  C.  J.     This  case  was  decided  on  the  authority  of  Marshall  on  Ins.  2d  ed.  p.  600. 

■^  Every  abandonment,  says  Valin,  must  he  pure  and  simple,  and  not  conditional,  other- 
wise it  would  not  act  as  a  transfer  of  ownership,  which  is  of  tlie  very  essence  of  aban- 
donment. Valin,  tit.  vi. ;  Des  Assurances,  art.  CO,  vol.  ii.  p.  418.  The  rule  seems  to 
be  that  the  insured  cannot  abandon  unless  he  can  put  the  insurer  in  the  same  position 
in  which  he  stood,  in  relation  to  the  subject-matter,  at  the  time  the  contract  was  entered 
into.  See  Hi(rj;-inson  v.  Ball,  1.3  Mass.  96;  Rice  v.  Homer,  12  Mass.  230;  Gordon  v. 
Mass.  F.  &  M.  Ins.  Co.  2  Pick.  249;  Depaa  v.  Ocean  Ins.  Co.  5  Cowen,  63.  In  Allen 
V.  Commercial  Ins.  Co.  1  Gray,  154,  the  Court  say:  '-The  brig  was  bottomried  for  nec- 
essary recruits,  that  lien  was  not  discharged  before  the  abandonment,  and  it  may  well 
be  doubted,  though,  it  is  not  necessary  to  d^^crmine  this  point,  those  before  stated 
being  conclusive,  whether  the  plaintiffs  coulcWnake  a  valid  abandonment  before  dis- 
charging the  lien  so  created." 

^  Unless  the  policy  contains  some  stipulation  to  the  contrarj',  it  has  been  licld  that  a 
valid  abandonment  may  be  made  by  parol.  Read  v.  Bonliam,  3  Brod..  &  Bing.  147. 
See  also,  Duncan  v.  Koch,  J.  B.  Wallace,  33.  In  Parmeter  v.  Todhuntcr,  1  Camp. 
541,  Lord  Ellenborour/Ji  said:  "  It  would  be  well  to  prevent  parol  abandonments  entirely; 
but  if  tliey  are  allowed,  I  must  insist  upon  t]icir  being  express." 

*  Per  Lord  Ellenborough,  Parmeter  v.  Todhuntcr,  1  Camp.  541. 

^  Thus  it  has  been  held  that  a  demand  for  a  total  loss  is  an  abandonment.  Patapsco 
Ins.  Co.  V.  Southgate,  5  Peters,  604  ;  Ca.sscdy  v.  Louisiana  State  Ins.  Co.  18  Martin, 
(6  N.  S.)  421.  Sec,  also.  Watson  v.  Ins.  Co.  of  N.  A.  1  Binn.  47  ;  Calbreath  r.  Gracy, 
1  Wash.  219.  But  in  Parmeter  v.  Todhuntcr,  above  cited.  Lord  Ellenborough  was  of 
a  different  opinion. 

'^  Jn  Hazard  ?;.  N.  Eng.  Mar.  Ins.  Co.  1  Sumner,  218,  Mr.  Justice  Story  said  he  had 
always  supposed  that  a  letter  of  abandonment,  must  state  the  cause  of  tli'e  loss,  but  for 
the  ijurposes  of  the  trial  he  ruled  tliat  the  one  in  question  was  sufficient.  In  Bullard  v. 
The  Roger  Williams  Ins.  Co.  1  Curtis,  152,  Mr.  Justice  Curtis  says:  "Now,  a  letter 
of  abandonment  must  state  the  cause  of  the  loss,  and  tlie  cause  stated  must  be  a  peril 


CII.  XYIII.]  OF   MARINE   INSURANCE.  469 

If  the  abandonment  be  deficient  in  form,  tiie  insurers  waive 
any  objection  of  this  kind,  by  calling  for  farther  proof  and 
otherwise  acting  as  if  the  abandonment  were  altogether  suffi- 
cient.' 

The  insured  may  abandon  at  any  time  when  the  ship,  by  a 
peril  insured,  is  taken  for  an  uncertain  period  from  the  master's 
control,  and  the  voyage  is  broken  up,  and  cannot  be  renewed, 
unless  at  a  cost  which  of  itself  gives  this  right.^ 
■  The  existence  of  the  right  depends  upon  the  actual  state  of 
facts  at  the  time,  and  not  upon  the  supposed  facts.  If  a  ship  be 
captured  or  stranded,  and  the  owner,  on  receiving  notice,  make 
an  abandonment,  and  the  ship  be  restored  or  got  off  from  the 
shore  before  the  abandonment  is  actually  made,  although  the 
owner  be  wholly  ignorant  of  it,  the  abandonment  is  wholly 
void.2      But  if  the  facts  existing  when  the  abandonment  was 

made,    were  such    as   to  justify    the    abandonment,   it   will   be 

• 

within  the  policy.'"  See,  also,  Peirce  v.  Ocean  Ins.  Co.  18  Pick.  83  ;  Macy  v.  Wlialing 
Ins.  Co.  9  Met.  359 ;  Suyilam  v.  Mar.  Ins.  Co.  1  Johns.  181  ;  Dickey  v.  X.  Y.  Ins.  Co. 
4  Cowen,  222  ;  King  v.  Delaware  Ins.  Co.  2  Wasli.  C.  C.  300. 

1  In  Macy  r.  Whaling  Ins.  Co.  9  Mete.  354,  it  was  held  that  where  an  abandonment 
was  made,  and  the  insured  claimed  a  total  loss  under  the  policy,  without  stating  the 
cause  of  tlie  loss,  but  i-ef'crring  to  intelligence  which  he  had  received,  it  would  not  be 
defective,  because  the  underwriter  could  demand  this  intelligence,  and  time  would  be 
allowed  him  to  decide  whether  to  accept  or  not.  In  Ocean  Ins.  Co.  v.  Francis.  2  Wend. 
64,  the  insurers  made  no  objection  to  the  proof  of  the  interest  of  the  plaintiff,  but  put 
their  refusal  to  pav  upon  another  ground.  Held  that  this  was  a  waiver  of  further 
proof.  See,  also,  Calbreath  v.  Gracy,  1  Wash.  C.  C  219 ;  McLellan  v.  Maine  F.  &  M. 
Ins.  Co.  12  Mass.  246. 

-  Ehinelander  v.  Ins.  Co.  of  Pcnn.  4  Cranch,  41  ;  In  Peele  v.  The  Merchants'  Ins. 
Co.  3  Mason,  65,  Mr.  Justice  Story  says:  "  The  right  of  abandonment  has  been  admitted 
to  exist  where  there  is«i  forcible  dispossession  or  ouster  of  the  owner  of  the  ship,  as  in 
cases  of  capture ;  where  there  is  a  moral  restraint  or  detention,  which  deprives  the  owner 
of  the  free  use  of  the  ship,  as  in  case  of  embargoes,  blockades,  and  arrests  by  sovereign 
authority  ;  where  there  is  a  present  total  loss  of  the  physical  possession  and  use  of  the 
ship."     See,  also,  Roux  v.  Salvador,  3  Bing.  N.  C  266,  and  cases  passim. 

'^  The  English  doctrine  is  best  expressed  in  the  Avords  of  Lord  Mansjield^m  Hamilton 
I".  Mendes,  2  Burrow,  1198,  1210.  "  The  plaintiflf's  demand  is  for  an  indemnity.  His 
action,  then,  must  be  founded  upon  the  nature  of  his  damnification,  as  it  really  is,  at  the 
time  the  action  is  brought.  It  is  repugnant,  upon  a  contract  of  indemnity,  to  recover  as 
for  a  total  loss,  when  the  final  event  has  decided  that  the  damnification  is,  in  truth,  an 
average,  or  perhaps  no  loss  at  all."  The  rule,  thus  laid  down,  has  been  followed  in 
M'Corthy  v.  Abel,  5  East,  388  :  Navlor  v.  Tavlor,  9  B.  &  C.  718  ;  Bainbridgt-  v.  Neil- 
son,  10  East,  329  ;  Patterson  i-.' Ritchie,  4  M.  &  S.  393  ;  Cologan  v.  Lond.  Ass.  Co.  5  M. 
&  S.  447  ;  Hudson  r.  Ilarri.^on,  3  B.  &  B.  105.  See,  however, "the  opinion  of  Lord  ElJon 
in  the  House  of  Lords.  Smith  v.  Robertson,  2  Dow,  474.  In  Peele  v.  Merchants'  Ins. 
Co.  3  Mason,  27,  the  doctrine,  as  now  established  in  this  country,  is  thus  stated  by  Mr. 
Justice  ^tory ;  "  An  abandonment  once  rightfully  made,  is  conclusive,  and  the  rights 
following  from  it  are  not  divested  by  any  subsequent  events  which  may  change  the 
situation  of  the  property."  But  we  should  say  that  the  question  whether  "  riglitfuUy 
made,"  must  depend  upon  the  facts  actually  existing  when  it  was  made.  Sec,  also, 
Rhinelander  v.  The  Ins.  Co.  of  Penn.  4  Cranch,  29 ;  Chcs.  Ins.  Co.  v.  Stark,  6  Cranch, 
268;  Lee  v.  Boardman,  3  Mass.  238  ;  Jumcl  v.  Mar.  Ins.  Co.  7  Johns.  412;  Bordes  v. 
Hallet,  1  Caines,  444  ;  Cincinnati  Ins.  Co.  v.  Bakewell,  4  B.  Monroe,  541 . 

•  40 


470  ELEMENTS   OF   MERCANTILE    LAW.  [CIL  XVIII. 

good,  although  subsequent  occurrences  show  that  the  vessel  was 
neither  lost  nor  endangered  as  was  supposed.^  Nothing,  however, 
ffives  the  risfht  of  instant  abandonment,  without  a  faithful  en- 
deavor  of  the  master  to  find,  if  he  can,  and  use,  if  he  can,  some 
means  of  deliverance  and  safety .^  But  if,  when  delivered  and  re- 
stored to  the  master,  her  damage  amounts  to  more  than  half  of 
her  value,  estimated  as  above  stated,^  she  may  then  be  aban- 
doned. If  the  precise  voyage  insured  be  broken  up  by  a  peril 
insured  against,  this  justifies  an  abandonment,  although  the 
vessel  might  be  put  in  condition  to  pursue  a  different  voyage  or 
render  a  different  service.* 

As  the  insurers,  who  take  the  salvage  property  by  abandon- 
ment, have  a  right  to  every  possible  opportunity  to  make  the 
most  of  it,  it  follows  as  an  invariable  and  universal  rule,  that 
the  insured  must  make  an  abandonment  immediately  after  he 
receives  the  intelligence  which  justifies  it ;  and  if  he  does  not, 
he  will  be  regarded  as  having  elected  not  to  abandon,  and  no 
subsequent  abandonment  will  have  any  effect.'^  It  may  be  stip- 
ulated in  the  policy  that  he  shdll  have  so  many  days  after  receiv- 

1  Church  I'.  Bedient,  1  Caines  Cas.  21 ;  Penny  v.  New  York  Ins.  Co.  3  Caines,  155; 
Schieftelm  v.  New  York  Ins.  Co.  9  Johns.  26.  See,  also,  cases  cited  in  preceding  note. 
In  Peele  v.  Merchants'  Ins.  Co.  3  Mason,  27,  Mr.  Justice  Story  says  :  "  We  are  not  to 
jud,o;e  by  subsequent  events,  except  so  far  as  tliey  operate  by  way  of  evidence  upon  the 
preexisting  state  of  the  ship.  Tlie  right  of  abandonment  depended  altogether  upon 
the  facts  as  they  were,  and  the  conclusions  whieli  reasonable  men  ought  tlicn  to  have 
drawn  from  them  in  the  exercise  of  sound  discretion." 

"  Fontaine  v.  Phren.  Ins.  Co.  11  Johns.  293;  Wood  v.  Lincoln  &  Kennebec  Ins.  Co. 
6  Mass.  483 ;  Idle  r.  Roy.  Exch.  Assurance  Co.  8  Taunt.  755. 

3  See  supra,  p.  465,  notes  2  and  3.  • 

*  "  The  right  to  abandon  exists  whenever,  from  the  circumstances  of  the  case,  the 
ship,  for  all  the  useful  purposes  of  a  ship  for  the  voyage,  is  for  the  present  gone  from 
the  control  of  the  owner,  and  the  time  when  she  will  be  restored  to  him  in  a  state  to 
resume  the  voyage,  is  uncertain  or  unreasonably  distant,  or  the  risk  and  expense  are 
disproportionate  to  the  expected  benefit  and  objects  of  the  voyage."  Per  Mr.  Justice 
Storxj,  Peele  v.  Merch.  Ins.  Co.  3  Mason,  65.  In  Abbott  v.  Broome,  1  Caines,  292,  a 
ship  was  insured  on  a  voyage  from  Batavia  to  New  York.  The  vessel  put  into  St. 
Kitts  in  a  damaged  condition,  and  was  there  sold  because  she  could  not  be  repaired 
sufficiently  to  enable  her  to  bring  in  all  her  cargo.  Subsequently  she  brought  in  part 
of  it.     It  was  held  that  the  insured  might  abandon. 

5  Mitchell  V.  Edie,  1  Term,  608;  Calbreath  v.  Gracy,  1  Wash.  C.  C.  219;  Hudson  v. 
Harrison,  3  B.  &B.  105.  What  is  reasonable  time  must  depend  upon  the  circumstances 
of  each  particular  case,  and  is  to  be  determined  by  the  jury.  Ches.  Ins.  Co.  v.  Stark, 
6  Crancli,  273 ;  Livingston  ?'.  Maryland  Ins.  Co.  7  Cranch,  506  :  Read  v.  Bonham,  3 
B.  &  B.  147.  See,  also.  Smith  v.  Newburyport  M.  Ins.  Co.  4  Mass.  668;  Savage  v. 
Pleasants,  5  Binn.  403  ;  Barker  ?;.  Blakes,  9  East,  283  ;  Mellish  v.  Andrews,  15  East, 
13  ;  Bell  v.  Beveridge,*4  Dall.  272  ;  Duncan  v.  Koch,  J.  B.  Wallace,  33.  In  Hunt  v. 
Roval  Exch.  Ass.  Co.  5  M.  &  S.47,  a  delay  of  five  days  was  held  fotal.  See,  also,  Al- 
dridge  v.  Bell,  1  Starkie,  498;  Smith  v.  Del.  Ins.  Co.  3  Wash.  C.  C.  127 ;  Krumbhaar  v. 
Mar.  Ins.  Co.  1  Serg.  &  Rawlc,  281 ;  Fleming  v.  Smith,  1  House  of  Lords'  Cas.  513  ; 
Mar.  Ins.  Co.  v.  Tucker,  3  Cranch,  357  ;  Hurtin  v.  The  Phoenix  Ins.  Co.  1  Wash.  C.  C 
400.  gi 


CH.  XVIII.]  OF   MARINE   INSURANCE.  471 

ing  intelligence,  for  abandonment.  But  while  this  gives  him  a 
right  to  delay,  it  does  not  oblige  him  to,  and  he  may  therefore 
make  a  valid  abandonment  at  once.^ 

The  abandonment  may  be  made  on  information  of  any  kind, 
if  it  be  entitled  to  weight  and  credence.  So  even  a  general  rumor 
without  specific  intelligence  to  the  insured,  will  authorize  an 
abandonment,  if  the  rumor  seems  to  be  well  grounded  and  alto- 
gether credible.2 

We  regard  it  as  an  ancient,  reasonable,  and  well-established 
rule,  that,  if  insurers  pay  as  for  a  total  loss,  this  payment  entitles 
them  to  full  possession  of  all  that  remains  of  the  property  insured, 
and  also  of  all  rights,  claims,  or  interests,  which  the  insured  has 
in,  or  to,  or  in  respect  of  the  property  lost,  which,  if  he  valued 
or  enforced  them  himself,  would,  if  added  to  the  amount  paid  by 
the  insurers,  give  him  a  double  indemnity.  Hence,  if  the  insured 
has  lost  his  goods  by  jettison,  and  has  a  claim  for  a  general 
average  contribution,  and  the  insured  pay  him  for  all  his  goods, 
they  stand  in  his  place,  and  acquire  that  claim  for  contribution 
which  the  loss  of  the  goods  gave  him.  And  we  should,  very 
generally  at  least,  extend  this  rule  to  the  claim  which  a  mort- 
gagee has  on  the  mortgage,  for  his  debt.  That  is,  if  the  insurers 
pay  for  the  loss  of  the  property  which  secures  the  debt,  they  ac- 
quire, to  the  extent  of  their  payment,  the  mortgagee's  claim 
against  the  debtor.  But  in  a  recent  case,  some  nice  distinctions 
are  taken  on  this  subject.^ 

If  the  salvage  which  the  insurers  take,  is  encumbered  with 
liens  or  charges,  the  insured  must  pay  or  satisfy  these,*  excepting 

1  In  Livingston  v.  ]\Iaryl.  Ins.  Co.  6  Crancli,  274 ;  S.  C.  7  Cranch,  506,  the  under- 
writers agreed  that  if  the  vessel  should  be  captured,  the  assured  might  take  such  meas- 
ures as  they  should  judge  best  for  the  interest  of  the  parties  without  prejudice  to  their 
rights;  the  court  considered  this  to  be  an  agreement  on  the  part  of  the  insurers  that  the 
right  of  aliandonment  should  remain  in  suspense  while  the  property  was  detained,  but 
that  the  insured  might  abandon  at  anv  time  during  the  detention.  See,  also,  Col.  Ins. 
Co.  V.  Catlett,  12  Wheat.  383;  Lovering  v.  Mercantile  Ins.  Co.  12  Pick.  345. 

2  Bosley  v.  Ches.  Ins.  Co.  3  Gill  &  Johns.  450  ;  Muir  v.  Unit.  Ins.  Co.  1  Caines,  54. 
But  it  is  not  enougli  that  it  was  properly  made  upon  supposed  facts,  if  it  turn  out  that 
no  such  facts  existed.  The  right  of  abandonment  depends,  as  we  have  seen,  on  the  state 
of  facts  at  the  time  of  the  abandonment.  Bainbridge  v.  Neilson,  10  East,  329,  341  ; 
Duncan  v.  Koch,  J.  B.  Wallace,  33. 

3  See  cases  cited  ante,  p.  413,  n.  5. 

*  Williams  v.  Smith,  2  Caines,  13.  In  this  case,  Mr.  Justice  Thompson  says:  ''In 
ordinary  cases,  immediately  upon  abandonment,  the  subject  would  become  the  property 
of  the  underwriter.  If,  then,  the  underwriter  has  been  deprived  of  this  property,  in  con- 
sequence of  an  incumbrance  for  whicli  he  is  not  answerable,  the  assured  must  put  him 
in  the  same  situation  he  would  have  been  in,  had  no  such  lien  existed." 


472  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XVIII. 

SO  far  as  they  spring  from,  or  may  be  referred  to,  a  peril  wiiich 
the  insurers  have  insured  against.  As,  for  example,  they  take  a 
ship  free  from  liens  for  wages  earned  before  the  peril,  but  must 
themselves  pay  any  wages  earned  in  saving  the  ship.^  And,  in- 
deed, the  insurers  may  be  bound  for  wages  and  expenses  incurred 
in  good  faith  and  with  a  reasonable  discretion  in  the  endeavor 
to  save  the  ship,  —  which,  by  the  peril  and  abandonment,  was 
their  property, —  although  the  amount  of  the  charges  was  greater 
than  the  value  of  the  salvage.^  But  not  for  expenses  after  the 
insurers  had  refused  to  accept  the  abandonment,  and  expressly 
directed  that  no  more  charges  should  be  made  on  their  account. 
If,  however,  this  prohibition  were  not  in  good  faith,  and  tended 
to  the  destruction  of  the  property,  it  would  be  ineffectual.^ 

By  the  abandonment,  both  the  owner  and  the  master  become, 
to  some  extent,  the  trustee  and  agents  of  the  insurers,  in  respect 
to  the  property  abandoned;  and  are  bound  to  act,  in  relation  to 
it,  with  care  and  honesty.'*  Still,  if  the  property,  after  abandon- 
ment, or  after  a  loss  for  which  there  is  to  be  an  abandonment,  be 
further  lost  or  wasted,  by  the  bad  faith  or  neglect  of  the  master, 
or  of  the  consignee  of  the  owner,  while  acting  as  such,  this  loss 
must  be  made  up  by  the  owner,  because,  although  they  are,  in  a 
certain  sense,  agents  of  the  insured,  they  remain  agents  of  the 
owner,  and  he  is  responsible  for  them  to  the  insured.^ 

Goods  are  totally  lost  if  destroyed,  or  if  so  injured  as  to  have 
little  or  no  value  for  the  purpose  for  which  they  are  intended  ;  or 
if  the  voyage  upon  which  the  insurance  on  the  goods  was  effected, 
is  entirely  broken  up.^     And,  in  addition  to  all  this,  the  fifty  per 

1  Frothinghara  v.  Prince,  3  Mass.  563.  See  also  Hartford  v.  Jones,  1  Ld.  Raym. 
393  ;  2  Salk.  654.  In  Coolidge  v.  Gloucester  Mar.  Ins.  Co.  15  Mass.  341,  Parl-er,  C  J., 
says :  "  But  after  the  loss,  the  insurers,  in  virtue  of  the  abandonment,  become  tlie 
owners,  and  are  liable  for  the  repairs  and  expenses,  and  are  entitled  to  the  earnings  of 
the  ship." 

2  See  post,  Adjustment,  p.  487,  n.  1. 
2  2  Phillips  on  Insurance,  §  1726. 

*  Curcier  v.  Phil.  Ins.  Co.  5  S.  &  R.  113  ;  Lee  i'.  Boardman,  3  Mass.  238 ;  Gardiner 
V.  Smith,  1  Johns.  Cas.  141. 

5  Dederer  v.  Del.  Ins.  Co.  2  Wash.  C  C.  61 ;  Columbian  Ins.  Co.  v.  Ashby,  4  Pet.  139 ; 
United  Ins.  Co.  v.  Scott,  1  Johns.  106,  110.  It  is  well  settled  that,  if  the  master  sell 
the  ship,  when  there  is  no  necessity  for  a  sale,  the  nnderwriters  are  not  responsible, 
though,  in  so  doing,  he  acted  with  the  utmost  good  faith.  Bryant  v.  Commonwealth 
Ins.  Co.  6  Pick.  131 ;  S.  C.  13  Pick.  543.  See  also  the  remarks  of  Mr.  Justice  Bayley, 
in  Gardner  v.  Salvador,  1  Mood.  &  Rob.  116. 

''  We  have  considered,  ante,  p.  421,  n.  5,  in  what  cases  a  voyage  will  be  considered 
as  broken  up  in  regard  to  memorandum  articles,  and  the  same  rule  will  apply  to  cases 
of  insurance  upon  other  articles,  with  this  difference,  that,  in  the  one  case  the  insured 


en.  xvtil]  of  marine  insurance.  473 

cent,  rule,  of  which  we  have  already  spoken,  is  applicable  to 
goods,  in  this  country  ;i  subject,  however,  to  the  important  qual- 
ifications, that  it  does  not  apply  if  any  substantial  portion  of  the 
goods  arrives  at  their  destination  uninjured  ;2  or  if  the  goods  are 
insured  "  free  from  average."  ^  And  the  rule  of  abandonment, 
salvage,  and  transfer  to  the  insurers,  is  the  same  in  relation  to 
goods  as  to  the  ship. 

The  ship  may  t^  totally  lost,  and  not  the  goods.  And  we  have 
seen,  in  our  chapter  on  Shii)piiig,  that,  if  the  ship  be  wrecked, 
and  the  goods  are  or  can  be  saved,  it  is  the  duty  of  the  master  to 
send  them  forward  to  their  destined  port,  if  this  is  within  his 
power,  and  the  circumstances  of  the  case  do  not  make  it  useless 
or  clearly  unwise.  If  he  cannot  transmit  them,  he  is  bound  to 
do  that  which  is,  on  the  whole,  the  best  thing  for  the  interest  of 
all  concerned.*  If  he  fails  to  do  his  duty,  and  the  goods  are  lost, 
wholly  or  partially,  by  this  failure,  the  insurers  are  not  responsible, 
unless  they  have  insured  the  owner  of  the  goods  against  the  mis- 
conduct of  the  master.^  And  the  shipper  of  the  goods  has  his 
remedy  against  the  owner  of  the  ship  for  loss  incurred  by  the 
master's  misconduct,^  which  claim  passes  over  to  the  insurers  of 
the  goods,  if  they  pay  the  loss  to  the  shipper.'' 

So,  if  there  be  many  several  shipments  all  insured,  there  may 

are  bound  to  do  every  thing  in  their  power  to  send  on  the  goods,  so  that  they  will  arrive 
in  specie,  whil»  in  the  other  they  must  be  of  value  on  arrival.  See  Planning  v-  Newn- 
ham,  3  Doug.  130;  Ludlow  v.  Col.  Ins.  Co.  I  Johns.  335;  Lawrence  v.  New  Bedford 
Cora.  Ins.  Co.  2  Story,  471 ;  Hunt  v.  Roy.  Exch.  Ass.  Co.  5  M.  &  S.  47;  Hudson  v. 
Harrison,  3  Brod.  &  Bing.  105 ;  Moss  v.  Smith,  9  Common  Bench,  94  ;  Wilson  i'.  Roy. 
Exch.  Ass.  Co.  2  Camp.  626  ;  Bryant  v.  Commonwealth  Ins.  Co.  6  Pick.  13L 

1  Marcardier  v.  Clies.  Ins.  Co.  8  Cranch,  39;  Gardiner  v.  Smith,  1  Johns.  Cas.  141; 
Judah  I'.  Randal,  2  Caines  Cas.  324  ;  Moses  v.  Col.  Ins.  Co.  6  Johns.  219;  Gilfert  v. 
Hallet,  2  Johns.  Cas.  296. 

-  In  Forbes  v.  Manufacturers'  Ins.  Co.  1  Gray,  371,  the  goods  on  arrival  were  dam- 
aged to  an  amount  equal  to  62  per  cent,  of  their  value.  The  court  held  that  there  was 
no  total  loss.  See  also  Roux  v.  Salvador,  3  Bing.  N.  C.  266  ;  Seton  v.  Del.  Ins.  Co. 
2  Wash.  C.  C.  175. 

^  See  ante,  p.  421,  n.  5. 

*  See  ante,  chapter  on  the  Law  of  Shipping,  p.  380,  and  n.  1. 

5  See  ante,  p.  471,  n.  5.  • 

**  The  liability  of  an  owner  of  a  vessel  for  the  acts  of  a  master,  done  within  the  scope 
of  his  authority,  is  a  well-settled  principle  of  our  jurisprudence.  In  Ellis  r.  Turner,  8 
Term,  531,  a  loss  of  a  part  of  a  cargo  occurred  in  consequence  of  the  misconduct  of 
the  master  of  the  vessel,  and  an  action  having  been  brought  against  the  owners  of  the 
vessel.  Lord  Kenyan  said  :  "  Though  the  loss  happened  in  consequence  of  the  miscon- 
duct of  the  defendants'  servant,  the  superiors  (the  defendants)  are  answerable  for  it  in 
this  action."  See  also  Stone  i'.  Ketland,  1  Wash.  C.  C.  142;  Purviance  v.  Angus,  1 
Dall.  180;  Schieffelin  i,-.  Harvey,  6  Johns.  170  ;  Watkinson  v.  Laughton,  8  Johns.  213. 

'  See  ante,  p.  413,  n.  5. 

40* 


474  ELEMENTS    OF   MERCANTILE   LAW.  [cn.  XVIII. 

be  a  total  loss  of  one,  a  partial  loss  of  another,  and  none  of  a 

third.i 

The  rule  which  gives  a  power  of  sale  to  the  master,  in  a  case 
of  ur^^ent  necessity,  and  only  then,  applies  to  the  goods  as  well 
as  to  the  ship.^  And  if  goods  are  hypothecated,  the  rule  is  the 
same  as  where  the  ship  is  bottomed.^ 

The  freight  is  totally  lost  when  the  ship  is  totally  lost,  or  made 
unnavigable,  or  is  subjected  to  a  detention  of  ^ch  a  character  as 
to  break  up  the  voyage.  If  there  be  a  constructive  total  loss  of 
the  ship,  the  owner  may  abandon  the  freight  with  the  ship.*  But 
if  the  ship  be  actually  lost,  the  freight  may  not  be  ;  for  the  master 
has  the  right,  and  is  under  the  duty,  as  we  have  seen,  of  trans- 
mitting the  goods,  if  he  can.  And  if  he  does,  the  owner  of  the 
ship  is  entitled  to  the  whole  of  his  freight;  and  the  expense  of 
the  transmission  is  all  his  loss.  If  the  master  might  have  done 
this,  and  fails  to  do  it,  the  estimated  expense  of  transmission  is 
still  all  the  loss  for  which  the  insurers  are  responsible.^ 

So,  if  the  ship  can  be  repaired  and  go  on  again,  and  finish  her 
voyage,  the  owner  would  have  the  right  to  hold  on  to  the  goods, 
and  finally  carry  them  and  earn  his  freight.^  And  he  has  this 
right,  although   the  delay  would  be  very  long,  and  even  if  the 

1  Vandenheuvel  v.  The  United  Ins.  Co.  1  Johns.  406. 

■^  Bryant  v.  The  Commonwealth  Ins.  Co.  G  Pick.  131 ;  Searle  v.  Scovell,  4  Johns. 
Ch.  218;  Saltns  v.  Ocean  Ins.  Co.  12  Johns.  107. 

3  Am.  Ins.  Co.  v.  Coster,  3  Paige,  Ch.  323 ;  The  Zephyr,  3  Mason,  3*1. 

*  Am.  Ins.  Co.  v.  Center,  4  Wend.  45.  In  Benson  v.  Chapman,  6  Man.  &  Grang. 
810,  Tindal,  C  J.,  says  :  ''The  assured  has  sustained  a  total  loss  of  the  freight,  if  he 
abandons  the  ship  to  the  underwriters  on  the  ship,  and  is  justified  in  so  doing ;  for, 
after  such  abandonment,  he  has  no  longer  the  means  of  earning  the  freight,  or  the  pos- 
sibility of  receiving  it,  if  earned,  such  freight  going  to  the  underwriters  on  the  ship." 
Though  this  case  was  reversed  'by  the  House  of  Lords,  2  H.  L.  Cases,  096,  yet  the  Lord 
Chancellor,  in  a  subsequent  case  before  that  tribunal,  stated  that  the  reversal  proceeded 
not  on  the  ground  that  the  views  of  the  Chief  Justice  were  erroneous,  if  the  facts  had 
been  such  as  they  were  supposed  to  be  in  the  court  below,  before  the  fi\cts  had  been  put 
on  the  record  in  the  form  of  a  special  verdict,  namely,  that  there  had  been  a  total  loss 
and  abandonment,  but  because  it  was  considered  that  the  facts  found  in  the  special 
verdict,  did  not  show  that  there  had  been  a  total  loss  and  abandonment.  The  Scottish 
Mar.  Ins.  Co.  v.  Turner,  20  Eng.  L.  &  Eq.  36.  See  also  Coolidge  v.  The  Gloucester 
Mar.  Ins.  Co.  15  Mass.' 341:  M'Gaw  v.  Ocean  Ins.  Co.  23  Pick.  405.  In  Benson  v. 
Chapman,  2  H.  L.  Cas.  696,  above  referred  to,  the  ship  was  injured,  and  on  a  survey 
being  called,  it  was  found  that  her  repairs  would  cost  more  than  the  value  of  the  vessel 
when  repaired.  The  court  held  that  this  would  have  justified  an  abandonment  of  the 
freight,  if  the  ship  had  been  abandoned,  but  as  the  master  elected  to  make  the  repairs, 
and  brought  the  vessel  to  her  port  of  destination,  there  was  no  loss  of  freight. 

5  Searle  v.  Scovell,  4  Johns.  Ch.  218. 

6  Herbert  v.  Hallett,  3  Johns.  Cas.  93  ;  Griswold  v.  New  York  Ins.  Co.  I  Johns.  205 ; 
S.  C.  3  Johns.  321.  And  if  the  ship  cannot  be  repaired,  yet  it  is  the  duty  of  the  master 
to  send  on  the  goods  by  another  ship,  if  one  can  be  procured.  See  Jordan  v.  Warren 
Ins.  Co.  1  Story,  342 ;  Bradhurst  o.  Col.  Ins.  Co.  9  Johns.  17. 


en.  XVIII.]  OF  MARINE  INSUl^NCE.  475 

goods  are  injured,  and  it  would  cost  time  and  money  to  put 
them  in  a  condition  of  safety  for  the  residue  of  the  voyage.  Still 
the  ship-owner,  by  his  agent,  the  master,  may  do  all  this,  and 
then  earn  his  freight;  and,  therefore,  if  it  can  be  done,  whether^t 
is  done  or  not,  all  the  claim  which  the  insured  on  freight  can 
make  on  the  insurers,  is  for  the  expense  of  doing  it.^ 

The  rule  of  fifty  per  cent,  applies  to  freight  also.  If,  therefore, 
freight  pro  rata  be  paid,  it  will  be  a  total  loss  by  construction,  if 
less  than  half  be  paid.  So,  if  the  ship  be  injured,  and  part  of  the 
cargo  be  lost,  but  the  ship  may  be  repaired  and  carry  the  remain- 
ing goods  on,  if  that  part  would  pay  more  than  half  of  the  whole 
freight,  it  has  been  held  not  to  be  total,  and  otherwise  it  is.^ 

Freight  is  fully  earned  if  the  goods  remain  substantially  in 
specie,  and  are  so  delivered  to  the  consignee,  although  there  be  a 
very  great  deterioration.  But  freight  is  lost,  and  the  insurers  are 
responsible,  if  nothing  is  left  of  the  goods  but  the  mere  products 
of  decomposition,  so  that  they  are  lost  in  fact.^ 

If,  after  some  freight  is  earned,  there  is  an  abandonment. of  the 
ship,  and    after  the   abandonment,  more  freight  is  earned,  the 

1  Clark  V.  Mass.  F.  &  M.  Ins.  Co.  2  Pick.  104;  M'Gaw  v.  The  Ocean  Ins.  Co.  23 
Pick.  40.').  In  Lord  v.  The  Keptune  Ins.  Co.,  Sup.  Jucl.  Ct.  Mass.,  March  term,  1854, 
insurance  was  effected  on  the  freight  of  the  barque  Dana,  from  New  York  to  Havre.  On 
the  third  day  out,  the  ship  met  with  a  peril  and  was  obliged  to  put  back  to  New  York, 
where  the  cargo  was  discharged,  in  order  to  repair  the  vessel,  and  sold.  It  would  have 
taken  several  months  to  have  prepared  the  cargo  by  drying  for  reshipmcnt,  and  it  was 
conceded  by  both  parties,  that  the  master  acted  for  the  benefit  of  all  concerned  in  selling 
it.     The  court  held  that,  under  these  circumstances,  the  insured  could  not  recover. 

^  Such  must  be  the  inference  from  the  language  of  the  court,  in  Am.  Ins.  Co.  v. 
Center,  7  Cow.  5G4.  But  there  was  in  that  case  a  constructive  total  loss  of  the  ship, 
and  in  such  a  case  the  freight  may  always  be  abandoned.  See  M'Gaw  v.  Eagle  Ins. 
Co.  23  Pick.  405.  But  the  general  doctrine  stated  in  the  text,  seems  to  us  to  admit  of 
doubt.  It  is  hardly  reconcilable  with  other  authorities,  as  that  of  M'Gaw  v.  Eagle  Ins. 
Co.,  just  cited  ;  Jordan  v.  Warren  Ins.  Co.  1  Story,  342  ;  and  Lord  v.  Neptune,  cited 
in  the  preceding  note,  and  again  in  the  next  note. 

3  Ogden  V.  Gen.  Mut.  Ins.  Co.  2  Duer's  Kep.  204;  Ilugg  r.  Augusta  Ins.  Co.  7 
How.  595.  In  Lord  ?>.  The  Neptune  Ins.  Co.,  Shaw,  C.  J.,  hi  delivering  the  opinion 
of  the  court,  said  :  "  The  question,  therefore,  is  not,  whether  the  fiour  and  grain  and 
other  articles  composing  the  cargo,  would  have  been  of  any,  or  what  value  at  Havre  ; 
but  whether,  on  such  reshipmcnt  and  arrival,  th^y  would  have  remained  in  specie,  as 
flour,  wheat,  bacon,  palm  leaf,  &c.  If  so,  then,  it  is  clear  that  they  were  not  so  totally 
lost  that  the  plaintiff  was  prevented,  by  the  peril  insured  against,  from  carrying  them 
and  earning  his  freight."  And,  again  :  ''But  we  think  that,  if  the  goods  are  perishable 
in  their  nature,  and  so  much  damaged,  and  in  such  a  fermenting  and  decaying  con- 
dition, that,  though  remaining  In  specie  at  the  intermediate  port,  they  will  utterly  decay 
and  lose  their  specific  character,  before  they  would  arrive  at  tlie  port  of  destination,  it 
is  now  the  better  opinion  that  they  may  be  deemed  totally  lost,  and  sold  at  the  place 
where  they  are,  and  the  proceeds  will  be  a  salvage  for  the  benefit  of  the  owner  of  the 
goods.  It  is  regarded  at  a  total  loss,  not  because  of  the  sale,  but  because  the  goods  are 
so  far  deteriorated  and  in  process  of  decay,  that,  before  they  could  reach  their  place  of 
destination,  they  would  wholly  lose  their  specific  character,  and  cease  to  be  the  goods 
insured." 


476  ELEMENTS  iPF   MERCANTILE    LAW.  [CH.  XVIH. 

American  cases  hold,  that  the  freight  earned  before  the  abandon- 
ment, goes  to  the  insurers  on  freight;  while  that  earned  after  the 
abandonment,  goes  to  the  insurers  of  the  ship.  But  the  French 
IdfciT  is  the  reverse,  and,  perhaps,  the  rule  in  England.' 


SECTION  XXV. 

OF  REVOCATION  OF  ABANDONMENT. 

An  acceptance  of  an  abandonment  makes  it  irrevocable,  except 
with  the  consent  of  the  insurers.^  But  the  insurers  may  assent; 
and  the  assured  may,  by  his  acts,  revoke  his  abandonment,  and 
then  the  insurers,  by  words,  or  by  their  silence,  assent.  As  if  the 
ship  be  sold  as  a  wreck,  and  he  buys  it  himself,  and  treats  it  as 
his  own ;  as  by  selling  it  as  his  own,  or  sending  it  on  another 
voyage.^ 

It  is  a  different  question,  whether  subsequent  events  can  have 
the  effect  of  revocation,  and  make  void  an  abandonment  which 
was  justified  by  facts  and  rightly  made  in  point  of  form,  at  the 
time.  The  rule,  we  should  say,  was,  that  no  subsequent  events 
could  thus  annul  an  abandonment.*    But  if,  for  example,  a  vessel 

1  By  the  French  law,  an  abandonment  of  the  ship  gave  to  the  underwriters  the  bene- 
fit of  the  freight  pending  at  the  time  of  the  loss.  Boulay  Paty,  tome  3,  p.  481 ;  Valin, 
tome  2,  p.  115  ;  Ilmerigon,  c.  17,  §  9.  In  England,  the  point  does  not  appear  to  be 
fully  settled.  See  Luke  v.  Lyde,  2  Burr.  882;  Morrison  u.  Parsons,  2  Taunt.  407; 
Thompson  v.  Rowcroft,  4  East,  34;  M'Corthy  v.  Abel,  5  East,  388  ;  Ker  v.  Osborne, 
9  East,  378  ;  Sharp  v.  Gladstone,  7  East,  24;  Case  v.  Davidson,  5  M.  &  S.  79 ;  David- 
son V.  Case,  2  B.  &  B.  379  ;  Stewart  v.  The  Greenock  Mar.  Ins.  Co.  2  II.  L.  Cas.  159, 
In  this  country,  it  seems  now  to  be  well  settled  that  the  freight  earned  prior  to  the  loss, 
goes  to  the  underwriter  on  freight,  and  that  earned  subsequent,  to  the  underwriter  on 
the  ship.  Thus,  in  Coolidge  v.  Gloucester  Ins.  Co.  15  Mass.  346,  Mr.  Justice  Putnam 
says,  speaking  of  the  loss  :  "  Until  that  event  happens,  the  property  remains  in  the 
assured  ;  and  the  freight,  or  her  earnings,  belong  to  him  till  that  time,  if  he  stands  his 
own  insurer  for  the  freight;  otherwise  to  tlie  insurer  on  the  freight.  But  after  the  loss 
has  happened,  the  insurers,  in  virtue  of  tlie  abandonment,  become  the  owners,  and  are 
liable  to  the  repairs  and  qpcpenses,  and  entitled  to  the  earnings  of  the  ship."  See  also 
Unit.  Ins.  Co.  v.  Lennox,  1  Johns.  Cas.  377;  Leavenworth  v.  Delafield,  1  Caines,  574; 
Simonds  v.  Union  Ins.  Co.  1  Wash.  C-  C  K.  443 ;  Kennedy  v.  Bait.  Ins.  Co.  3  Harris 
&  Johns.  367;  Teasdale  v.  Charleston  Ins.  Co.  2  Brevard,  190. 

-  King  V.  Middletown  Ins.  Co.  1  Conn.  184. 

3  Abbott  V.  Sebor,  3  Johns.  Cas.  39  ;  Ogden  v.  Fire  Ins.  Co.  10  Johns.  177;  S.  C 
12  id.  25. 

*  In  Hamilton  v.  Mendes,  2  Burr.  1198,  Lord  Mansfield  held  that  it  was  repugnant, 
upon  a  contract  of  indenmity,  to  recover  as  for  a  total  loss,  when  the  final  event  showed 
that  the  damnification  was  in  truth  an  average,  or,  perhaps,  no  loss  at  all.  This  rule 
is  now  well  settled  in  England.  Bainbridge  i'.  Neilson,  10  East,  329;  Iloldsworth  r. 
Wise,  7  B.  &  C.  794 ;  Cologan  v.  Lond.  Ass.  Co.  5  M.  &  S.  447;  Naylor  v.  Taylor,  9 
B.  &  C.  718;  Hudson  v.  Harrison,  3  B.  &  B.  105.  In  this  country,  the  doctrine,  as 
stated  in  the  text,  is  equally  well  settled.    Peele  v.  Merch.  Ins.  Co.  3  Mason,  27 ; 


en.  XVIII.]  OF   MARINE    INSURANCE.  477 

is  stranded  and  in  a  dangerous  position,  and  the  owner,  hearing 
of  it,  abandons,  and  the  next  hour  he  hears  of  her  safety,  by 
reason  of  a  favorable  change  of  wind  or  some  unexpected  deliv- 
erance, it  may  be  said  that  he  had  not  in  fact  a  right  of  abandon- 
ment at  the  time  he  made  it.  The  subsequent  facts  did  not  take 
the  right  away,  but  only  proved  that  it  never  existed.  This  con- 
clusion may  seem  to  conflict  with  the  rule  that  the  right  to  aban- 
don depends  upon  the  appearance  of  things  at  the  time;  this  is, 
however,  their  appearance  when  carefully  and  wisely  considered  ; 
and  such  events  would  go  to  show  that  there  had  not  been  a 
careful  and  wise  consideration  of  all  facts  and  possibilities.  For 
if  it  was  certainly  justified  at  the  time,  and  then  well  made,  it 
cannot  be  in  the  power  of  any  mere  change  of  circumstances 
to  annul  it. 

SECTION  XXVI. 

OF   GENERAL   AVERAGE. 

The  general  principle  upon  which  the  universal  rule  of  general 
average  rests,  is  reasonable  and  just,  and  very  simple. 

The  rule  is  this.  If  many  interests  or  properties  are  in  peril, 
and  one  or  more  of  them  is  wholly  or  partially  sacrificed  for  the 
purpose  of  saving  the  rest,  all  that  is  thereby  saved  must  con- 
tribute towards  indemnifying  the  owner  of  that  which  was 
sacrificed. 

He  is  not  to  be  indemnified  in  full ;  for  then  he  would  be 
better  off  than  those  who  contribute ;  he  would  gain  by  the  fact 
that,  in  a  common  peril,  his  property  was  selected  to  be  made 
the  price  of  the  common  safety.  But  there  is  no  reason  why  he 
should  gain ;  justice  is  perfectly  satisfied  if  he  is  made  to  suffer 
no  more  than  the  rest  do.^  And  this  end  is  attained  by  the  law 
of  general  average,  because  it  adds  together  the  whole  loss,  and 
considers  it  the  loss  of  all  who  were  in  peril,  and  by  the  loss 
saved  from  it,  and  therefore  assesses  the  whole  amount  of  the 

Rhinelander  v.  Ins.  Co.  of  Penn.  4  Cranch,  29 ;  Lee  v.  Boardman,  3  Mass.  238 ;  Jumel 
V.  Mar.  Ins.  Co.  7  Johns.  412;  Cincinnati  Ins.  Co.  v.  Bakewell,  4  B.  Munroc,  541; 
Bordcs  V.  Hallett,  1  Caines,  444.  Sec  also  Bainbridgc  v.  Ncilson,  1  Camp.  237 ;  Smith 
V.  Robertson,  2  Dow,  474,  per  Lord  Eldon. 

1  Tudor  V.  Macomber,  14  Pick.  34;    Strong  v.  Firemen's  Ins.  Co.  11  Johns.  323; 
Simonds  v.  White,  2  B.  &  C.  805  ;  Gray  v.  Wain,  2  Serg.  &  Rawlc,  229,  257. 


478  ELEMENTS    OF    MERCANTILE    LAW.  [CII.  XVIII. 

loss  ratably  of  the  loss,  upon  the  whole  property  that  is  saved, 
and  in  this  way,  every  one  interested  loses  an  equal  proportion 
of  that  which  was  successfully  sacrificed  for  the  common  good. 

This  su'bject  belongs  primarily  to  the  law  of  shipping,  and  has 
been  considered  in  the  chapter  on  that  subject.  But  it  comes 
within  the  scope  of  the  law  of  insurance  when  any  of  the  prop- 
erty which  is  lost  or  saved,  is  insured.  We  must  repeat  some 
of  our  previous  remarks  here,  in  connection  with  the  law  of 
insurance. 

If  an  owner  of  property  is  insured,  and  other  property  is  sacri- 
ficed to  save  the  insured  property  from  a  peril  common  to  it  and 
to  the  sacrificed  property,  the  insured  property  must  pay  such  in- 
demnity for  the  sacrificed  property,  as  will  make  them  suffer  alike. 
And  the  amount  thus  paid  or  contributed  by  the  insured  prop- 
erty, is  a  loss  by  a  sea  peril,  for  which  the  insurers  are  liable. 
On  the  other  hand,  the  insurers  of  the  sacrificed  property  have  a 
right  to  say  that  their  loss  is  only  the^araount  of  what  was  sacri- 
ficed for  the  common  good  with  the  contributed  amount  deducted 
therefrom,  or  else. .transferred  to  them.^ 

The  essentials  of  a  general  average  loss,  all  of  which  must  be 
present  to  bring  it  under  this  rule,  are  :  — 

1.  A  common  peril  impending  at  the  time. 

2.  A  voluntary  loss  or  sacrifice  of  some  property,  for  the  pur- 
pose of  saving  other  property. 

3.  The  success  of  this  endeavor.^ 

Thus,  there  must  be  a  common  peril,  existing  at  the  time  ;3 
for,  if  there  be  no  peril,  or  if  it  be  past,  the  loss  is  merely  wasteful 
and  uncalled  for.  And  if  it  be  not  a  common  peril,  it  is  not  a 
case  oi general  average.  We  can  easily  imagine  a  case  in  which, 
a  thing  which  could  certainly  be  saved,  is  voluntarily  lost  to  save 
that  which  is  in  peril;  but  in  such  case,  the  thing  perilled  and 
saved  should  pay  the  whole  value  of  what  is  lost  to  save  it;  and 
this  is  a  case  of  full  indemnity,  and  not  of  general  average.     So, 

1  Clavk  V.  United  Mar.  &  F.  Ins.  Co.  7  Mass.  365;  1  Mag.  Cas.  19.  See  also 
2  Phillips  on  Ins.  §  1410. 

-  Barnard  v.  Adams,  10  How.  270,  303,  per  Grkr,  J.;  ante,  p.  373,  and  n.  1. 

^  It  is  the  duty  of  the  master,  or  the  person  in  command,  to  determine  when  this 
peril  exists.  The  sea  codes  generally  prescrihe  that  the  master  shall  consult  his  ofiicers 
and  crew  before  making  a  jettison.  But,  though  it  is  in  most  cases  prudent  and  right 
in  him  to  do  so,  yet  there  may  be  times  when  he  must  act  instantly,  and  where  con- 
sultations would  be  useless.  Col.  Ins.  Co.  r.  Ashby,  4  Pet.  139 ;  Birklcy  v.  Presgrave, 
1  East,  220 ;  Sims  v.  Gurney,  4  Binney,  513. 


en.  XVIII.]  OF   MARINE   INSURANCE.  479 

if  a  part  only  of  the  property  insured  is  at  risk,  only  that  part 
contributes  for  the  loss  which  saved  it,  and,  of  course,  the  insur- 
ers are  bound. only  so  far.' 

The  loss  must  be  voluntary ;  hence,  it  is  held  that,  where  the 
property  destroyed  was  not  merely  in  danger,  but  in  the  certainty 
of  destruction,  there  is  no  voluntary  sacrifice  which  creates  a 
claim  for  contribution ;  because,  it  is  not  enough  for  that  purpose 
that  one  casts  away  at  this  moment  what  he  must  inevitably  lose 
the  next  hour  or  the  next  day.  But  when  the  loss*  of  the  whole, 
or  of  the  specific  thing  sacrificed,  is  not  inevitable,  because  it  is 
possible  that  the  loss  of  a  part  might  save  the  rest,  but  something 
or  other  must  certainly  be  lost,  this  is  the  common  case  of  gen- 
eral average,  and  that  part  which  is  selected  for  the  loss,  but 
which  might  have  been  saved  had  another  part  been  selected, 
has  now  its  claim  for  contribution.^ 

And  only  the  property  that  is  saved  by  means  of  the  sacrifice, 
contributes.  If  it  is  lost,  or  if  it  be  saved  and  the  sacrifice  does 
not  contribute  to  its  safety,  there  is  no  reason  why  it  should  con- 
tribute to  indemnify  the  party  making  the  sacrifice.^ 

Much  the  most  common  way  in  which  general  average  arises, 
is  by  jeilison,  or  the  casting  overboard  of  some  part  of  the  cargo  or 
ship,  to  save  the  remainder.  As,  where  the  cargo  is  thrown  over 
to  lighten  a  stranded  ship,  or  her  masts  and  rigging  are  cut  away 
to  relieve  a  laboring  ship.  If  goods  jettisoned  are  recovered,  the 
loss  is  then  only  the  expense  of  recovery  and  restoration,  and  to 
this  loss  the  saved  interests  must  contribute.^ 

If  goods  are  put  on  board  a  boat  or  lighter  to  relieve  the  ship, 

1  See  post,  Particular  Average. 

2  Meech  r.  Robinson,  4  Whart.  360.  On  page  283  of  Benecke  on  Average,  this  rule 
is  laid  down  :  "If  the  master's  situation  was  such,  that,  but  for  a  voluntary  destruction 
of  a  part  of  the  vessel,  or  iier  furniture,  the  wliole  would  certainly  and  unavoidably  have 
been  lost,  he  could  not  claim  restitution,  because  a  thing  cannot  be  said  to  have  been 
sacrificed  which  had  already  ceased  to  have  any  value."     See  also  post,  p.  480,  n.  5. 

3  Scudder  v.  Bradford,  14  Pick.  13;  Bradhurst  v.  Col.  Ins.  Co.  9  Johns.  9;  Caze  v. 
Richards,  2  S.  &  Rawle,  2.37,  n. ;  Col.  Ins.  Co.  r.  Ashby,  13.Pet.  343  ;  The  Nathaniel 
Hooper,  3  Sumn.  542.  Valin  says,  tome  2,  p.  207,  that  tiie  ship  ought  to  be  eflectually 
saved,  so  that  she  may  continue  her  voyage ;  for  if  after  the  jettison  the  tempest  abate 
for  a  short  time,  and  then  recommence,  and  the  vessel  is  wrecked,  although  it  should 
be  some  days  after  the  jettison  was  made,  it  is  not  a  case  of  contribution  on  account  of 
any  goods  that  may  be  saved  from  tlie  wreck. 

*  The  Ordinance,  Art.  22,  tit.  du  jet.,  says:  "If  the  effects  jettisoned  are  recovered 
by  the  owners  after  contribution,  they  shall  be  bound  to  return  to  the  master  and  those 
interested  what  they  have  received  in  the  contribution,  less  the  damage  still  remaining 
to  them  from  the  jettison  and  the  expenses  of  recovery."  See  also  Pothier,  Contracts 
Maritimes,  n.  136,  Cushing's  ed.  78. 


480  ELEMENTS   OP  MERCANTILE   LAW.  [CII.  XVIII. 

and  the  boat  being  in  peril,  some  of  its  cargo  is  jettisoned  to 
relieve  the  boat,  the  whole  ship  and  cargo  contribute.'  But  if 
they  are  put  on  board  the  boat  only  for  their  own  benefit  and 
safety,  and  a  part  are  jettisoned,  only  the  boat  and  what  is  saved 
in  it  contribute.^ 

While  goods  carried  on  deck  must  contribute  if  saved  by  the 
sacrifice  of  other  property,  their  own  jettison  gives  no  claim  for 
contribution,  for  they  should  not  be  carried  there.^  The  only 
exception  to  this  is  where  the  policy  expressly  provides  other- 
wise ;  or  a  distinct  and  established  usage  adds  this  provision  to 
the  express  bargain  of  the  parties.*  So  if  a  boat  is  cast  ofl"  in  a 
peril,  when  it  hangs  from  the  stern  or  side  davits,  but  ought  to 
be  on  deck,  such  a  loss  would  not,  generally  at  least,  give  a  claim 
for  contribution.^ 

As  the  contribution  of  what  is  saved  towards  that  which  is 
lost,  is  always  founded  upon  their  respective  values,  it  is  impor- 
tant to  remember  that  this  value  may  be  greatly  diminished  be- 
fore the  sacrifice  takes  place.  Thus  if  a  mast  be  broken  off"  and 
blown  over  with  all  its  sails  and  rigging,  and  hanging  by  the  side 
of  the  ship  endangers  her,  and  is  cut  away  and  lost  to  save  the 
ship  and  cargo,  the  property  saved  must  contribute  not  for  the 
full  and  original  value  of  the  mast  and  rigging,  but  for  its  value 
in  the  position  in  which  it  was  when  cut  away.^     So  if  a  ship  is 

1  Benecke  &  Stevens,  by  Phillips,  p.  133,  et  seq. ;  Lewis  v.  Williams,  1  Hall,  430 ; 
1  Majr.  160,  Cas.  9. 

2  WhittcridKe  v.  Norris,  6  Mass.  125. 

3  Myer  v.  Vander  Deyl,  Abbott  on  Sliip.  481 ;  Lenox  v.  Unit.  Ins.  Co.  3  Johns. 
Cas.  178;  Smith  v.  Wi'ight,  1  Caincs,  43;  Johnston^'.  Crane,  Kerr's  New  Brunswick 
Eep.  350;  Taunton  Copper  Co.  v.  Mer.  Lis.  Co.  22  Pick.  108;  Ross  v.  Thwaite,  Park 
on  Lis.  23. 

*  Cram  v.  Aiken,  13  Maine,  229;  Barber  v.  Brace,  3  Conn.  9  ;  Dodge  v.  Bartol,  5 
Greenl.  286  ;  Hampton  v.  Brig  Thaddcus,  4  Martin,  Louis.  584;  Gould  v.  Oliver,  4 
Bing.  N.  C.  134  ;  S.  C.  2  Scott,  N.  R.  241.  La  Harley  v.  Milward,  1  Jones  &  Carew, 
Irish  E.Kch.  Rep.  224,  the  owner  of  pigs  carried  on  deck  on  a  voyage  from  Waterford 
to  London  and  jettisoned,  recovered  against  the  owners  of  the  vessel  for  a  general 
average  contribution.  The  ship-owners  then  sued  the  underwriters,  and,  after  an 
elaborate  argument,  it  was  held  by  tlie  Court  of  Queen's  Bench  that  if  the  usage  justi- 
fied tlie  carrying  of  the  pigs  on  deck,  the  underwriters  would  be  liable.  Milward  v.  Hib- 
bert,  3  Ad.  &  Ellis,  N.  S.''l20. 

^  Lenox  v.  Unit.  Ins.  Co.  3  Johns.  Cas.  178;  Benecke  &  Stevens  on  Av.  (Phillips' 
ed.)  p.  369.     See  also  Hall  r.  Ocean  Ins.  Co.  21  Pick.  472. 

''  In  Benecke  &  Stevens,  (Phil,  cd.)  p.  Ill,  it  is  said,  that  though  it  is  the  practice  in 
most  countries  to  allow  for  the  rigging  so  cut,  in  general  average,  at  the  value  which  it 
may  be  supposed  to  have  had  at  the  time  it  was  so  cut,  yet  in  England  no  such  allow- 
ance is  made-  For  this,  two  reasons  are  given,  first, -because  it  was  then  of  no  value  at 
all ;  and,  second,  because  it  would  be  ini]iossible  to  work  the  vessel  without  cutting  it 
awaj^,  so  that  this  act  would  not  be  optional,  but  a  work  of  necessity,  and  consequently, 
no  sacrifice.     But  if  this  happened  in  sight  of  a  port  which  the  vessel  might  reach  with- 


CU.  XVITI,]  OF   MARINE   INSURANCE.  481 

dragging  her  anchors  and  they  arc  cut  away,  and  cable  and  an- 
chor lorft,  their  value  as  they  then  were,  taking  into  consideration 
the  probability  of  getting  them  on  board  again,  must  be  con- 
sidered.' So  if  property  captured  be  jettisoned,  nothing  is  con- 
tributed towards  it  unless  there  be  a  recapture  or  restoration 
which  would  have  extended  to  the  jettisoned  cargo.^ 

Insurers  on  any  property  must  indemnify  the  insured  for  their 
contribution  by  way  of  average,  for  a  loss  which  was  itself 
neither  a  voluntary  sacrifice,  nor  an  expected  loss;  provided  it 
followed  directly  and  naturally  from  a  voluntary  sacrifice.-^  So, 
if  goods  are  jettisoned  and  the  ship  loses  the  freight  of  the  goods 
it  can  no  longer  carry,  the  freight  must  be  contributed  for.  "^ 

If  a  ship  be  purposely  stranded  to  save  ship  and  cargo,  all  that 
is  saved  must  contribute  towards  the  loss  ;  and  this  may  be  the 
whole  loss  of  the  ship,  or  only  the  expense  of  getting  her  off. 
Bift  if  a  ship  must  inevitably  be  stranded  ;  and  all  the  master  can 
do  is  to  keep  her  along  the  shore  until  he  can  find  the  spot  which 
gives  the  greatest  possibility  of  safety,  and  casts  her  there,  this  is 
no  voluntary  stranding  and  gives  no  claim  for  contribution.^  If 
a  ship  be  accidentally  stranded,  the  expense  of  getting  her  off  for 
the  common  benefit,  is  commonly  made  a  subject  of  general 
average.*^ 

If  some  part  of  a  cargo  is  landed  in  safety,  and  by  a  subse- 
quent peril  the  rest  is  damaged,  there  is  no  contribution.     But  if 

out  the  rigp;inp;  being  cut,  and  this  were  done  to  give  her  a  better  chance  of  escaping, 
then  it  would  be  a  sacrifice.     See  also  Ord.  Copenhai,''.  a.  1,  §  10 ;  1  Emerig.  c.  12,  §  41. 

1  Bcnecke  &  Stevens  on  Average,  (Phil,  ed.)  p.  116  ;  1  Magens,  345,  Case,  28  ;  Wes- 
kett,  tit.  Gen.  Av.  n.  3. 

-  Price  V.  Noble,  4  Taunt.  123. 

3  Matrgratli  v.  Church,  1  Caincs,  196. 

*  The  Nathaniel  Hooper,  3  Sumner,  542;  Col.  Ins.  Co.  v.  Ashby,  13  Peters,  331, 
344. 

*  Tliis  question  has  recently  l)een  the  subject  of  elaborate  investigation  by  counsel  in 
the  case  of  Barnard  v.  Adams,  10  Howard,  270,  where  it  was  held  by  tlio  court  that  it 
was  a  proper  case  for  contribution  in  general  average,  for  the  loss  of  a  vessel  where  her 
going  ashore  on  a  rocky  and  dangerous  part  of  the  shore  was  inevitable,  and  the  mas- 
ter, to  avoid  this  immediate  peril,  voluntarily  stranded  her  upon  a  less  dangerous  part, 
whereby  the  crew  and  cargo  were  saved.  See  also  The  Col.  Ins.  Co.  v.  Ashby,  13  Pe- 
ters, 331  ;  Caze  v.  Keillv,  3  Wash.  C.  C.  298  ;  Sims  v.  Gurney,  4  Biuney,  513  ;  Gray  v. 
AValn,  2  Serg.  &  R.  229  ;  Revnolds  v.  Ocean  Ins.  Co.  22  Pick.  197  ;  Bradhurst  v.  the 
Col.  Ins.  CoT  9  Johns.  14  ;  "Walker  r.  U.  States  Ins.  Co.  11  S.  &  K.  61  ;  IMeech  v. 
Robinson,  4  Whart.  300  ;  Benecke  &  Stevens  on  Average,  by  Phillips,  p.  84. 

^  See  Firemen's  Ins.  Co.  v.  Pitzhugh,  4  B.  Monroe,  160;"  Wesk.  tit.  Gen.  Av.  n.  2; 
Benecke  &  Stevens  on  Av.  (Phillips's  ed.)  p.  138.  In  Bedford  Coin.  Ins.  Co  v.  Parker, 
2  Pick.  1,  8,  Parker,  C.  J.,  says:  "Besides,  the  general  principle,  and  a  very  just  one, 
is,  that  when  a  vessel  shall  be  accidentally  stranded,  the  expense  of  getting  her  off  so 
that  she  may  jirocecd  on  her  voyage,  shall  be  borne  proportionably  to  its  value,  by 
every  thing  on  boai"d  as  well  as  by  the  vessel." 

41     ■ 


482  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIIL 

a  cargo  is  landed  in  successive  portions  as  it  always  is,  and  there 
is  a  loss  or  injury  to  that  which  comes  on  shore  last,  there  may 
be  a  general  contribution.' 

If  a  ship  is  compelled  by  a  sea  peril  to  seek  repair,  the  wages 
and  provisions  from  the  moment  she  shapes  her  course  for  the 
port  of  repair,  are  a  subject  of  contribution  in  this  country  ;  as 
are  all  the  expenses  of  temporary  repair  for  the  purpose  of  carry- 
ing on  the  goods;  or  of  any  delay  which  is  caused  by  the  en- 
deavor to  get  repair.^ 

These  wages,  provisions  and  expenses,  as  well  as  the  expenses 
incurred  to  obtain  recovery  from  capture  or  release  from  deten- 
tion, or  escape  from  embargo,  or  hiring  convoy  where  this  is 
necessary,  are  a  subject  of  general  contribution,  for  which  in- 
surers are  liable,  even  if  the  ship  and  cargo  are  not  saved.  But 
then,  not  so  much  under  the  law  of  general  average,  as  because 
those  who  incur  the  expenses  are  considered  as  the  agents  of 
all  interested,  who  are  all,  in  due  proportion,  responsible  for  the 
acts  of  their  agents.^ 

Money  paid  to  salvors,  by  decree  of  salvage  or  otherwise,  in 
good  faith,  or  to  pirates  or  captors  by  way  of  ransom,  is  to  be 
contributed  for  ;  unless  something  is  done  in  this  way  w^hich  is 
unlawful.* 

The  insurers  are  liable  for  the  loss  incurred  by  the  insured,  in 
paying  his  contribution  towards  funds  raised  for  the  common 
benefit  by  bottomry  of  the  ship  or  hypothecation  of  the  goods.^ 

'  In  Bevan  v.  The  Bank  of  tlie  United  States,  4  Whart.  301,  specie,  the  property  of 
the  defendants,  was  taken  from  a  vessel  which  was  ice  bound,  and  in  imminent  danger 
in  Delaware  Bay,  and  carried  to  Philadelpiiia.  Some  weeks  after,  the  vessel  arrived  at 
that  port  witli  the  remaining  cargo  on  board,  which  had  been  discharged  into  lighters 
and  afterwards  reshipped.  It  was  held  tliat  the  defendants  were  liable  to  contribute  to 
these  charges,  although  they  were  incurred  after  the  landing  of  the  specie,  as  general 
average. 

2  See  Plummer  v.  Wildman,  3  M.  &  S.  482  ;  Power  v.  Whitmore,  4  M.  &  S.  141  ; 
Padelford  v.  Boardman,  4  IMass.  548 ;  Clark  v.  U.  S.  F.  &  M.  Ins.  Co.  7  Mass.  365  ; 
Potter  V.  Ocean  Ins.  Co.  3  Sum.  27  ;  Brooks  v.  The  Oriental  Ins.  Co.  7  Pick.  259 ;  Wal- 
den  V.  Le  Roy,  2  Caines,  263 ;  Barker  v.  Phoenix  Ins.  Co.  8  Johns.  307  ;  Dunham  v. 
Com.  Ins.  Co.  11  Johns.  315  ;  Sage  v.  Middletown  Ins.  Co.  1  Conn.  239;  Eoss  v.  Ship 
Active,  2  Wash.  C.  C.  226  ;  Jones  v.  Ins.  Co.  of  N.  A.  4  Dall.  246 ;  2  Binn.  547 ;  Giles 
V.  Eagle  Ins.  Co.  2  Met.  140  ;  Thornton  v.  U.  S.  Ins.  Co.  3  Fairf.  153. 

^  Leavenworth  v.  Delafield,  1  Caines,  573  ;  Penny  v.  N.  Y.  Ins.  Co.  3  Caines,  155; 
Spaffbrd  v.  Dodge,  14  Mass.  66;  Dorr  v.  Union  Ins.  Co.  8  Mass.  494  ;  Kingston  v.  Gi- 
rard,  4  Dall.  274;  Speyer  v.  N.  Y.  Ins.  Co.  3  Johns.  88  ;  Jumel  v.  Mar.  Ins.  Co.  7 
Johns.  412. 

*  Heyliger  v.  The  N.  Y.  Firemen's  Ins.  Co.  11  Johns.  85  ;  Bcawes  Lex  Mercatoria,  tit. 
Gen.  Av.  p.  149  ;  Douglas  v.  Moody.  9  Mass.  551  ;  Welles  r.  Grav,  10  Mass.  42  ;  Clark- 
son  V.  Phoen.  Ins.  Co.  9  Johns.  1  ;  Vandenhenvel  v.  Unit.  Ins.  Co.  2  Johns.  Cas.  451. 

^  Jumel  V.  The  Mar.  Ins.  Co.  7  Johns.  412  ;  Heade  v.  Com.  Ins.  Co.  3  Johns.  352  ; 
Humphreys  v.  Union  Ins.  Co.  3  Mason,  429. 


en.  XVIII.]  OF   MARINE   INSUIIANCE.  483 

The  contributory  value  of  the  property  that  is  saved,  is  its 
value  lulien  it  is  saved,  or  in  safety,  and  as  a  general  rule  this  is 
not  until  its  safe  arrival  in  port;  and  its  value  then  and  there  is 
in  general  its  contributory  value. ^ 

It  is  often  difficult  to  determine  the  contributory  value  of  the 
ship.  But  the  difficulty  is  one  of  fact  rather  than  one  of  law. 
The  general  rule  must  be  the  sanne  as  to  the  ship,  which  has  just 
been  stated  as  to  the  goods;  that  is,  the  value  which  she  has  at 
the  time  of  her  arrival  in  the  port  in  which  the  adjustment  is 
made.  But  from  this  value  should  be  deducted  all  those  ex- 
penses which  were  necessary  to  bring  her  home  in  safety,  and 
which  arose  after  the  loss  that  caused  the  contributory  claim  ; 
whether  they  arose  from  contributions  for  subsequent  jettisons, 
or  for  wages  and  expenses  of  crew  ;  but  these  last  are  not  to  be 
deducted  if  the  ship  earned  her  freight,  for  that  is  considered  as 
paying  these  expenses.^ 

If  freight  be  saved  and  called  on  to  contribute,  there  must  be 
deducted,  if  it  be  earned  by  transshipping  the  goods,  the  expense 
of  transshipment,  and  the  balance  is  the  contributory  value.  If 
it  be  the  whole  freight,  there  must  be  deducted  all  the  charges 
and  expenses  after  the  loss,  necessary  to  earn  and  get  the  freight. 
But  as  it  would  often  be  difficult  to  adjust  this  precisely,  it  is 
quite  usual  in  this  country,  to  deduct  in  lieu  of  these  charges, 
one  third  of  the  gross  freight,  to  bring  it  down  to  its  contribu- 
tory value.  At  the  same  time,  if  the  freight  be  lost  and  to  be 
contributed  for,  the  contribution  is  to  gross  freight.^ 

In  general,  all  charges  and  expenses  necessary  to  bring  the 
property  saved  into  a  port  and  a  condition  of  safety,  are  to  be 
deducted  from  its  value  there,  in  order  to  reach  its  contributory 
value.* 

Particular  average  is  a  phrase  not  now  much  employed  in  this 
country.     It  used  to  be  considered  synonymous  with  partial  loss. 

'  In  Simonds  v.  White,  2  B.  &  C.  805,  Abbott,  C.  J.,  said,  tliat  the  laws  and  usages 
of  all  nations  agreed  in  this,  that  tiie  place  at  which  tlie  average  was  to  he  adjusted  was 
the  place  of  the  ship's  destination  or  delivery  of  her  cargo.  Sec,  also,  The  Mutual 
Safety  Ins.  Co.  v.  Cargo  of  Ship  George,  8  Law  Rep.  361. 

2  Douglas  V.  ^Moodv,  9  Mass.  548;  Spafford  v.  Dodge,  14  Mass.  66;  Leavenworth  v. 
Delafield,  1  Caines,  573 ;  Gray  i'.  Wain,  2  Scrg.  &  Kawle,  229 ;  Dodge  v.  Un.  Ins.  Co. 
17  Mass.  471. 

3  2  Phillips  on  Ins.  .^§  1383,  1389  ;  Benecke  &  Stevens  on  Av.  bv  Phillips,  p.  215  ; 
Bedford  Com.  Co.  v.  Parker,  2  Pick.  1.  • 

*  See  cases  cited  supra. 


484  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVIH. 

But  this,  though  very  common,  was  inaccurate.  Particular  aver- 
age, strictly  speaking,  means  an  average  which  falls  only  on  some 
parts  of  the  property  when  severed  from  the  part;  as  in  the  case 
of  a  boat-load  saved  from  peril  by  a  sacrifice,  to  which  only  the 
boat  and  its  contents  contribute.^  But  as  it  is  adjusted  upon 
these  contributory  interests  by  the  rules  of  general  average,  there 
is  in  fact  no  need  of  discriminating  between  general  average  and 
particular  average. 


SECTION  XXVII. 

OF   PARTIAL   LOSS. 

A  partial  loss  is  simply  a  loss  of  a  part,  and  not  of  the  whole. 
The  principal  questions  relating  to  it  arise  out  of  the  rule  of  one- 
third  off,  new  for  old,  which  has  been  already  spoken  of.^ 

The  first  effect  of  this  rule  is,  that  the  thing  or  the  part  lost  or 
injured,  whether  it  be  new  or  old,  worn  out , or  not  worn  at  all, 
must  be  replaced  or  repaired  in  adaptation  and  conformity  with 
the  vessel,  in  the  same  way  in  which  it  would  be  if  she  were 
properly  repaired  at  the  owner's  port,  by  his  orders.^ 

This  third  part  is  generally,  and  we  think  rightly,  deducted 
from  dockage,  moving  the  ship,  and  similar  expenses,  provided 
they  are  incidental  to  the  main  purpose  of  repair.^ 

Whether  the  deduction  should  be  made  of  the  value  of  the 
old  materials  from  the  expense  of  repair,  may  not  be  settled  by 
authority;  but  we  think  this  should  be  the  rule.  Thus,  if  a  sea- 
peril  makes  it  necessary  to  re-copper  a  vessel,  and  the  cost  will 
be  $9,000,  and  her  old  copper  is  worth  $3,000,  we  should  say 
that  this  should  be  deducted,  leaving  $6,000,  for  two  thirds  of 
which  only  ($4,000)  the  insurers  would  be  liable.  The  other 
way  would  be  for  the  insurers  to  say  they  are  liable  for  $9,000, 

1  Whitteridge  v.  Norris,  6  Mass.  125. 

2  Fisk  V.  Com.  Ins.  Co.  18  La.  77 ;  Benecke  &  Stevens,  (Phil,  ed.)  374.  In  England, 
it  is  not  customary  to  make  this  deduction  when  the  ship  is  new,  and  on  her  first  voy- 
age. Fenwick  r.  Robinson,  3  Car.  &  P.  323;  Weskett,  tit.  Repair,  n.  1  ;  Thompson  v. 
Hunter,  2  Mood.  &  Rob.  ,51,  n.  In  this  countrj',  it  is  well  settled  that  there  is  no  differ- 
ence between  new  and  old  ships,  in  this  respect.  Nickels  v.  Maine  Ins.  Co.  11  Mass. 
253;  Dunham  v.  Com.  Ins.  Co.  11  Johns.  315.     See  also,  ante,  p.  4G5,  n.  1. 

3  Reynolds  v.  Ocean  Ins.  Co.  22  Pick.  191  ;  Benecke  &  Stevens,  (Phillips's  cd.)  384, 
385. 

*  2  Phillips  on  Ins.  §  1432. 


CII.  XVIII.]  OF    MARINE    INSURANCE.  485 

less  one  third, — that  is,  for  ^0,000, — and  the  old  copper  is  ours 
by  way  of  salvage;  and  as  this  is  worth  ^3,000,  we  arc  in  fact 
liable  only  for  the  balance,  or  $3,000.i 

If  an  owner  effects  insurance  on  a  part  only  of  the  value  of  the 
property  insured, — as  if  for  $5,000  on  a  ship  valued  at  $10,000, 
—  he  is  insured  for  half,  and  is  his  owai  insurer  for  the  other 
half,  and  he  recovers  in  the  same  proportion  from  the  insurers  in 
case  of  a  partial  loss.  Thus,  if  there  be  a  partial  loss  of  sails  and 
rigging,  or  of  repairs,  amounting,  after  one  third  is  deducted,  to 
$2,000,  one  half  of  this  is  the  loss  of  the  insurers,  and  one  half 
is  his  own  loss.^ 

The  insurer  takes  no  part  of  the  risk  of  the  market,  and  his 
liability  is  the  same  whether  that  rises  or  falls,  although  this  may 
make  a  great  difference  as  to  the  amount  lost  by  the  insured. 
What  goods  have  lost  from  their  original  invoice  value,  is  the 
amount  w-hich  the  insurer  pays.  Thus,  if  he  insures  $10,000  on 
goods  of  which  that  is  the  value,  and  they  are  so  far  damaged 
by  a  sea-peril,  that  at  the  port  of  discharge  they  bring,  or  are 
worth,  only  half  of  what  they  would  have  brought  if  they  had 
not  been  damaged,  the  insurers  are  liable  for  $5,000,  or  that  half, 
although  the  goods  thus  damaged  may  bring  in  the  market  of 
arrival,  the  whole  of  their  invoice  cost  or  more.  And  if  they 
bring  but  a  quarter  of  it,  the  insurers  pay  no  more  than  one  half 
because  the  rest  of  the  loss  is  caused  by  the  falling  market.^ 

If  the  goods  have  sustained  damage  or  loss  by  leakage,  or  by 
breakage,  or  by  natural  decay,  or  from  inherent  defect  in  quality, 
— that  is,  not  by  a  sea-peril, — before  the  partial  loss  occurs,  a 
proportional  deduction  should  be  made  from  the  partial  loss,  as 


1  The  rule  that  one  third  is  to  be  deducted  from  the  vahie  of  the  old  materials,  does 
not  seem  to  be  founded  on  any  principle  of  justice  wliatevcr.  The  sole  question  is, 
What  is  the  cost  of  the  repairs  'i  The  old  materials  have  never  passed  to  the  under- 
writers, consequently  they  are  not  entitled  to  derive  any  benefit  from  them,  and  the 
one  third  is  to  be  deducted  from  the  balance  remaining  after  deducting  tlie  old  from 
the  new  materials.  It  is  so  held  in  New  York,  Byrnes  v.  Nat.  Ins.  Co.  1  Cowen,  265. 
And  in  Massachusetts,  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259  ;  Eager  v.  Atlas  Ins. 
Co.  14  Pick.  141.  See,  also,  for  a  discussion  of  this  question,  American  Jurist,  Vol. 
5,  p.  252  ;  Vol  6,  p.  45. 

'^  Stewart  v.  The  Greenock  Mar.  Ins.  Co.  2  House  of  Lords  Cas.  159. 

3  In  Lewis  r.  Ruckcr,  2 -Burrow,  1172,  Lord  Mansfield  says:  "The  nature  of  the 
contract  is,  that  tlie  goods  shall  come  safe  to  the  port  of  delivery,  or,  if  they  do  not,  to 
indemnify  the  plaintitF  to  the  amount  of  the  prime  cost,  or  the  value  in  the  policy.  If 
^  speculative  destinations  of  the  merchant,  and  the  success  of  such  speculations  were  to 
be  regarded,  it  would  introduce  the  greatest  injustice  and  inconvenience.  The  under- 
writer knows  nothing  of  them."    See  also  cases  cited  ante,  p.  410,  n.  9,  and  p.  412,  n.  1. 

41* 


486  ELEMENTS   OF   MERCANTILE   LAW..  [CH.  XVIII. 

the  insurers  are  liable  only  for  the  injury  resulting  from  that  loss, 
and  not  for  any  part  of  that  which  already  existed  when  the  loss 
took  jslace.' 


SECTION  XXVIII. 

OF   ADJUSTMENT. 

An  adjustment  of  an  insurance  loss,  with  all  its  incidents  of  gen- 
eral average,  salvage,  and  the  like,  is  usually  made  in  all  com- 
mercial cities,  by  persons  whose  profession  it  is  to  make  them, 
and  usually  in  a  similar  form,  although  the  law  prescribes  no 
particular  form  or  method. 

They  are  instruments  of  much  importance,  because  they  gen- 
erally are  made  and  ought  always  to  be  made  at  the  first  port  of 
discharge  after  the  loss  occurs  ;  and  an  adjustment  made  there, 
in  good  faith,  with  a  sufficient  knowledge  of  the  circumstances, 
and  by  persons  properly  employed  to  make  it,  is  binding  on  all 
interests  and  parties.^ 

If  the  insurers  refuse  to  pay  a  loss,  they  waive  the  adjustment, 
and  the  insured  may  present  a  new  one,  more  favorable  to  them- 
selves, if  the  law  of  insurance  will  sustain  it.^ 

Our  policies  commonly  contain  a  provision,  that  the  loss  shall 
be  paid  so  many  days  after  proof  and  adjustment  of  loss.  But 
if  the  insurers  refuse  to  pay,  or  dispute  the  claim,  there  need  be 
no  adjustment,  either  for  trial,  judgment,  or  execution. 

If  no  repairs  actually  are  made,  but  the  loss  which  calls  for 
repairs  is  to  be  adjusted,  the  third  off — new  for  old — is  to  be  de- 
ducted from  the  estimated  cost  of  repair,  in  the  same  way  in 
which  it  would  have  been  from  the  actual  cost.* 

The  insurers  may  sometimes  be  liable  for  more  than  a  total 
loss,  as  in  some  cases  of  contribution,  followed  by  a  total  loss  ; 
or  where  expenses  were  properly  incurred  by  the  insured,  under 


1  Sec  ante,  p.  495,  n.  3. 

-  Newman  v.  Cazalet,  Park  on  Ins.  900  ;  Strong  v.  New  York  Firemen's  Ins.  Co.  11 
Johns.  323  ;  Simonds  v.  White,  2  B.  &  C.  805 ;  Dalglish  v.  Davidson,  5  D.  &  R.  6  ;  Loring- 
■r.  Neptune  Ins.  Co.  20  Pick.  411  ;  Depau  i\  Ocean  Ins.  Co.  5  Cowen,  63;  Shiffw.  Louis. 
Stale  Ins.  Co.  18  Martin,  629  (6  N.  S.) ;  Thornton  v.  U.  S.  Ins.  Co.  3  Fairf.  150. 

3  American  Ins.  Co.  v.  Griswold,  14  Wend.  399. 

*  See  cases  ante,  p.  465,  n.  1. 


en.  xviri.]  OF  marine  insuiiance.  487 

the  provisions  of  the  policy.^  We  should  say,  also,  that  there 
might  be  a  partial  loss  repaired  and  paid  for  by  the  insurers,  and 
then  a  total  loss  under  the  same  policy,  for  which  they  would 
be  liable,  without  having  the  right  of  demanding  a  deduction  or 
set-ofF  of  what  they  had  paid  on  the  partial  loss.^ 

Our  policies  provide,  usually,  that  any  unpaid  premium,  or 
other  sums  due  from  the  insured,  shall  be  deducted  from  the 
amount  payable  to  the  insured.  Indeed,  the  common  rules  and 
practice  of  the  law  of  set-off,  would  lead  to  a  similar  result.  But 
the  right  is  limited  to  demands  which  the  insurers  have  against 
the  insured  himself,  and  is  not  extended  to  those  which  they  may 
have  against  the  agent  employed  by  the  insured,  to  effect  the  in- 
surance.3  The  premium  note  frequently  expresses  that  the  in- 
sured will  pay  not  only  the  premium,  "  but  any  premiums  or 
balances  due  to  the  insurers,"  or  uses  other  language  to  the  same 
effect.  Such  a  note  is  a  valid  contract,  but  although  made  pay- 
able to  order,  it  cannot  be,  on  general  principles,  a  negotiable 
note;  and,  therefore,  an  indorsee  must  sue  it  in  the  name  of  the 
insurers,  and  be  subject  to  equitable  defence.* 

1  Barker  v.  Phoen.  Ins.  Co.  8  Johns.  307  ;  Potter  r.  Prov.  Wash.  Ins.  Co.  4  Mason^ 
298;  Lawrence  v.  Van  Home,  1  Caines,  276  ;  Jumcl  v.  Mnr.  Ins.  Co.  7  Johns.  412  ; 
M'Bridc  i\  Mar.  Ins.  Co.  7  Johns.  431  ;  Le  Chemhiant  v.  Pearson,  4  Taunt.  367. 

^  See  Le  Cheminant  v.  Pearson,  4  Taunt.  367.  In  Stewart  v.  Steele,  5  Scott's  N.  R. 
927,  it  was  held,  that  insurers  were  liable  for  a  partial  loss  paid  for  re-coppering,  and 
also  for  a  subsequent  total  loss.     See  also  Macarty  v.  Com.  Ins.  Co.  17  La.  Rep.  365. 

3  In  Hurlbert  v.  The  Pacific  Ins.  Co.  2  Sumner,  471,  an  agent  efiected  insurance  for 
the  benefit  of  whom  it  might  concern,  and  after  a  loss,  brought  an  action  against  the 
underwriters  in  his  own  name,  for  the  benefit  of  the  owners  of  the  vessel.  The  court 
held,  tiiat  the  underwriters  could  not  set  olf  debts  or  demands  due  from  the  agent  in 
his  own  right,  against  the  amount  claimed  for  the  loss.  Mr.  Justice  jStonj  held,  that 
by  the  common  law,  the  right  of  set-otf  was  limited  to  cases  of  mutual  connected 
debts,  and  did  not  extend  to  debts  unconnected  with  each  other.  See,  also,  AViggin  v. 
Suffolk  Ins.  Co.  18  Pick.  145. 

*  See  ante,  pages  86,  87,  and  notes. 


488  ELEMENTS    OF   MERCANTILE   LAW.  [cil.  XIX. 


CHAPTER    XIX. 

THE  LAW  OF  FIRE  INSURANCE. 
SECTION  L 

OF   THE   USUAL    SUBJECT   AND   FORM    OF   THIS   INSURANCE, 

We  have  seen  that  fire  is  one  of  the  perils  insured  against  by 
the  common  marine  policies.  It  is  usual,  however,  to  insure 
buildings,  and  personal  property  which  is  not  to  be  water-borne, 
against  fire  alone  ;  and  this  is  what  is  commonly  understood  by 
Fire  Insurance. 

The  general  purposes  and  principles  of  this  kind  of  insurance, 
are  the  same  as  those  of  marine  insurance  ;  and  the  law  in 
respect  to  it  differs  only  in  those  respects  and  in  that  degree  in 
which  the  difference  is  made  necessary  by  the  subject-matter  of 
the  contract.  It  will  be  proper,  therefore,  to  confine  ourselves,  in 
this  chapter,  mainly  to  the  statement  of  these  differences,  and  to 
consider  those  general  principles  which  have  already  been  dis- 
cussed, only  so  far  as  this  may  be  necessary  for  the  comprehension 
or  illustration  of  the  peculiarities  which  belong  to  fire  insurance. 

This  kind  of  insurance  is  sometimes  made  to  indemnify  against 
loss  by  fire,  of  ships  in  port ;  ^  more  often  of  warehouses,  and 
mercantile  property  stored  in  them ;  still  more  frequently  of  per- 
sonal chattels  in  stores,  or  factories,  in  dwelling-houses,  or  barns, 
as  merchandise,  furniture,  books,  and  plate,  or  pictures,  or  live 
stock.  But  by  far  the  most  common  application  of  this  mode  of 
insurance  is  to  dwelling-houses. 

1  The  insurance  on  a  ship,  "on  the  stocks  building,"  includes  the  materials  which 
are  so  far  wrought  as  to  be  in  a  condition  to  be  framed,  and  are  actually  incorporated 
into  the  parts  on  the  stocks,  and  which  were  in  a  proper  place  to  be  conveniently  ap- 
plied to  tiiat  use,  and  by  reason  of  such  adaptation  had  become  valueless  for  other 
purposes.     Hood  v.  Manhattan  Fire  Ins.  Co.  2  Duer,  191. 


en.  XIX.]  THE  LAW    OF    FIRE   INSURANCE.  489 

Like  marine  insurance,  it  may  be  rfTcctccl  by  any  individual 
who  is  capable  of  making  a  legal  contract.  In  fact,  however,  it 
is  always,  or  nearly  always  in  this  country,  and  we  suppose  else- 
where, made  by  companies. 

There  are  stock  companies,  in  which  certain  persons  own  the 
capital  and  take  all  the  profits  by  way  of  dividends.  Or  mutual 
companies,  in  which  every  one  who  is  insured  becomes  thereby 
a  member,  and  the  net  profits,  or  a  certain  proportion  of  them, 
are  divided  among  all  the  members  in  such  manner  as  the  char- 
ter or  by-laws  of  the  company  may  direct.  Or  both  united,  in 
which  case  there  is  a  capital  stock  provided,  as  a  permanent 
guaranty  fund,  over  and  above  the  premiums  received,  and  a 
certain  part  or  proportion  of  the  net  profits  is  paid  by  way  of 
dividend  upon  this  fund,  and  the  residue  divided  among  the 
insured. 

Of  late  years  the  number  of  mutual  fire  insurance  companies 
has  greatly  increased  in  this  country,  and  probably  by  far  the 
largest  amount  of  insurance  against  fire  is  effected  by  them.  The 
principal  reason  for  this  is,  undoubtedly,  their  greater  cheapness  ; 
the  premiums  required  by  them  being,  in  general,  very  much  less, 
in  fact,  than  in  the  stock  offices.  For  example,  if  the  insurance  is 
effected  for  seven  years,  which  is  a  common  period,  an  amount 
or  percentage  is  charged,  about  the  sanie  as,  or  a  little  more  than 
is  charged  by  the  stock  companies.]  Only  a  small  part  of  this 
is  taken  in  cash;  for  the  rest  a  premium  note  or  bond  is  given, 
promising  to  pay  whatever  part  of  the  amount  may  be  needed 
for  losses  which  shall  occur  during  the  period  for  which  the  note 
is  given.  More  than  this,  therefore,  the  insured  cannot  be  bound 
to  pay,  and  it  frequently  happens  that  no  assessment  whatever 
is  demanded  ;  and  sometimes  where  the  company  is  well  estab- 
lished and  does  a  large  business  upon  sound  principles,  a  part  of 
the  money  paid  by  him  is  refunded  when  the  insurance  expires, 
or  credited  to  him  on  the  renewal  of  the  policy  if  such  be  his 
wish.i  ^. 


1  A  policy  issued  by  ;i  mutual  insurance  company,  and  a  premium  note  fjivcn  at  the 
same  time,  for  the  payment  of  assessments,  arc  independent  contracts,  and  a  vote  by 
such  a  company  tliat  if  the  assessments  uj)on  its  premium  notes  should  not  be  punc- 
tually paid,  the  insurances  previously  made,  sliould  be  suspended,  is  of  no  validity,  unless 
assented  to  by  the  insured.  New  England  Mutual  Fire  Ins.  Co.  v.  Butler,  34  Maine, 
451.  Wiiere  the  policy  has  been  rendered  void  by  a  transfer  of  interest,  the  insured  is 
personally  liable  on  the  premium  note,  until  an  actual  surrender  of  the  policy,  and  the 


400  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XIX. 

The  disadvantage  of  these  mutual  companies  is,  that  the  pre- 
miums paid  and  premium  notes,  constitute  the  whole  capital  or 
fund,  out  of  which  losses  are  to  be  paid  for.  To  make  this  more 
secure,  it  is  provided  by  the  charter  of  some  companies,  that  they 
sliould  liave  a  lien  on  the  land  itself  on  which  any  insured  build- 
ing stands,  to  the  amount  of  the  premium.  But  while  this  adds 
very  much  to  the  trustworthiness  of  the  premium  notes,  and  so 
to  the  availability  of  the  capital,  it  is,  with  some  persons,  an 
objection,  that  their  land  is  thus  subjected  to  a  lien  or  in- 
cumbrance. 

There  is  another  point  of  difference  which  recommends  the 
stock  rather  than  the  mutual  company.  It  is  that  the  stock 
company  will  generally  insure  very  nearly  the  full  value  of  the 
property  insured,  while  the  mutual  companies  are  generally  re- 
strained by  their  charters  from  insuring  more  than  a  certain  mod- 
erate proportion,  namely,  from  one  half  to  three  fourths,  of  the 
assessed  value  of  the  property.  It  would  follow,  therefore,  that 
one  insured  by  a  mutual  company,  cannot  be  fully  indemnified 
against  loss  by  fire  ;  and  may  not  be  quite  so  certain  of  getting 
the  indemnity  he  bargains  for,  as  if  he  were  insured  by  a  stock 
company.  But  this  last  reason  is,  practically,  of  very  little  im- 
portance, and  the  lowness  of  the  premiums  effectually  overcomes 
the  other. 

The  method  and  operation  of  fire  insurance  have  become  quite 
uniform  throughout  this  country;  and  any  company  may  appeal 
to  the  usage  of  other  companies  to  answer  questions  which  have 
arisen  under  its  own  policy;  only,  however,  within  certain  rules, 
and  under  some  well-defined  restrictions.  In  the  first  place, 
usage  may  be  resorted  to  for  the  purpose  of  explaining  that 
which  needs  explanation,  but  never  to  contradict  that  which  is 

payment  of  all  assessments  ap:ainst  him  for  losses  sustained  before  the  surrender.  In- 
diana Mutual  Fire  Ins.  Co.  v.  Coquillard,  2  Carter,  (Ind.)  645.  So  the  insured  is  liable 
for  premiums  during  the  whole  term  of  the  insurance,  even  though  there  was  a  previous 
loss,  unless  there  is  something  in  the  policy,  charter  or  by-laws,  or  premium  note, 
showing  a  ditferent  contract  or  discharge.  N.  li.  INIutual  Fire  Ins.  Co.  4  Foster,  428; 
Swamscot  Machine  Co.  v.  Partridge,  5  id.  369.  Where  the  charter  and  by-laws  of  the 
company  provide  for  assessments  in  case  of  losses  not  to  exceed  tlie  amount  of  the  pre- 
mium notes,  it  was  held  that  witliout  such  losses  no  recovery  could  be  iiad  on  tlie  notes, 
although  absolute  on  the  face.  Insurance  Co.  v.  Jarvis,  22  Conn.  133.  It  has  been 
held  that  where  the  policy  of  a  mutual  insurance  company  becomes  ipso  facto  void  by 
an  alienation,  a  member  will  not  bo  liable  for  assessments  for  losses  occurring  after  an 
alienation.  Wilson  v.  Trumbull  Mutual  Fire  Ins.  Co.  19  Penn.  Stat.  372.  The  giving 
of  the  premium  note  is  not  necessary  to  the  consummation  of  the  contract  of  insurance. 
Blanchard  v.  Waite,  28  Maine,  51. 


en,  XIX.]  THE    LAW    OF   FIRE   INSURANCE.  491 

clearly  expressed  iti  the  contract.^  And  no  usage  can  be  admit- 
ted even  to  explain  a  contract,  unless  the  usage  be  so  well  estab- 
lished and  so  well  known,  that  it  may  reasonably  be  supposed 
that  the  parties  entered  into  the  contract  with  reference  to  it. 
Thus  if,  under  a  policy  against  fire  on  a  vessel  in  one  port  of  this 
country,  an  inquiry  is  raised  as  to  the  local  usage,  the  policy  is 
not  to  be  affected  by  proof  of  usage  upon  any  particular  matter  in 
other  ports  of  the  world,  or  even  of  the  United  States.^  And  not 
only  the  terms  of  the  contract  must  be  duly  regarded,  but  those  of 
the  charter  ;  thus,  if  this  provides,  that  "  all  policies  and  other  in> 
struments  made  and  signed  by  the  president,  or  other  officer  of 
the  company,  shall  bind  the  company,"  an  agreement  to  cancel  a 
policy  should  be  so  signed;"  although  it  cannot  be  doubted  that 
a  party  insured  might  otherwise  give  up  his  policy,  or  renounce 
all  claim  under  it,  and  that  a  valid  agreement  to  that  effect 
between  him  and  the  company  would  not  be  set  aside  for  his 
benefit,  on  the  ground  of  a  merely  formal  defect. 

1  2  Parsons  on  Contracts,  4S»  n.  (y,)  49,  n.  (z,)  55,  n.  (f) ;  Blackett  v.  Royal  Exchange 
Assurance  Co.  2  Cromjit.  &  Jerv.  244  ;  The  Schooner  Kecside,  2  Sinnncr,  Ston/,J.,  569, 
570;  Illinois  Mutual  t'ire  Ins.  Co.  v.  O'Neile,  13  Illinois,  89,  Evidence  of  usage  in 
New  York  for  the  insured  to  give  notice  of  any  increase  of  risk  by  his  act,  to  the  insurer, 
who  is  then  to  liave  the  option  of  continuing  or  annulling  the  policy,  is  inadmissible, 
for  the  double  reason  that  it  is  local,  and  would  besides  alter  the  legal  operation  and 
ertcct  of  the  policy.  Stebbins  v.  Globe  Ins.  Co.  2  Hall,  (N.  Y.)  632.  Where  the  com- 
pany promised  the  insured  that  their  directors  "shall  settle  and  pay  (to  him)  all  losses, 
within  three  months  after  notice  shall  have  been  given  as  aforesaid,"  "  and  that  the 
payment  of  tlie  loss  ascertained  shall  be  made  within  the  time  prescribed  by  the 
charter,  without  deduction  from  the  sum  decreed  by  the  charter,"  it  was  held  that 
proof  of  a  custom  or  usage  on  the  part  of  the  company,  in  case  of  a  total  loss,  to 
retain  of  the  amount  of  the  ascertained  loss,  two  per  cent,  per  month  on  the  balance  of 
the  premium  note,  from  the  date  of  the  last  assessment  upon  it,  until  the  expiration  of 
the  term  of  the  policy,  was  inadmissible,  the  cft'ect  being  to  limit  and  control  the  clear 
and  unequivocal  terms  of  an  express  contract.  Swamscot  Machine  Co.  v.  Partridge, 
5  Foster,  N.  H.  369.  But  where  the  loss  was  occasioned  by  lightning,  it  was  held  that 
the  usage  of  other  insurance  companies  restricting  their  liability  to  losses  occasioned  by 
lightning,  may  be  resorted  to  to  show  what  the  general  usage  is  in  regard  to  losses 
caused  bjjightning.  Babcock  v.  Montgomery  Mutual  Ins.  Co.  6  Barb.  637.  A  gen- 
eral usag*which  contradicts  a  settled  rule  of  commercial  law,  is  not  admissible.  Thus 
evidence  of  a  usage  in  the  city  of  New  York,  by  which  the  re-assurer  pays  the  sartle 
proportion  of  the  entire  loss  sustained  by  the  original  assured,  that  the  sum  re-insured 
bears  to  the  first  insurance  written  by  the  re-assured,  was  rejected.  Hone  v.  Mutual 
Safety  Ins.  Co.  1  Sandford,  137 ;  2  Comst.  235.  And  parol  evidence,  generally,  is  not 
admissible  to  vary  or  contradict  the  terms  of  the  policy.  Holmes  v.  Charlestown  Mu- 
tual Eire  Ins.  Co.  10  Mete.  211  ;  Finney  v.  Bedford  Commercial  Ins.  Co.  8  id.  348  ; 
Stacey  v.  Franklin  Eire  Ins.  Co.  2  W.  &  S.  506.  But  proof  of  the  enlargement  of  the 
time  of  performance  is  admissible.  Franklin  Eire  Ins.  Co.  v.  Hamill,  5  Maryland, 
170. 

^  Mason  ?,-.  Franklin  Fire  Ins.  Co.  12  G.  &  Johns.  468  ;  Stebbins  v.  Globe  Ins.  Co.  2 
Hall,  632  ;  Child  r.  Sun  Mutuq^l  Ins.  Co.  3  Sandf.  47. 

2  Head  ?>.  Providence  Ins.  Co.  2  Cranch,  127;  Beatty  v.  Marine  Ins.  Co.  2  Johns. 
109.  Where  by  the  uniform  practice  of  an  insurance  company,  a  deviation  from 
the  risk  assumed  in  the  policy  is  waived  by  the  president,  for  a  compensation  agreed 


492  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIX. 

Ill  regard  to  the  execution  of  a  fire  policy,  and  what  is  neces- 
sary to  constitute  such  execution,  —  as,  for  example,  whether 
delivery  is  necessary,  or  a  signed  raemorandum  be  sufficient,  or, 
indeed,  an  oral  bargain  only,  and  whether  this  insurance  may  be 
effected  by  correspondence,  and  if  so,  when  the  proposition  and 
assent  complete  the  contract, — we  are  not  aware  of  any  mate- 
rial diflerence,  on  any  of  these  points,  between  the  law  of  fire 
insurance  and  that  which  has  already  been  presented  as  applica- 
ble to  marine  insurance.^     It  has  been  held  in  an  action  on  a 


upon  by  him  and  by  the  assured,  the  waiver  and  assent,  with  the  terms  thereof,  arc 
written  across  the  policy,  without  any  new  signature,  and  recorded  by  the  secretary  ; 
a  contract  made  in  this  manner  is  binding  on  the  corporation.  Warner  v.  Ocean  Ins. 
Co.  16  Miiine,  439. 

1  When  the  offer  to  insure  has  been  accepted,  and  the  applicant  has  complied  with  all 
the  conditions  imposed,  the  risk  commences,  although  the  policy  has  not  been  issued. 
Thus  the  plaintiff',  having  an  interest  in  a  building,  applied  to  the  agent  of  a  mutual  com- 
pany for  an  insurance,  and  at  the  same  time  made  the  necessary  cash  payment  and  exe- 
cuted the  premium  note.  The  application  being  transmitted  to  the  company,  an  altera- 
tion in  the  building  was  directed,  and  an  authority  required  from  the  trustees  of  the 
building  to  effect  the  insurance.  This  was  communicated  to  the  plaintiff  by  the  secre- 
tary, wlio  stated  when  the  company  were  duly  certified,  that  these  had  been  complied 
with,  a  policy  would  be  sent.  The  conditions  were  complied  with,  and  the  agent  noti- 
fied, and  the  agent  recjuested  to  call  and  examine  ;  but  he  neglected  to  do  so.  It  was 
held  that  the  risk  commenced  from  the  notification  of  compliance  with  the  terms  of  the 
conditional  agreement.  Hamilton  v.  Lycoming  Ins.  Co.  5  Barr.  .3.39  ;  Andrews  v.  Es- 
sex Fire  and  Marine  Ins.  Co.  3  Mason,  6  ;  Kohne  r.  Ins.  Co.  1  Wash.  C.  C.  93  ;  Palm 
V.  Medina  Fire  Ins.  Co.  20  Ohio,  529  ;  Blanchard  v.  Waite,  28  Maine,  .51.  Where  the 
agreement  to  insure  is  complete,  equity  will  compel  the  execution  of  a  policy,  or  if  a 
loss  have  occurred,  decree  its  payment.  Perkins  r.  Washington  Ins.  Co.  4  Cowen, 
645  ;  Lightbodv  i:  North  American  Ins.  Co.  23  Wend,  18  ;  Carpenter  v.  Mutual  Safety 
Ins.  Co.  4  Sandf  Ch.  408  ;  Suydam  v.  Columbus  Ins.  Co.  18  Ohio,  459;  Neville  v.  Mer. 
and  Man.  Ins.  Co.  19  id.  452.  'Where  the  offer  of  the  company  by  letter  to  insure  is  ac- 
cepted in  due  season,  the  contract  is  complete  by  a  deposit  of  their  letter  of  accept.nnce  in 
the  mail  before  notice  of  its  withdrawal  has  been  received  by  the  other  party.  Tayloe 
V.  Merchants'  Fire  Ins.  Co.  9  Howard,  390.  The  facts  of  the  case  are  briefly  as  fojlows  : 
John  Minot,  the  agent  of  the  company  at  Fredericksburg,  at  the  request  of  Tayloe,  who 
was  about  leaving  for  Alabama,  made  application  for  an  insurance  on  his  dwelling- 
house,  to  the  amount  of  $8,000,  for  one  year.  This  application  was  dated  25th  Nov. 
1844.  A  reply  from  the  defendants  was  received,  under  the  date  30th  Nov.  1844.  On 
the  2d  Dec.  Minot  wrote  to  Tayloe,  informing  him  of  their  willingness  to  effect  the 
insurance,  stating  terms,  &c.,  and  added,  "  .Should  you  desire  to  effect  the  insurance, 
send  me  your  check,  payable  to  my  order,  for  $57,  and  the  business  is  ibncluded." 
But  in  consequence  of  a  misdirection  of  the  letter,  it  did  not  reach  Tayloe  till  the  20th. 
On  the  next  day,  the  21st,  Tayloe  mailed  a  letter,  accepting  the  terms,  and  remitting  a 
check  for  the  premium,  with  a  request  that  the  policy  should  be  deposited  in  the  bank 
for  safe-keeping.  This  letter  of  acceptance  was  received  by  Minot  on  the  31st  Dec, 
and  upon  the  1st  of  Jan.  1845,  he  wrote  to  Tayloe,  communicating  his  refusal  to  carry 
into  ctlect  the  insurance,  on  the  ground  that  his  acceptance  came  too  late,  the  house  having 
been  burned  on  the  22d  Dec.  The  company  confirmed  the  view  of  tlie  case  taken  by 
their  agent,  and  refused  to  issue  the  policy  or  pay  the  loss.  The  court  below  passed  a 
decree  that  the  case  should  be  dismissed  with  costs,  and  upon  appeal  to  the  Supreme 
Court,  it  was  held  that  the  decree  .should  be  reversed.  See,  also,  Mactier  v.  Frith,  G 
Wend,  103  ;  Hamilton  v.  Lycoming  Mutual  Ins.' Co.  5  Barr.  339  ;  Palm  v.  Medina 
Fire  Ins.  Co.  20  Ohio,  529.  The  case  of  McCullocR  v.  Engle  Ins.  Co.  1  Pick.  278, 
which  allows  the  insurer  to  retract  at  any  time  until  the  notice  of  accejitance  has.  been 
received  by  him,  is  effectually  overruled  by  the  above  cases.    But  uo  contract  subsists 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  493 

fire  policy,  as  doubtless  it  would  be  on  a  marine  policy,  that  a 
memorandum  made  on  the  application  book  of  the  company  by 
the  president,  and  signed  by  him,  was  not  binding  where  the 
party  to  be  insured  wished  the  policy  to  be  delayed  until  a  differ- 
ent adjustment  of  the  terms  could  be  settled,  and  after  some 
delay  was  notified  by  the  company  to  call  and  settle  the  busi- 
ness, or  the  company  would  not  be  bound,  and  he  did  not  call; 
because  there  was  here  no  consummated  agreement'  So,  too,  a 
subsequent  adoption  or  ratification  is  equivalent,  either  in  a  fire 
or  marine  policy,  to  the  making  originally  of  the  contract ;  with 
this  limitation,  however,  that  no  party  can,  by  his  adoption, 
secure  to  himself  the  benefit  of  a  policy,  if  it  had  not  been 
intended  that  his  interest  should  be  embraced  within  it.^  It  is 
quite  common  to  describe  the  insured  in  marine  policies,  by  gen- 
eral expressions  —  as,  "  for  whom  it  may  concern,"  or  "  for  own- 
ers," or  the  like ;  but  such  language  is  seldom  if  ever  used  in 
fire  policies,  the  insured  being  specifically  named  in  them.^ 

It  may  be  remarked  that  the  effecting  of  a  fire  insurance  is  not 
so  often  done  through  the  agency  of  a  broker,  as  that  of  marine 
insurance  ;  nor  is  it  so  usual  to  pay  nothing  down,  but  to  give  a 
note  for  the  whole  premium.  If,  however,  an  insurance  company 
has  an  express  rule  to  that  effect,  it  may  be  waived  ;  and  this 
waiver  may  be  express  or  implied,  from  the  conduct  of  officers 
of  the  company  who  have  the  right  to  act  for  it.  And  their  ad- 
missions bind  the  company.^ 

between  the  parties,  where  the  policy  issued  by  the  company  varies  from  the  offer  of 
the  appUcant.  Ocean  Ins.  Co.  v.  Carrington,  3  Conn.  357.  See  a  recent  and  interest- 
ing case  on  this  question.  Kentucky  Mut.  Ins.  Co.  v.  Jenks,  5  Porter,  (Ind.)  96,  of  which 
we  give  the  facts  and  decision  in  the  notes  to  the  chapter  on  Life  Insurance. 

1  Saudford  v.  Trust  Eire  Ins.  Co.  11  Paige,  547.  Where  written  applications  for  in- 
surance had  been  made,  and  the  rates  of  premium  agreed  upon,  and  when  tlic  policies 
were  made  out  the  applicant  refused  to  take  them  or  sign  the  deposit  notes,  and  the  pol- 
icies remained  in  the  possession  of  the  company,  it  was  held  that  there  was  no  com- 
pleted contract,  which  would  sustain  an  action  against  the  applicant  on  the  deposit 
notes.  Keal  Estate  Mut.  Eire  Ins.  Co.  v.  Roessle,  1  Gray,  (Mass.)  336;  Lindauer  ». 
Delaware  Mutual  Safety  Ins.  Co.  8  English,  (Ark.)  461.  So,  where  the  buildings  were 
burned,  while  the  proposal  of  the  company  and  the  acceptance  of  the  applicant  re- 
mained in  the  possession  of  the  agent  of  the  latter,  the  company  was  held  not  to  be 
liable.  Thayer  u.  Middlesex  Mutual  Fire  Ins.  Co.  10  Pick.  326".  Where  the  appli- 
cant is  notified  that  the  payment  of  the  premium  is  a  condition  precedent  to  the  taking 
effect  of  the  insurance,  no  contract  subsists  while  it  remains  unpaid.  Flint  v.  Ohio  Ins. 
Co.  8  Ohio,  501  ;  Berthoud  v.  Atlantic  Ins.  Co.  13  Louis.  539. 

2  De  BoUe  V.  Pennsylvania  Ins.  Co.  4  Whart.  68. 

3  De  Forest  v.  Fulton  Eire  Ins.  Co.  1  Hall,  112.  See  Alliance  Marine  Ins.  Co.  v. 
La.  State  Ins.  Co.  8  Louis.  11. 

*  In  The  Trustees  of  the  First  Baptist  Church  in  Brooklyn  and  others  v.  The  Brook- 
lyn Eire  Insurance  Company,  18  Barbour,  (S.  C.)  69,  it  was  held  that  an  insurance 

42 


494  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

SECTION   II. 
OF    THE   CONSTKUCTION   OF   POLICIES   AGAINST    FIRE. 

The  rules  of  construction  are  generally  the  same  in  reference  to 
fire  policies  as  to  marine  p,olicies.  It  is  sufficient  if  the  words  of 
the  policy  describe  the  persons,  the  location,  and  the  property, 
with  so  much  distinctness  that  the  court  and  jury  have  no  diffi- 
culty in  determining  their  identity  with  a  certainty  which  pre- 
vents any  real  and  substantial  doubt.  Perhaps  some  of  the  cases 
which  we  cite  in  our  notes  to  this  section,  will  show  that  courts 
have  gone  quite  far  enough  in  recognizing  such  description  as 
sufficient. 

In  the  construction  of  this  as  of  other  contracts,  the  intention 
of  the  parties  is  a  very  important  and  influential  guide;  but  it 
must  be  the  intention  as  expressed;  for  otherwise  a  contract 
which  was  not  made,  would  be  substituted  for  that  which  was 
made  ;  and  evidence  de  hors  the  contract  would  be  permitted  to 
vary  and  to  contradict  it'     But  even  to  this  limitation  there  are 

company  may  waive  its  pjeneral  rule  requiring  premiums  to  be  paid  before  policies  shall 
take  effect,  and  give  credit  for  a  premium  until  called  for ;  and  that  the  president  and 
secretary  of  an  insurance  company  are  the  officers  to  whom  the  preliminary  proofs  of 
loss  are  to  be  presented,  and  if,  on  being  notified  of  a  loss,  they  admit  that  they  had 
agreed  to  insure  the  propertj',  or  to  keep  it  insured,  it  is  a  statement  made  in  the  course 
of  their  duties,  and  binds  the  company  as  much  as  their  certificate  of  premium  paid, 
and  of  a  renewal,  would  bind  the  company. 

1  Where  stock  in  trade,  household  furniture,  linen,  wearing  apparel,  and  plate  were 
insured,  in  a  policy,  Lord  Elletiborcnu/k  Iield,  on  the  principle  of  noscitiir  a  sociis,  that  the 
terms  "  linen  "  must  be  confined  to  "  household  linen,'"  and  would  not  include  linen 
drapery  goods  purchased  on  speculation.  Watchorn  v.  Langford,  3  Camp.  422. 
Where  the  policy  required  that  the  houses,  buildings,  or  other  places  where  goods 
are  deposited  ancl  kept,  shall  be  truly  and  accurately  described,  and  the  place  was  de- 
scriljcd  as  the  dwelling-house  of  the  insured,  whereas  he  occupied  only  one  room  in  it, 
as  a  lodger,  this  description  was  held  sufficient,  the  condition  relating  to  the  construction 
of  the  house,  and  not  to  the  interest  of  the  parties  in  it.  Fricdlander  v.  London  Assur- 
ance Co.  1  M.  &  Eob.  171.  See  Dobson  v.  Sotheby,  1  Mood.  &  Mai.  92.  The  insur- 
ance by  an  innkeeper  against  fire  of  his  "  interest  in  the  inn  and  offices,"  does  not  cover 
the  loss  of  profits  during  the  repair  of  the  damaged  premises.  In  re  Wright,  1  Ad.  & 
El.  621  The  terms  "  stock  in  trade,"  when  used  in  a  policy  of  insurance  in  reference 
to  the  business  of  a  mechanic,  as  a  baker,  include  not  only  tlie  materials  used  by  him, 
but  the  tools,  fixtures,  and  implements  necessary  for  the  carrying  on  of  his  business,  and 
the  terms  in  question  were  held  to  have  a  broader  application  to  the  business  of  me- 
chanics than  to  that  of  merchants.  Moadingcr  v.  Mechanics'  Fire  Ins.  Co.  2  Hall,  490. 
Capstans  of  locust,  partly  prepared  for  vessels,  which  the  insured  was  building,  were 
held  to  bo  within  his  poUcy  "  on  his  stock  of  ship  timber,  including  locust,  &c." 
Webb  V.  National  Fire  Ins.  Co.  2  Sandf  497.  Where  a  policy  of  insurance  for  $1,800 
on  a  grist  mill,  and  S700  on  machinery  therein,  was  renewed  in  general  terms  for  the 
sum  of  $2,500,  without  making  any  distribution  of  the  risk,  it  was  held  that  it  was  the 
intention  of  the  parties  for  the  insurance  thereafter  to  be  without  any  distribution  of 


CH.  XIX.]  THE   LAW   OF  FIRE    INSURANCE.  495 

exceptions ;  for  if  it  appears  by  clear  and  positive  evidence, 
that  the  written  contract  docs  not  express  the  actual  and  certain 
agreement  of  the  parties,  by  reason  of  an  accidental  mistake  or 
omission  of  phraseology,  a  court  of  equity  will  correct  this  mis- 
take ;  1  and  even  courts  of  law  may  admit  evidence  of  such  mis- 
take and  treat  the  policy  as  reformed  accordingly.^  We  are  not 
aware,  however,  of  any  material  difference  in  this  respect  be- 
tween fire  policies  and  marine  policies,  and  the  law  on  this  sub- 
ject in  relation  to  them  has  already  been  stated.^  And  the  same 
remark  may  be  extended  to  the  rule  respecting  the  admission,  as 
a  part  of  the  contract,  of  a  memorandum  on  the  back  of  the 
policy,  or  attached  to  it  by  a  wafer,  and  neither  referred  to  in  the 
policy  itself,  nor  signed  by  the  insurer.* 

the  risk,  and  should  appl_y  generally  to  both  the  building  and  the  machinery.  Driggs 
V.  Albany  Ins.  Co.  10  Barb.  44(i.  The  insurance  on  "  a  ship  on  tlie  stocks  building,"  in- 
cludes the  materials  which  arc  so  far  wrouglit  as  to  be  in  a  condition  tq  be  framed,  and 
are  actually  incorporated  into  the  parts  on  the  stocks,  and  which  were  iu  a  proper 
place  to  be  conveniently  applied  to  that  use,  and  by  reason  of  such  adaptation  had 
become  valueless  for  other  purposes.  Hood  v.  Manhattan  Fire  Ins.  Co.  2  Duer,  191. 
See  Staccv  r.  Franklin  Fire  Ins.  Co.  2  W.  &«S.  545;  Mason  v.  Franklin  Ins.  Co.  12 
Gf.  &  J.  468;  Nicolet  v.  Insurance  Co.  3  Louis.  371.  Where  the  plaintift"  took 
out  a  policy  of  insurance  against  fire,  "  on  his  goods,  stock  in  trade,  &c."  the 
policy  was  held  to  cover  goods  in  stores,  bought  on  joint  account,  and  sold  for 
the  mutual  profit  of  the  insured  and  another  person,  tlie  former  being  also  in  ad- 
vance on  the  adventure.  Millaudon  v.  Atlantic  Ins.  Co.  8  Louis.  557.  An  appli- 
cation by  a  tenant  of  a  building  during  one  year,  for  an  insurance  on  "  his  building," 
is  a  good  description.  Niblo  v.  N.  Am.  Fire  Ins.  Co.  1  Saudf.  551 ;  Clarke  v.  Fire- 
mens'  Ins.  Co.  18  Louis.  431  ;  Franklin  Ins.  Co.  v.  Drake,  2  B.  Monr.  51.  A  policy 
on  an  unfinished  house  covers  materials  got  out  for  and  deposited  in  it,  but  not  mate- 
rials got  out  for  it  and  deposited  in  anotlier  building,  Ellmaker  v.  Franklin  Fire  Ins. 
Co.  5  Barr.  (Penn.)  183.  A  policy  upon  wearing  apparel,  household  furniture,  and  the 
stock  of  a  grocery,  covers  linen  sheets  and  shirts  actually  laid  in  for  family  use,  if  ex- 
hibited at  tbe  preliminary  inspection,  and  sucli  as  were  laid  in  for  sale  or  traffic  in  the 
usual  way,  in  the  store ;  but  not  such  as,  being  smuggled,  were  concealed  and  intended 
for  secret  sale.  Clary  v.  Protection  Ins.  Co.  1  Wright,  (Ohio,)  228.  In  a  policy  on  a 
store  and  stock  of  goods,  for  the  period  of  six  years,  notwithstanding  a  provision 
making  it  void  in  case  of  alienation,  it  was  held  tliat  it  would  attach  to  any  goods 
the  insured  might  have  in  the  store  at  any  time  within  the  six  years,  not  exceeding 
the  amount  insured.  Lane  v.  Maine  Mutual  Fire  Ins.  Co.  3  Fairfield,  45 ;  Hooper 
V.  Hudson  River  Fire  Ins.  Co.  15  Barb.  413.  A  policy  will  be  void  for  uncertainty, 
where  it  cannot  be  determined  to  which  of  two  buildings  it  applies,  but  where  it  evi- 
dently applies  to  one  of  tlie  two,  it  will  be  held  to  apply  to  that  one,  which,  after 
rejecting  as  surplusage  that  part  of  the  description  which  is  false  when  applied  to 
it,  is  most  clearly,  and  at  the  same  time  sufficiently,  identified.  Heath  v-  Franklin 
Ins.  Co.  1  Cush.  257. 

1  See  ante,  p.  491,  n.  1,  and  p.  494,  n.  1.  Facts  and  circumstances  outside  the  in- 
strument may  be  proved  to  show  the  intention  of  the  parties.  Stacey  v.  Franklin  Fire 
Ins.  Co.  2  W.  &  S.  547.  Extrinsic  evidence  is  admissible  to  prove  representations, 
when  they  are  referred  to  in  the  policy.     Clark  v.  Manufacturers'  Ins.  Co.  8  How.  234. 

2  Motte"ux  V.  London  Assurance  Co.  1  Atk.  545  ;  Collett  v.  Morrison,  12  Eng.  Law  & 
Eq.  171  ;  Graves  v.  Boston  Marine  Ins.  Co.  2  Cranch.  419;  Ewer  v.  Washington,  16 
Pick.  503  ;  Dow  v.  Whitten,  8  Wend.  166. 

2  See  ante,  p.  403,  sec.  1 . 

4  Moliere  v.  Pennsylvania  Fire  Ins.  Co.  5  Rawle,  342 ;  Dow  v.  Whitten,  8  Wend. 
166. 


496  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

There  is,  however,  one  very  important  difference  between  con- 
tracts of  lire  insurance,  and  those  of  marine  insurance,  as  usually 
made.  It  is  a  general  rule  with  our  mutual  insurance  compa-x 
nies,  that  every  one  who  is  insured  becomes  a  member  of  the 
company.  Indeed,  the  principle  upon  which  this  kind  of  insur- 
ance rests,  is  that  all  the  insured  insure  each  other.  Every  in- 
sured person  is,  then,  an  insurer  of  all  the  rest,  as  they  are  of 
him.  And  it  follows,  necessarily,  that  every  insured  party  is 
bound  by  all  the  laws  and  rules  of  the  company,  as  by  laws  and 
rules  of  his  own  making.^  This  would  be  equally  true  of  marine 
policies  as  of  fire  policies.  There  is,  however,  this  difference  in 
practice.  The  mutual  fire  insurance  companies,  by  a  law  or  rule 
which  is  perhaps  universal,  require  that  an  application  should  be 
made  in  writing ;  and  this  written  application  is  after  a  peculiar 
form,  prescribed  by  the  rules.  It  always  contains  certain  definite 
statements,  which  relate  to  those  matters  which  effect  the  risk  of 
fire  importantly.  In  each  form  of  application  sundry  questions  are 
put,  which  are  quite  numerous  and  specific,  and  are  those  which 
experience  has  suggested  as  blst  calculated  to  elicit  all  the  infor- 
mation needed  by  the  insurers,  for  the  purpose  of  estimating 
accurately  the  value  of  the  risk  they  undertake.  Specific  answers 
must  be  given  to  all  these  questions.  And  this  application,  with 
all  these  statements,  questions,  and  answers,  is  expressly  referred 
to  in  the  policy,  and  made  a  part  of  the  contract ;  ^  and  a  distinct 
reference  to  such  a  paper  might  of  itself  incorporate  it  with  the 
contract,  without  any  words  declaring  it  to  be  a  part  thereof,^ 

'  Pawon  V.  Barnevelt,  1  Doug.  12,  note  4  ;  Bize  v.  Fletcher,  id.  13,  note.  A  paper 
purporting  to  be  "  conditions  of  insurance,"  if  annexed  to  and  delivered  with  a  fire 
policy,  is  deemed,  prima  facie,  a  part  of  it,  although  the  policy  do  not  contain  any 
express  reference  to  such  paper.  Roberts  v.  Chenango  Co.  Mutual  Ins.  Co.  3  Hill, 
501 ;  Murdoch  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst.  210;  Sexton  v.  Montgom- 
ery Co.  Mutual  Ins.  Co.  9  Barb.  201. 

^  Susquehanna  Ins.  Co.  v.  Perrine,  7  W.  &.  S.  348 ;  Holmes  r.  Charlestown  Mutual 
Fire  Ins.  Co.  10  Mete.  211  ;  Smith  v.  Bowditch  Mutual  Fire  Ins.  Co.  6  Cush.  448; 
McMahon  v.  Portsmouth  Mutual  Fire  Ins.  Co.  2  Foster,  15. 

^  Where  the  policy  insures  certain  property  as  described,  or  more  particularly  de- 
scribed on  the  application,  such  a  reference  is  not  sufficient  to  make  the  application  a 
part  of  the  policy  and  give  it  the  effect  of  a  wan-anty,  and  it  is  sufficient  if  it  be  not  false 
in  any  material  point.  Jefferson  Ins.  Co.  ii.  Cotheal,  7  Wend.  72;  Snyder  v.  Farmers' 
Ins.  Co.  13  Wend.  92;  S.  C.  16  id.  481;  Delonguemare  v.  Tradesmens'  Ins.  Co.  2 
Hall,  611 ;  Stebbins  v.  Globe  Ins.  Co.  2  id.  632  ;  Burritt  v.  Saratoga  Co.  Mutual  Fire 
Ins.  Co.  5  Hill,  190;  Wall  v.  Howard  Ins.  Co.  14  Barb.  383;  Insurance  Co.  ?-'.  South- 
ard, 8  B.  Monr.  634.  But  see  Sillem  v.  Thornton,  26  Eng.  L.  &  Eq.  238.  Where  the 
application  is  referred  to  "  as  forming  a  part  of  the  policy,"'  it  will  have  the  effect  of  a 
warranty.  Burritt  v.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  5  Hill,  188;  Williams  v.  N. 
E.  Mutual  Fire  Ins.  Co.  31  Maine,  224  ;   Murdock  v.  Chenango  Co.  Mutual  Ins.  Co. 


CII.  XIX.]  THE   LAW    OP    FIRE   INSURANCE.  497 

• 

if  this  reference  imported  that  the  contract  was  based  upon  the 
paper.  If  such  a  paper  be  referred  to,  the  court  will  inquire  into 
the  purpose  of  the  reference  ;  and  it  has  been  said  that  any  con- 
ditions so  referred  to  would  be  taken  to  be  a  part  of  the  policy ; 
but  that  the  application  itself  was  merely  for  the  purpose  of  de- 
scribing and  identifying  the  property.^  It  is  common  to  state  in 
the  printed  part  of  the  formal  application  that  it  is  made  on  such 
and  such  conditions ;  and  these  usually  follow  those  statements 
which  are  deemed  the  most  material  in  estimating  the  risk. 
These  would  be  considered  as  technical  conditions,  and  therefore 
the  substantial  truth  of  all  of  them  is  a  condition  precedent  to  any 
right  of  indemnity  in  the  insured  party .^ 

Sometimes  there  is  no  distinct  application  in  writing,  but  the 
policy  itself  states  the  facts  relied  upon.  For  this  purpose  it 
contains  many  blanks,  which  are  filled  up  according  to  the  cir- 
cumstances of  each  case.  It  may  happen  that  what  is  written 
in  yiese  places  may  be  inconsistent  with  what  is  printed  ;  and 
then  it  is  a  general  rule  that  what  is  written  prevails,  as  that  is 
more  immediately  and  specifically  the  act  of  the  parties,  and 
may  be  supposed  to  express  their  precise  purpose  better  than  the 
printed  phrases  which  were  prepared  without  especial  reference 
to  this  case.3  But  this  rule  would  not  be  applied  where  it  would 
obviously  operate  injustice. 

2  Conist.  210  ;  Sexton  v.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  200 ;  Kennedy  v. 
St.  Lawrence  Co.  Mutual  Ins.  Co.  10  Barb.  285  ;  Egan  v.  Mutual  lus.  Co.  5  Denio, 
326  ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  1  Selden,  469. 

'  Where,  in  the  policy,  this  clause  occurred,  "reference  being  had  to  the  application 
of  A  B  for  a  more  particular  description  of  the  conditions  annexed,  as  forming  a 
part  of  this  policy,"  Beardskij,  J.,  said :  "  The  conditions  are  thus  undoubtedly  made  a 
part  of  the  contract  of  insurance  ;  as  much  so  as  if  embodied  in  the  policy.  But  it  is 
otherwise  with  the  application.  That,  as  it  seems  to  me,  is  referred  to  for  the  mere 
purpose  of  describing  and  identifying  the  property  insured,  and  not  to  incorporate  its 
statements  into  the  policy  as  parts  thereof."  Trench  v.  Chenango  Co.  Mutual  Ins.  Co. 
7  Hill,  124.  But,  contra,  Jennings  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Denio,  75.  In 
Sheldon  v.  Hartford  Tire  Ins.  Co.  22  Conn.  235,  where  the  policy  referred  to  the  sur- 
vey in  these  words  :  "  Reference  is  had  to  survey  No.  83,  on  file  at  the  office  of  the  Pro- 
tection Insurance  Company,"  and  the  survey  consisted  of  answers  to  questions,  some 
of  which  were  intended  to  draw  forth  a  minute  description  of  the  premises,  and  others 
to  enable  the  insurer  to  estimate  the  risk,  it  was  held  that  the  reference  to  the  survey 
was  not  merely  for  a  fuller  description,  but  for  the  purpose  of  incorporating  all  the 
survey  into  the  policy. 

2  Wood  'v.  Hartford  Fire  Ins.  Co.  13  Conn.  533 ;  Egan  v.  Mutual  Ins.  Co.  5  Denio, 
326  ;  Farmers'  Ins.  Co.  v.  Snyder,  16  Wend.  481.  The  proposals  and  conditions  attached 
to  a  policy  form  part  of  the  contract,  and  have  the  same  force  and  effect  as  if  contained 
in  the  body  of  the  policy.     Duncan  v.  Sun  Fire  Ins.  Co.  6  Wend.  488. 

3  Robertson  v.  French,  4  East,  136,  per  Lord  EUenborough,  C.  J. ;  Alsager  v.  St. 
Katharine's  Dock  Co.  14  M.  &  W.  794  ;  Coster  v.  Phoenix  Ins.  Co.  2  Wash.  C.  C.  51  ; 
Cushman  v.  N.  W.  Ins.  Co.  34  Maine,  487. 

42* 


498  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XIX. 

• 

It  is  also  usual  in  fire  insurance,  to  put  upon  the  policy  itself 
a  scale  of  premiums,  as  calculated  upon  different  classes  of 
buildings,  of  stocks  in  trade,  or  other  property,  in  conformity  with 
what  is  thought  to  be  the  greater  or  less  risk  of  fire  in  each  case. 
This  is  a  matter  of  special  importance;  and  if  a  statement  were 
made  by  an  applicant  which  put  his  building  or  property  into  a 
class  of  which  the  risk  and  premium  were  less  than  for  the  class 
to  which  the  building  or  property  actually  belonged,  and  in  that 
way  an  insurance  was  effected  at  such  less  premium,  the  policy 
would  undoubtedly  be  void,  although  the  false  statement  were 
made  innocently.^ 

When  certain  trades  or  occupations,  or  certain  uses  of  build- 
ings, or  kinds  and  classes  of  property,  are  enumerated  as  "  haz- 
ardous," or  otherwise  specified  as  peculiarly  exposed  to  risk,  the 
rule  Expressio  iinius,  exclusio  est  alterius,  is  applied,  and  some- 
times with  severity.  This  is  better  illustrated  by  marine  insur- 
ance ;  but  the  same  rule  would  be  applied,  for  the  same  reason 
and  in  the  same  way  to  cases  of  fire  insurance.^ 

If  the  printed  conditions  represent  one  class  of  buildings,  or 

1  Fowler  v.  JEtna  Fire  Ins.  Co.  6  Cowen,  673 ;  S.  C.  7  Wend.  273 ;  Wood  v.  Hart- 
ford Fire  Ins.  Co.  13  Conn.  533;  Nawcastle  Fire  Ins.  Co.  v.  Macmorran,  3  Dow,  255. 
In  this  case,  it  was  held  that  whether  the  misrepresentation  was  material  or  not,  whether 
the  risk  on  the  one  hand  was  as  great  as  on  the  other,  were  questions  which  had  nothing 
to  do  with  the  case.     But  see  Farmers'  Ins.  and  Loan  Co.  v.  Snyder,  16  Wend.  481. 

"  N.  Y.  Equitable  Ins.  Co.  v.  Langdon,  6  Wend.  623,  627,  Sutherland,  J. :  "  It  was 
an  express  provision  of  the  policy  in  this  case,  that  if  the  building  insured  should  at 
any  time  during  the  continuance  of  the  policy,  be  appropriated,  applied,  or  used,  to  or 
for  the  purpose  of  carrying  on,  or  exercising  therein  any  trade,  business,  or  vocation, 
denominated  hazardous,  or  extra-hazardous,  or  specified  in  the  memorandum  of  special 
rates  in  tlie  proposals  annexed  to  the  policy,  or  for  the  purpose  of  storing  therein  any 
of  the  articles,  goods,  or  merchandise,  in  the  same  proposals  denominated  hazardous 
or  extra-hazardous,  or  included  in  the  memorandum  of  special  rates,  the  policy  should 
cease,  and  be  of  no  force  or  effect.  The  trade  or  business  of  a  grocer  is  not  mentioned 
or  specified  in  the  proposals  annexed  to  the  jjolicy.  It  was  not,  therefore,  a  prohibited 
trade.  Expressio  unins,  exclusio  est  alterius.  The  enumeration  of  certain  trades,  or 
kinds  of  business,  as  prohibited  on  the  ground  of  being  hazardous,  is  an  admission  that 
all  other  kinds  are  lawful  under  the  contract.  The  case  of  Baker  v.  Ludlow,  2  Johns. 
Cas.  288,  is  precisely  in  point.  There  dried  fish  wei'C  enumerated  in  the  memoi"andum 
clause  as  free  from  average,  and  all  other  articles  perishable  in  their  own  nature.  It 
was  held  that  the  naming  of  one  description  of  fish  implied  that  other  fish  were  not 
intended ;  and  that  the  subsequent  words,  '  all  other  articles  perishable  in  their  own 
nature,'  were  not  applicable  to  the  articles  previously  enumerated,  and  did  not  repel 
the  implication  arising  from  the  enumeration  of  them.  In  Doe,  ex  dem.  Pitt  v.  La- 
ming, 4  Camp.  76-7,  Lord  Ellenhorough  held  that  a  coffee-house  was  not  an  inn,  within 
the  meaning  of  a  policy  of  insurance  against  fire,  enumerating  the  trade  of  an  inn- 
keeper with  others,  as  double  hazardous,  and  not  covered  by  the  policy.  If  the  busi- 
ness of  a  grocer  is  not  prohibited  under  the  policy,  the  ordinary  incidents  of  that  busi- 
ness, it  would  seem,  were  allowable;  not  being  ])rohibited,  the  party  had  a  right  to  keep 
a  grocery-store,  and  to  conduct  it  in  the  usual  manner.  The  cases  of  Suckley  s.Furse, 
15  Johns.  R.  342,  and  Kensington  v.  Inglis,  8  East,  273,  sanction  this  principle." 


en.  XIX.]  THE   LAW    OF   FIRE   INSURANflfe.  499 

goods  or  property,  as  more  hazardous  than  another,  it  could  not 
be  competent  for  the  insured  to  prove  by  other  testimony  that  it 
was  not  so  in  fact.'  Moreover,  a  description  of  the  property 
insured,  as  it  is  a  description  for  a  contract  on  time,  is  held  to 


1  Newcastle  Fire  Ins.  Co.  Macmorran,  3  Dow,  255 ;  Farmers'  Iris.  Co.  v.  Snyder, 
16  Wend.  490;  Richards  v.  Protection  Ins.  Co.  30  Maine,  273.  It  was  held  in  Westfall 
V.  Hudson  lliver  Fire  Ins.  Co.  2  Ducr,  490,  that  where  a  clause  in  a  policy  of  insurance 
against  fire,  declared  that  "  camphenc,"  &c.,  when  used  in  stores  or  warehouses  as  a 
light,  subjects  the  goods  therein  to  an  additional  charge  of  ten  cents  per  hundred  dol- 
lars, and  permission  for  such  use  must  be  indorsed  on  the  policy,  that  tiie  words  were 
not  a  conditional  prohibition  of  the  use  of  camphcne,  but  merely  exempted  the  insurers 
from  liability  for  a  loss  resulting  from  such  use,  unless  the  additional  charge  had  been 
paid.  A  late  case  in  England,  overrules  the  doctrine  which  has  been  asserted  tii^'C  on  the 
authority  of  earlier  cases,  that  if  there  be  an  insurance  against  fire  upon  a  house  which 
is  described  in  the  policy  as  being  of  a  particular  specified  description,  and  in  which  it 
is  stated  that  the  occupier  carries  on  a  certain  specified  trade  —  this  being  true  at  the 
date  of  the  policy,  the  assured  preserving  the  identity  of  the  house,  may  alter  its  con- 
struction, so  as  to  render  it  more  exposed  to  fire,  and  may  carry  on  in  it  a  different  and 
more  dangerous  trade,  without  prejudice  to  the  right  to  recover  for  a  subsequent  loss  by 
fire,  the  warranty  extending  only  to  the  state  and  use  of  the  premises  at  the  moment 
wlien  the  policy  was  signed.  A  fire  policy  was  procured  for  one  year  on  a  "  brick 
building  used  as  a  dwelling-house  and  store,  (described  in  a  paper  attached  to  this 
policy,)  situated  at,  &e.  The  description  annexed,  stated  that  the  house  was  composed 
of  two  stories  of  given  height,  and  materials  with  a  given  roof,  and  given  means  of 
obtaining  water,  &c.  During  the  year,  the  house  was  altered  by  adding  to  it  an  addi- 
tional story,  but  so  that  the  alterations  did  not  increase  tiie  hazard  or  probability  of 
fire,  except  so  far,  if  it  all,  as  the  increase  of  the  area  of  the  building  by  a  third  story 
may  be  considered  to  have  necessarily  increased  such  hazard,  or  probability ;  and,  after- 
wards, during  the  year,  the  house  was  totally  burned.  It  was  held  that  the  underwriter 
was  not  liable ;  for  the  description  was  by  reference  incorporated  into  the  policy  and 
amounted  to  a  warranty  not  only  that  the  building  was  as  described  at  the  time  the 
description  was  given  and  at  the  date  of  the  policy,  but  that  it  would  not  be  altered  by 
the  assured  so  as  to  increase  tlie  risk  during  the  year,  and  that  it  had  been  so  altered. 
Sillem  w.  Thornton,  26  Eng.  Law  and  Eq.  (C.  B.)  238,243.  Lord  Cumpbell,  C.  J.: 
•'  But  we  are  further  of  opinion  that  the  description  in  the  policy  amounts  to  a  warranty 
that  the  assured  would  not,  during  the  time  specified  in  tlae  policy,  voluntarily  do  any 
thing  to  make  the  condition  of  the  building  vary  from  this  description,  so  as  thereby 
to  increase  the  risk  or  liability  of  the  underwriter.  In  this  case,  the  description  is  evi- 
dently the  basis  of  the  contract,  and  is  furnished  to  the  underwriter  to  enable  him  to 
determine  whether  he  will  agree  to  take  the  risk  at  all,  and  if  he  does  take  it,  what 
premium  he  shall  demand.  The  assured,  no  doubt,  wished  him  to  understand,  that  not 
only  such  was  the  condition  of  the  premises  when  the  policy  was  to  be  effected,  but,  as 
far  as  depended  upon  them,  it  should  not  be  altered  so  as  to  increase  the  risk  during 
the  year  for  which  he  was  to  be  liable  if  a  loss  should  accrue.  Without  such  assurance 
and  belief,  the  statement  introduced  into  the  policy  of  the  existing  condition  of  the 
premises,  would  be  a  mere  delusion.  Identity  might  continue,  and  yet  the  ciuality,  con- 
dition, and  incidents  of  the  sulyect-matter  insured  might  be  so  changed  as  to  increase 
tenfold  the  chances  of  loss,  which,  upon  a  just  calculation,  might  reasonably  be  expec- 
ted to  fall  upon  the  underwriter.  Can  it  be  successfully  contended  that,  luiving  done 
so,  the  assured  retain  a  right  to  the  indemnity  for  which  they  had  stipulated  upon  a 
totally  ditterent  basis  1  With  respect  to  marine  policies,  we  conceive  that  if  there  be  a 
warranty  of  neutrality,  or  of  any  other  matter  which  continues  of  importance  till  the 
risk  determines,  whether  the  policy  be  for  a  voyage  or  for  a  time  certain,  such  a  war- 
ranty is  continuous ;  and  if  it  be  broken  by  the  default  of  the  assured,  the  underwriter 
is  discharged.  The  implied  warranty  of  seaworthiness  applies  only  to  the  commence- 
ment of  the  voyage  ;  but  even  here,  if  the  assured,  during  the  voyage,  were  voluntarily 
to  do  any  act  whereby  the  ship  was  rendered  unseaworthy,  and  thereby  a  loss  were  to 
accrue,  we  conceive  that  they  would  have  no  remedy  on  the  policy.  A  distinction, 
however,  is  taken  in  this  respect  between  marine  policies  and  insurances  of  houses 


500 


Ml 


ELEMENTS   OF  MERCANTILE   LAW. 


[CH.  XIX. 


amount  to  an  agreement  that  the  property  shall  continue  within 
the  class  where  it  is  put,  or  at  least  shall  not  enter  into  another 
that  is  declared  to  be  more  hazardous,  during  the  operation  of 
the  policy.!     There  must,  however,  be  a  rational,  and  perhaps  a    ■! 


against  lire.  It  would  probably  be  allowed  that,  if  during  the  war  there  were  a  policy 
on  a  merchant  ship  described  as  carrying  ten  guns,  and  employed  in  the  coal  trade, 
and  after  the  policy  was  effected,  the  owner  should  reduce  her  armament  to  five  guns, 
or  load  her  with  oil  of  vitriol,  the  midcrwriter  would  not  be  liable  for  a  subsequent  loss. 
But  it  is  strenuously  asserted  that,  if  there  be  an  insurance  against  fire  upon  a  house, 
which  is  described  in  the  policy  as  being  of  a  particular  specified  description,  and  in 
which  it  is  stated  that  the  occupier  carries  on  a  certain  specified  trade  —  this  being  true 
at  the  date  of  the  policy,  the  assured,  preserving  the  identity  of  the  house,  may  alter 
its  construction,  so  as  to  render  it  more  exposed  to  fire,  and  may  carry  on  in  it  a  difi'er- 
ent  and  more  dangerous  trade,  witliout  prejudice  to  the  right  to  i-ecover  for  a  subse- 
quent loss  by  fire,  the  warranty  extending  only  to  the  state  and  use  of  the  premises  at 
the  moment  when  the  policy  was  signed.  This  seems  quite  contrary  to  the  principles 
on  which  contracts  are  regulated.  The  construction  and  use  of  tiie  premises  insured, 
as  described  in  the  policy,  constitute  the  basis  of  the  insurance,  and  determine  the 
amount  of  the  premium.  I3ut  this  calculation  can  only  be  made  upon  the  supposition 
that  the  description  in  the  policy  shall  remain  substantially  true  while  the  rislc  is  run- 
ning, and  that  no  alteration  shall  subsequently  he  made  by  the  assured  to  enhance  the 
liability  of  the  insurer.  It  seems  strange,  then,  that  if  a  house  be  described  in  the 
policy  as  occupied  by  the  owner,  carrying  on  the  trade  of  a  butcher,  so  that  the  jire- 
mium  is  on  the  lowest  scale,  he  may  immediately  afterwards,  merely  taking  care  that 
the  walls  and  floor  and  roof  remain,  so  that  it  is  still  the  same  identical  house,  convert 
it  into  a  manufactory  of  fire-works,  a  trade  trebly  hazardous,  for  which  the  highest 
scale  of  premium  would  be  no  more  than  reasonable  for  the  stipulated  indemnity.  .  . 
Now,  assuming  the  law  to  be  that,  upon  an  insurance  against  fire  there  is  an  implied 
engagement,  that  the  assured  will  not  afterwards  alter  the  premises  so  as  that  they 
shall  not  agree  with  the  description  of  them  in  the  policy,  and  so  that  thereby  the  risk 
and  liability  of  the  insurer  shall  be  increased,  we  have  only  to  consider  whether,  in  this 
instance,  the  assured  have  not  done  so  by  converting  the  house  insured  from  '  a  house 
composed  of  two  stories '  into  a  house  composed  of  three  stories  ;  and,  this  really 
admits  of  no  reasonable  doubt.  Mr.  Bramwell  very  candidly  admitted  that,  if  the 
policy  remained  in  force  after  the  alteration,  it  covered  the  third  story,  as  well  as  the 
other  two.  This  being  so,  the  increase  of  the  area  of  the  building  by  a  third  story, 
must  be  considered  l)y  the  court  to  have  necessarily  increased  the  hazard  or  probaljility 
of  fire  about  as  much  as  if  the  addition  to  the  house  had  been  lateral  instead  of  vertical." 
In  Pim  V.  Rcid,  6  Man.  &  Gran.  1,  where  the  policy  was  effected  on  condition  that  if 
any  person  shall  insure  liis  goods  or  buildings,  and  cause  the  same  to  be  described 
otherwise  than  thfey  really  are,  to  the  prejudice  of  the  company,  or  shall  misrepresent  or 
omit  to  communicate  any  circumstance  which  is  material  to  be  made  known  to  the 
company  in  order  to  enable  them  to  judge  of  the  risk  they  have  undertaken,  or  are 
required  to  undertake,  such  insurance  shall  be  of  no  force ;  it  was  held  that  this  condi- 
tion was  to  be  referred  to  the  time  when  the  policy  was  cfiected,  and  that  in  the 
absence  of  fraud,  neither  by  the  general  law  of  insurance  nor  by  such  condition,  was 
the  policy  avoided  by  the  circumstance  that,  subsequently  to  eflfecting  the  policy,  a  more 
hazardous  trade  had,  without  notice  to  the  company,  been  carried  on  upon  the  premises. 
1  Where,  in  a  policy  insuring  a  stock  of  dry  goods,  it  is  provided  that  the  policy 
shall  be  void,  if  "  the  risk  shall  be  increased  by  any  means  whatever  within  the  control 
of  the  assured ;  or  if  such  building  or  premises  shall,  with  the  consent  of  the  assured, 
be  occupied  in  any  way  so  as  to  render  the  risk  more  hazardous  tlian  at  the  time  of 
insuring."  And  among  the  articles  denominated  hazardous,  is  cotton  in  bales  ;  yet  if 
cotton  in  bales  is  merely  kept  for  sale  as  a  part  of  the  stock  of  dry  goods,  it  does  not 
vitiate  the  policy,  unless  the  jury  should  find  that  the  keeping  of  such  cotton  increases 
the  risk.  Moore  v.  Protection  Ins.  Co.;29  Maine,  97.  Where,  in  a  policy  of  insurance, 
on  sundry  buildings,  they  were  described  as  barns,  to  which  this  clause  was  added  :  "All 
the  above-described  barns  are  used  for  hay,  straw,  grain  unthreshed,  stabling,  and 
shelter,"  and  on  the  trial  after  proof  of  a  loss  by  fire,  it  appeared  that  on  the  day  pre- 


CH.  XIX.]  TUE  LAW  OF  FIRE  INSURANCE.  501 

liberal  construction  of  this  rule.  Thus,  it  does  not  apply  where 
a  single  article,  or  one  or  two,  are  kept  in  a  store  as  a  part  of  the 
stock  of  goods,  although  that  article,  as  cotton  in  bales,  is  among 
those  enumerated  as  hazardous.^    But  if  the  building  is  generally 

ceding  the  night  of  the  fire,  the  insured  Iiad  caused  about  two  bushels  of  lime  and  six 
or  eight  pails  of  water  to  be  placed  in  a  tub  standing  in  a  room  generally  used  for 
keeping  therein  unthreshed  corn,  in  one  of  the  barns,  for  the  j)urpose  of  preparing  the 
lime  for  rolling  in  it  some  wheat  which  he  was  about  to  sow  on  his  farm  ;  that  a  short 
time  previous  to  the  fire,  he  had  commenced  the  painting  of  his  house,  and  his  painter 
had  mixed  the  paints  in  the  same  room,  and  at  the  time  of  the  fire,  there  was  in  it  an 
oil  barrel  containing  about  a  gallon  of  oil,  a  keg  of  white  lead,  and  a  pot  with  about 
a  pint  of  mixed  paint ;  that  in  anotlier  bijilding  described  in  the  polic_y  as  used  in  part 
for  a  cider  mill,  the  insured,  before  and  after  the  execution  of  the  policy,  had  been  in 
the  habit  of  repairing  his  farming  utensils,  and  had  also  made  in  it  a  bee-hive,  and 
planed  some  boards  for  a  room  in  his  house ;  but  a  day  or  two  before  the  fire,  the  build- 
ing had  been  cleared  out,  leaving  nothing  in  it  but  some  apples  ;  it  was  held  :  1.  That " 
the  clause  relating  to  the  use  of  the  building  insured,  was  not  a  warranty  that  they 
should  be  used  in  that  manner  and  in  no  other,  but  was  inserted  merely  for  the  purpose 
of  designating  the  buildings  insured,  and  not  to  limit  their  use  or  deprive  the  insured 
of  the  enjoyment  of  his  property  in  the  same  manner  as  buildings  of  that  description 
are  generally  used  and  enjoyed.  2.  That  the  acts  of  the  insured,  so  far  as  they  were  »r 
could  have  been  the  cause  of  the  loss,  were  in  accordance  with  the  ordinary  use  of 
such  buildings  by  farmers.  Billings  v.  Tolland  Co.  Mutual  Fire  Ins.  Co.  20  Conn. 
139. 

1  N.  Y.  Equitable  Ins.  Co.  w.  Langdon,  6  "Wend.  623,  627,  Sutherland,  J. :  "  The  only 
question  then  is,  whether  the  keeping  of  oil  or  spirituous  liquors  in  the  store,  under 
the  circumstances  disclosed  in  the  case,  was  appropriating  or  using  the  building  for  the 
purpose  of  storing  those  articles  within  the  meaning  of  the  policy.  Every  thing  that 
was  kept  either  in  the  store  or  cellar,  was  kept  for  the  purpose  of  being  retailed.  The 
smaller  vessels  in  the  store  were  replenished  from  the  larger  ones  in  the  cellar,  which 
consisted,  at  the  time  of  the  fire,  of  one  cask  of  oil,  one  barrel  of  rum,  one  cask  of 
Jamaica  spirits,  and  one  pipe  of  gin;  from  all  of  which  more  or  less  had  been  drawn 
for  tlie  use  of  the  store.  It  appears  to  me  that  the  word  storing  was  used  by  the  parties 
in  this  case  in  the  sense  contended  for  by  the  plaintiff,  viz. :  a  keeping  for  safe  custody, 
to  be  delivered  out  in  the  same  condition,  substantially,  as  when  received  ;  and  applies 
only  where  storing  or  safe-keeping  is  the  sole  or  principal  object  of  the  deposit,  and 
not  where  it  is  merely  incidental,  and  the  keeping  is  only  for  the  pui'pose  of  consump- 
tion. If  I  send  a  cask  of  wine  to  a  warehouse  to  be  kept  for  me,  that  is  a  storing  of 
it;  but  if  I  put  it  into  my  cellar  or  my  garret  to  be  drawn  off  and  drank,  I  apprehend 
the  term  would  not  be  considered  as  applying.  Suppose  all  the  varieties  of  wine  wei-e 
denominated  hazardous  by  the  various  insurance  companies,  and  the  storing  of  them 
was  prohibited  in  their  policies;  could  it  possibly  apply  to  the  private  stock  which  a 
gentleman  might  keep  in  his  own  house,  for  his  own  use  and  consumption  ?  It  certainly 
would  be  perverting  the  temi  from  its  ordinary,  and  generally  received  acceptation." 
See  1  Hall,  226.  It  was  held,  in  that  case,  that  the  word  "  storing"  applies  only  where 
the  storing  or  safe-keeping  is  the  sole  or  principal  object  of  the  deposit,  and  not  where 
it  is  merely  incidental  and  the  keeping  is  only  for  the  purpose  of  consumption.  This 
definition  has  been  adopted  by  the  courts.  Thus,  where  oils  and  turpentine,  which 
were  classed  among  hazardous  or  extra-hazardous  articles,  were  introduced  for  the  ])ur- 
pose  of  repairing  and  painting  the  dwelling  insured,  and  the  dwelling  was  burned 
while  being  so  repaired,  the  insurers  were  held  liable.  O'Niel  v.  Buffalo  Fire  Ins.  Co. 
3  Comst.  122;  Lounsbury  v.  Protection  Ins.  Co.  8  Conn.  459.  Where  a  policy  of 
insurance  contained  a  clause  suspending  the  operation  of  the  policy  in  case  the  premises 
should  be  appropriated,  applied,  or  used  to  or  for  the  purpose  of  storing  or  of  keeping  ■ 
therein  any  of  the  articles  described  hazardous,  one  of  the  buildings  insui'ed  being 
occupied  by  a  card  machine,  it  was  held  that  the  mere  fact  that  a  small  quantity  of 
undressed  flax,  (although  a  hazardous  article,)  had  been  ])ermitted  to  remain  in  the 
basement  of  the  carding-machine  building,  since  the  removal  of  the  fiax-dressing  ma- 
chinery from  such  basement  a  few  days  prior  to  the  issuing  of  the  policy,  was  not  con- 


502  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIX. 

appropriated  to  a  more  hazardous  occupation  than  the  proposals 
or  the  policy  indicate,  or  if  the  jury  find  that  the  introduction 

elusive  evidence  that  tlie  l)uikling  was  appropriated,  applied,  or  used  for  storing  or 
keeping  llax  witliin  the  meaning  of  those  terms  as  used  in  the  policy,  and  that  leaving 
the  small  pile  of  undressed  flax  in  the  building,  with  no  purpose  of  having  it  i-egularly 
stored  or  kept  there,  would  not  contgivene  the  terras  of  the  policy.  Parker^  J.,  dis- 
sented, l)('ing-of  opinion  that  the  case  came  within  tlie  term  "keeping,"  introduced  into 
the  policy.  Hynds  v.  Schenectady  Co.  Mutual  Ins.  Co.  16  Barb.  119.  The  keeping 
of  spirituous  'liquors  in  the  building  insured,  for  the  purposes  of  consumption  or  sale 
by  retail  to  boarders  and  others,  is  not  a  storing  within  the  meaning  of  the  policy. 
Kafterty  v.  New  Brunswick  Fire  Ins.  Co.  3  Harrison,  480.  See  Williams  v.  New  Eng- 
land Fire  Ins.  Co.  31  Maine,  225  ;  Allen  y.  Mutual  Fire  Ins.  Co.  2  Maryland,  125  ; 
Billings  r.  Tolland  Co.  Mutual  Fire  Ins.  Co.  20  Conn.  139  ;  Duncan  v.  Sun  Fire  Ins. 
Co.  6  Wend.  488.  In  England,  there  is  not  complete  harmony  in  the  decisions.  The 
earliest  ease  is  Dobson  v.  Sotheby,  1  Mood.  &  Malk.  90.  The  policy  was  effected  on 
premises  "  wherein  no  fire  is  kept  and  no  liazardous  goods  are  deposited,"  and,  provided 
that  "  if  buildings  of  any  description  insured  with  the  company,  shall  at  any  time  after 
"sucli  insurance  be  made  use  of  to  store  or  warehouse  any  hazardous  goods  "  without 
leave  from  the  comjiany,  the  policy  should  be  forfeited."  These  words  were  held  to 
mean  the  habitual  use  of  fire  or  the  ordinary  deposit  of  hazardous  goods,  not  their 
occasional  introduction  for  a  temporary  purpose  connected  with  the  occupation  of  the 
premises,  so  that  the  policy  was  not  vitiated  by  bringing  a  tar  barrel  and  lighting  a 
fire  in  order  to  effect  repairs,  in  consequence  of  which  the  loss  occurred.  Where  the 
premises  insured  were  a  granary  and  a  "  kiln  for  drying  corn  in  use,"  and  the  policy  was 
to  be  forfeited  imless  the  buildings  were  accurately  described  and  the  trades  caa-ricd  on 
therein  specified,  it  was  held,  although  proved  that  a  higher  premium  was  exacted  for  a 
bark  kiln  than  a  malt  kiln,  and  that  the  latter  was  more  dangerous,  and  the  loss  hap- 
pened from  the  use  of  the  kiln  in  drying  the  bark,  that  a  temporary  and  gratuitous 
permission  to  a  friend  to  dry  bark  in  the  kiln,  did  not  avoid  the  policy.  Shaw  v.  Kob- 
berds,  G  A.  &  E.  75  ;  see  Barrett  v.  Jermy,  3  Exch.  535.  The  authority  of  these  cases  has 
been  diminished  by  a  recent  decision  of  the  Court  of  Exchequer,  under  a  condition  pro- 
viding that,  in  case  any  steam-engine,  stove,  &c.,  or  any  other  description  of  fire-heat  be 
introduced,  notice  thereof  must  be  given,  and  every  such  alteration  must  be  allowed  by 
indorsement,  and  any  further  premium  which  the  alteration  may  occasion,  must  be 
paid,  otherwise  no  benefit  will  arise  to  the  assured  in  case  of  loss.  The  assured,  who 
was  a  cabinet-maker,  placed  a  small  engine  on  the  premises  with  a  boiler  attached,  and 
used  it  in  a  heated  state  for  the  purpose  of  turning  a  lathe,  not  in  the  course  of  his 
business,  but  for  the  purpose  of  ascertaining  by  experiment  whether  it  was  worth  his 
while  to  buy  it  to  be  used  in  that  business ;  and  after  the  engine  had  been  on  the 
premises  for  several  days,  a  fire  happened.  It  was  lield  that  the  policy  was  avoided,  and 
that  whetlier  the  engine  was  introduced  for  experiment  as  an  approved  means  of  carry- 
ing on  the  plaintiff's  business;  whether  used  for  a  longer  or  shorter  time,  or  whether 
the  fire  was  occasioned  by  the  working  of  the  steam-engine  or  not,  were  immaterial 
questions.  Glen  v.  Lewis,  8  Exch.  607.  See  20  Eng.  L.  &  Eq.  364,  Parke,  B. :  "  Now 
the  clause  in  question  implies,  that  the  simple  introduction  of  a  steam-engine,  without 
having  fire  applied  to  it,  will  not  affect  tlie  policy;  but  if  used  with  fire  heat,  it  will; 
and  nothing  being  said  about  the  intention  of  the  parties  as  to  tlie  particular  use  of  it, 
and  as,  if  it  be  used,  the  danger  is  precisely  the  same,  with  whatever  object  it  is  used, 
it  seems  to  us  that  it  makes  no  difference  whether  it  is  used  upon  trial  with  the  intent  of 
ascertaining  whether  it  will  succeed  or  not,  or  as  an  approved  means  of  carrying  on  the 
plaintiff's  business,  nor  does  it  make  any  difference  that  it  is  used  for  a  longer  or  a 
shorter  time.  The  terms  of  the  conditions  apply  to  tlie  introduction  of  a  steam-engine 
in  a  heated  state  at  anj-  time,  Axithout  notice  to  the  companj-,  so  as  to  afford  an  oppor- 
tunity to  them  to  ascertain  whether  it  will  increase  the  risk  or  not.  The  clause  pro- 
ceeds to  provide  that  every  such  alteration  must  be  allowed  by  indorsement  on  the 
policy,  and  the  premium  paid,  and  if  not,  no  benefit  will  arise  to  the  insured  in  case 
of  loss.  The  expression  '  alteration '  is  inaccurate ;  but  it  obviously  means  to  em- 
brace all  the  circumstances  before  mentioned,  though  all  are  not,  properly  speaking, 
alterations.  This  appears  to  be  the  natural  and  ordinary  construction  of  this  part  of 
the  contract,  and  it  is  far  from  unreasonable.  In  such  cases,  which  are  unquestionably 
likely  to  increase  the  risk,  the  company  stipulate  for  notice  in  clear  terms,  in  order  that 


CII.  XIX.]  THE   LAW   OF   FIRE  INSURANCE.  503 

of  these  goods  materially  increased  the  actual  risk,  evidence 
would  be  received  as  to  the  intention  of  the  parties  to  the  con- 
tract. And  the  true  meaning  of  the  contract  and  the  intent  of 
the  parties  would  be  considered.  Tlius,  where  the  "  storing"  of 
certain  goods  was  prohibited,  as  "  hazardous"  —  it  was  held  that 
the  having  a  pipe  or  two  of  such  articles  in  the  cellar,  from  which 
smaller  vessels  in  the  store  were  replenished,  did  not  comeAvithin 
the  meaning  of  the  word  "storing"  in  the  policy,  any  more  than 
would  the  keeping  of  such  articles  for  home  consumption,  in  a 
dwelling-house  insured  by  a  similar  policy.'  So  a  description  of 
a  house  as  "  at  present  occupied  as  a  dwelling-house,  but  to  be 
hereafter  occupied  as  a  tavern,  and  privileged  as  such,"  is  only 
permission  that  it  should  be  a  tavern',  and  creates  no  obligation 
to  occupy  and  keep  it  as  a  tavern  on  the  part  of  the  insured. 
But  if  the  language  is,  "  to  be  occupied  as  so  or  so,  but  not "  in 

they  may  consider  whether  they  will  continue  their  liability,  and  on  what  terms.  There 
is  not  a  word  to  confine  the  introduction  of  the  steam-engine  to  its  intended  use  as  an 
instrument  or  auxiliary  in  carrying  on  the  business  in  the  premises  insured.  If  a  con- 
struction had  already  been  put  on  the  clause  precisely  similar  in  any  decided  case,  we 
should  defer  to  that  authority.  But,  in  truth,  there  is  none.  All  the  cases  upon  this 
subject  depend  upon  the  construction  of  different  instruments,  and  there  is  none  precisely 
like  this.  Indeed,  it  seems  not  improbable  that  the  terms  of  this  policy  have  been 
adopted,  as  suggested  by  Sir  F.  Thesigcr,  to  prevent  the  effect  of  previous  decisions ; 
the  provision  '  that  no  description  of  fire-heat  shall  be  introduced '  in  consequence  of 
the  ruling  of  Lord  Tenterdon,  in  Dobson  r.  Sotheby,  1  Moo.  &  M.  90;  and  the  addition 
of  '  process  or  operation '  to  trade  or  business,  to  prevent  the  application  of  that  of 
Shaw  V.  Robberds,  6  Ad.  «&  El.  75.  The  latter  case  is  the  only  one  which  approaches 
the  present.  One  cannot  help  feeling  that  the  construction  of  the  policy  in  that  case 
may  have  been  somewhat  influenced  by  the  apparent  hardship  of  avoiding  it,  by  reason 
of  the  accidental  and  charitable  use  of  the  kiln,  the  subject  of  the  insurance.  The 
court  considered  the  conditions  in  that  case  to  refer  to  alterations,  either  in  the  building 
or  the  business,  and  to  those  only.  Here  the  introduction  of  steam-engines,  or  any 
other  description  of  fire-heat,  is  specifically  pointed  at,  and  expressly  provided  for.  If, 
in  that  case,  the  condition  had  been  {inter  alia,)  that  no  bark  should  be  dried  in  the 
kiln,  without  notice  to  the  company,  which  would  have  resembled  this  case,  we  are  far 
from  thinking  that  the  court  could  have  held  that  the  drying  which  took  place  did  not 
avoid  the  policy,  by  reason  of  being  an  extraordinary  occurrence  and  a  charity.  We 
are,  therefore,  of  opinion  that  the  defendant  is  entitled  to  our  judgment,  and  that  the 
material  part  of  the  second  plea  is  proved."'  See  Sillem  v.  Thornton,  26  Eng.  L.  &  Eq. 
244.  Where  there  was  a  warranty  that  a  mill  should  be  "  worked  by  day  only,"  it  was 
held  not  broken  by  the  working  of  part  of  the  mill  by  night.  Mayall  v.  Mitford,  6  Ad. 
&  El.  670 ;  Whitehead  v.  Price,  2  C  M.  &  R.  447. 

1  Catlin  I'.  Springfield  Fire  Ins.  Co.  1  Sumner,  434,  440.  Where  the  premises  were 
described  in  tlie  application  and  policy  as  occupied  by  A  B  as  a  private  dwelling,  this 
was  held  not  to  be  a  warranty  of  the  continuation  of  the  occupation  during  the  risk, 
and  the  insurers  were  liable,  although  the  loss  happened  after  the  occupant  had  left  the 
premises  vacant.  O'Niel  v.  Buffalo  Fire  Ins.  Co.  3  Comst.  122 ;  Ralferty  v.  New 
Brunswick  Fire  Ins.  Co.  3  Harrison,  480.  In  this  case  it  was  held  that  it  is  not  a  viola- 
tion of  a  policy  of  insurance  that  a  house  insured  as  a  dwelling-house,  was  afterwards 
occupied  as  a  boarding-house,  if  boarding-houses  are  not  in  the  list  of  prohibited  occupa- 
tions. A  change  of  tenants,  the  policy  being  silent  on  the  subject,  does  not  invalidate 
it,  though  the  first  tenant  may  be  a  prudent,  and  the  second  a  grossly  careless  man. 
Gates  V.  Madison  Co.  Mutual  Ins.  Co.  1  Selden,  469. 


504  ELEMENTS    OF    MERCANTILE   LAW.  [CH.   XIX. 

some  other  certain  way,  this  restriction  is  a  part  of  the  bargain  ; 
and  if  they  are  so  occupied,  the  insurers  are  discharged.  So  if 
the  premises  are  described  as  "  a  private  residence,"  the  insurance 
is  not  avoided  by  the  fact  that  the  occupants  moved  out  of  the 
house,  leaving  it  vacant,  and  not  the  "  residence  "  of  any  one, 
unless  the  jury  find  that  the  risk  was  thereby  materially  increased.' 
But  where  the  property  was  represented  as  a  "  tavern  barn,"  and 
the  insured  permitted  its  occupation  as  a  livery  stable,  an  expert 
was  permitted  to  testify  that  a  livery-stable  was  materially  more 
hazardous  than  a  tavern  barn.  And,  on  this  ground,  the  policy 
was  held  to  be  discharged,  although  the  keeper  of  the  livery- 
stable  was  removable  at  the  pleasure  of  the  insured.^ 

The  general  subject  of  alterations  of  property  under  insurance 
against  fire,  is  not  without  difficulty.  On  the  whole,  however, 
we  are  satisfied  that  mere  alterations,  although  expensive  and 
important,  do  not  necessarily  and  per  se  avoid  the  insurance  or 
discharge  the  insurers.  But  that  they  have  this  effect,  if  they  are 
found  by  the  jury  to  increase  the  risk  materially ;  or  if  they  are 
specifically  prohibited  in  the  policy,  for  this  amounts,  in  the  one 
case,  to  an  agreement  by  the  parties  that  they  shall  be  considered 
as  increasing  the  risk,  and  in  the  other,  as  a  promise  by  the 
insured  that  they  shall  not  be  made.^ 

Still  other  questions  may  arise  where  material  alterations  are 
made,  all  of  which  are  not  easily  disposed  of.  The  following  are 
instances.  Suppose  one  gets  his  dwelling-house  insured  for  seven, 
years,  truly  describing  it  as  having  a  shingled  roof.  After  two 
or  three  years  he  determines  to  take  off  the  shingles,  but  says 
nothing  to  the  insurers  about  it.  If  he  now  puts  on  slates,  or  a 
metallic  covering  which  does  not  require  soldering,  he  does  not 
increase  the  risk,  nor  is  the  work  of  putting  on  the  new  covering 

1  Hobby  V.  Dana.  17  Barb.  S.  C.  Eep.  111. 

2  Where  a  building  insured  by  a  company  was  represented  at  the  time  of  effecting 
the  insurance,  as  connected  with  another  building  on  one  side  only,  and  before  the  loss 
happened  it  became  connected  on  two  sides,  the  policy  was  held  not  to  be  avoided 
unless  the  risk  thereby  became  greater.  Stetson  v.  Mass.^Mutual  Fire  Ins.  Co.  4  Mass. 
330 ;  per  Sewall,  J.,  337-339.  And  whether  such  alterations  increased  the  risk,  is  a 
question  for  the  jury.  Curry  v.  Commonwealth  Ins.  Co.  10  Pick.  535.  The  following 
cases  sustain  the  doctrine  that  an  alteration  which  increases  the  risk  avoids  the  policy. 
Jones'  Manufacturing  Co.  v.  Manufacturers'  Mutual  Fire  Ins.  Co.  8  Cush.  82;  Perry 
Co.  Ins.  Co.  V.  Stuart,  19  Penn.  State,  45;  Jefferson  Co.  Ins.  Co.  v.  Cotheal,7  Wend. 
72 ;  Grant  v.  Howard  Ins.  Co.  5  Hill,  10 ;  Allen  v.  Mutual  Fire  Ins.  Co.  2  Maryland, 
125,  128.     See  Sillem  v.  Thornton,  26  Eng.  L.  &  Eq.  238. 

3  Young  V.  Washington  Co.  Mut.  lus.  Co.  14  Barb.  S.  C  545. 


CH.  XIX.]  THE  LAW  OF  FIRE  INSURANCE.  505 

hazardous,  and  we  see  no   grounds   for  its  having  any  efTect  on 
the  policy.     But  suppose  the  new  metallic  covering  is  secured  by 
soldering.     This  is  certainly  a  hazardous  operation.     And  if  the 
building  takes  fire  in  consequence  of  this  operation,  the  insurers 
are  certainly  discharged.     If  the  operation  is  conducted  safely 
through,  and  the  work  is  entirely  finished,  we  consider  it  clear 
that  this  greater  hazard  for  a  time  has  no  effect  whatever  on  the 
policy  after   that  time,  and  after  all  the  greater  hazard  has  ex- 
pired.    But  let  us  suppose  that  while  this  operation  is  going  for- 
ward, and  the  house  is  thereby  certainly  exposed  to  an  increase 
of  risk,  the  house  is   set  on  fire  by  an  incendiary  —  without  the 
slightest  reference  to  this   alteration  —  and  burns  down.     It  is 
not,  perhaps,  settled  either  by  authority  or  practice,  whether  the 
insurers  be  or  be  not  discharged.     We  are,  however,  of  opinion 
that  the  principles  of  insurance  would  lead  to  the  conclusion  that, 
if  the  house  be  burned  from  a  perfectly  independent  cause,  during 
an  increase  of  risk  incurred  in  good  faith,  the  insurers  are  not 
thereby  discharged.   It  is  however  certain  that  it  is  always  prudent 
to  obtain  the  consent  of  the  insurers  to  any  proposed  alteration. 
If  such  consent  be  asked,  and  refused,  we  do  not  see  that  the  in- 
surers stand  on  any  better  footing,  or  the  insured  on  any  worse 
one ;  and  if  the  alterations  are  made  and  a  loss  occurs,  we  should 
say  that  the  insurers  would  not,  generally  at  least,  be  discharged, 
unless  they  would   have  been,    had  the   alteration    been  made 
without  their  knowledge.     For  if  they  have  a  right  to  object  or 
refuse,  it  could  only  be  because  the  contract  in  effect  prohibited 
this  alteration  ;    and  then  their  refusal  was  not  wanted  for  their 
defence.     And  if  they  have  no  right  to  refuse,  they  can  acquire 
no  rights  by  the  refusal. 

If  the  alteration  be  of  a  permanent  character,  and  causes  a 
material  increase  of  the  danger  of  fire,  then  it  is  a  substantial 
breach  of  contract ;  and  we  should  hold  that  the  insurers  were 
discharged  as  soon  as  the  alteration  was  made,  and  indeed  as 
soon  as  the  making  of  it,  or  preparations  for  it,  as  scaffolding  or 
carpenter's  work,  materially  increased  the  risk.  And  they  are 
.  discharged  equally,  whether  the  fire  be  caused  by  the  alteration, 
or  by  the  work  done,  or  by  some  wholly  independent  matter. 

But  where  an  application  for  insurance  upon  a  dwelling-house 
described  a  store  owned  by  the  applicant,  situated  near  the  house, 
43 


506  ELEMENTS   OF   MERCANTILE   LAW.  [CH.    XIX. 

and  the  policy  contained  no  prohibition  against  the  rebuilding  of 
the  store,  and  when  it  was  burned  the  owner  rebuilt  the  same,  and 
in  doin"'  so  a  fire  occurred  in  the  store  which  communicated  to 
and  destroyed  the  house,  but  there  was  no  negligence  on  the 
part  of  the  insured,  the  insurers  were  held,  because  the  insured 
had   the  right  of  rebuilding  the  store,  using  proper  precautions.^ 

We  apprehend  further,  that  the  insured  retains  his  right  to 
keep  his  buildings  in  good  repair;  and  indeed,  it  is  rather  his 
duty,  or  at  least  for  the  interest  of  the  insurers,  that  he  should  do 
so.  For  any  condition  of  disrepair,  would  tend,  more  or  less 
strongly,  to  increase  the  risk  of  fire,  if  only  by  causing  a  general 
neglect  or  lowering  the  class  of  occupants.  The  insured,  there- 
fore, may  repair  without  especial  leave,  and  the  insurers  are  liable 
although  the  fire  take  place  while  the  repairs  are  going  on ;  and 
even  if  it  be  caused  by  the  repairs  ;  and  so  they  would  be  if  this 
cause  might  seem  to  come  within  the  express  prohibition  of  the 
policy,  if  it  were  introduced  merely  for  repair,  and  the  prohibition 
should  be  construed  as  intended  to  prevent  a  general  employment 
of  the  buildings  in  a  hazardous  way.  Thus,  a  condition  avoiding 
the  policy  "  if  the  buildings  at  any  time  after  the  insurance  be 
made  use  of  to  store  or  warehouse  any  hazardous  goods,''  did 
not  discharge  the  insurers  of  a  barn  burned  from  the  boiling  over 
of  a  tar-barrel  brought  within  it  for  the  purpose  of  repair.'^  It 
may  be  added  that  our  fire  policies  now  in  use  frequently  give 
the  insured  the  right  of  keeping  the  property  in  repair. 

In  England,  fire  policies  are  often  made  with  a  right  of  renewal, 
and  nmny  questions  have  risen  there  under  this  right.^  We  are 
not  aware  of  any  such  cases  or  any  such  practice  in  this  country. 
But  it  is  generally  understood,  and  sometimes  agreed,  that  if  a 
fire  policy  be  renewed,  there  shall  be  no  charge  for  the  new  policy. 

1  Young  V.  Washington  Co.  Mut.  Ins.  Co.  14  Barb.  S.  C  545. 

2  Dobson  V.  Sotheby,  1  Mood.  &  Malk.  90.  Where  a  fire  policy  was  conditioned  to 
become  void  if  the  building  insured  should  be  used  for  the  purpose  of  carrying  on  or 
exercising  any  trade,  business,,  or  vocation  denominated  hazardous  or  extra-hazardous, 
or  specified  in  the  memorandum  of  special  rates,  and  the  memorandum  referred  to 
mentioned  among  other  things,  "  houses,  building  or  repairing,"  it  was  held  that  these 
words,  taken  in  connection  with  the  policy,  must  be  understood  in  reference  to  carrying 
on  the  trade  of  house- building,  or  house-repairing,  in  or  about  the  building  insured, 
and  that  they  did  not  apply  to  repairs  made  upon  the  building  itself.  Grant  v.  Howard 
Ins.  Co.  5  Hill,  10  ;  O'Niel  v.  Buffalo  Ins.  Co.  3  Comst.  122;  Jolly  v.  Baltimore  Equi- 
table Society,  1  Har.  &  Gill,  295 ;  Allen  v.  Mutual  Fire  Insurance  Co.  2  Maryland, 
125-128;  Lounsbury  Protection  Ins.  Co.  8  Conn.  459;  Billings  v.  Tolland,  20  id. 
139. 

2  1  Beaumont  on  Insurance,  ch.  3. 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  ,507 

And  it  has  been  held,  where  the  policy  was  under  seal,  and  was 
renewed  several  times  by  indorsement,  that  the  renewals  were 
equivalent  only  to  new  orders  for  insurance  assented  to,  and  did 
not  constitute  new  policies.^ 


SECTION  III. 

OF  THE  INTEREST  OF  THE  INSURED. 

As  to  what  interest  in  the  insured  is  sufficient  to  support  an 
insurance,  the  principle  is  the  same  in  fire  as  in  marine  insurance. 
Any  legal  interest  is  sufficient.  And  if  it  be  equitable  in  the 
sense  that  a  Court  of  Equity  will  recognize  and  protect  it,  that  is 
sufficient;^  but  a  merely  moral,  or  expectant  interest  is  not 
enough.^     Hence,  one  who  has   made  only  an  oral  bargain  with 

1  Luciani  v.  American  Fire  Ins.  Co.  2  Whart.  167. 

2  Tyler  v.  ^tna  Fire  Ins.  Co.  12  Wend.  507  ;  S.  C.  16  id.  385 ;  Swift  v.  Vt.  Mutual 
Fire  Ins.  Co.  18  Vt.  305.  A  purchaser  of  a  house  and  lot  in  possession  under  a  writ- 
ten contract,  who  has  made  a  partial  payment  and  repaired  the  premises,  has  an  insur- 
able interest.  McGivney  v.  Phoenix  Fire  Ins.  Co.  1  Wend.  85.  Where  a  moiety  of  a 
building  insured  by  a  company,  was  conveyed  in  fee,  the  grantor  reserving  a  term  of 
seven  j'ears  therein,  and  the  grantee  immediately  reconveyed  the  same  to  the  grantor 
on  mortgage,  and  the  mortgagee  demised  them  to  the  mortgagor  and  another  for  seven 
years,  reserving  rent,  it  was  held  that  the  company  was  liable  in  case  of  loss,  notwith- 
standing such  conveyances.  Stetson  v.  Mass.  Mutual  Fire  Ins.  Co.  4  Mass.  330  ;  see 
Morrison  v.  Tennessee  Marine  &Fire  Ins.  Co.  18  Missouri,  262.  Where  a  party  holds 
the  legal  title,  and  the  equitable  title  is  in  another,  he  has  an  insurable  interest.  Thus, 
where  one  has  made  an  agreement  for  the  sale  of  his  real  estate  insured,  but  has  not 
made  a  conveyance  nor  received  the  purchase-money,  his  interest  in  the  property  and 
policy  is  not  thereby  parted  with  so  as  to  bar  his  right  of  action  on  the  happening  of  a 
loss.  Perry  Co.  Ins.  Co.  v.  Stewart,  19  Penn.  State,  45.  A  vendor  of  real  estate,  after 
articles  of  agreement  and  before  conveyance,  may  insure  the  full  value  of  the  buildings, 
and  where  the  policy  is  in  form  an  insurance  on  the  buildings,  it  is  prima,  facie  an  insur- 
ance on  the  whole  legal  and  equitable  estate,  and  not  upon  the  balance  of  the  pur- 
chase-money unpaid.  Insurance  Co.  v.  Updegraif,  21  Penn.  State,  513.  Personal 
property,  after  being  insured  against  fire,  was  sold  by  the  insurer,  and  but  part  of  the 
purchase-money  being  paid,  it  was  agreed  between  the  vendor  and  vendee  that  the  ven- 
dor was  to  retain  possession  of  the  property  and  of  the  policies  of  insurance,  till  he 
was  paid  in  full.  The  property  was  destroyed  by  fire  before  payment  in  full,  and  on  an 
attachment  and  execution  against  the  vendor  by  a  creditor,  the  claims  against  the  in- 
surance companji-were  attached  ;  it  was  held  that  such  a  possession  was  good  as  between 
parties  to  the  sale ;  in  favor  of  creditors  of  the  vendor,  the  goods  might  be  treated 
as  his ;  as  against  the  insurance  companies  the  vendor  was  to  be  considered  the  owner 
to  the  extent  of  the  unpaid  purchase-money.  That,  notwithstanding  his  sale,  the  vendor 
still  possessed  an  insurable  interest,  and  he  or  his  creditor  was  entitled  to  recover  the 
amount  pavable  under  the  policies  of  insurance.  Norcross  v.  Insurance  Companies, 
17  Penn.  State,  429. 

2  Lucena  v.  Craufurd,  2  B.  &  P.  N.  R.  324,  per  Lord  Eldon.  One  has  no  insurable 
interest  in  a  house  erected  on  land  of  another  without  license  or  shadow  of  title. 
Sweeny  v.  Franklin  Fire  Ins.  Co.  20  Penn.  State,  337.  ''  But  he  has  an  insurable  interest 
if  his  house  was  placed  on  another's  land  with  the  owner's  consent."  Fletcher  v.  Com- 
monwealth Ins.  Co.  18  Pick.  419.     A  party  has  no  insurable  interest  on  goods  for 


508  ELEMENTS"  OF   MERCANTILE   LAW.  [CH.  XIX. 

another  to  purchase  his  house,  cannot  insure  it;  but  if  there  be  a 
valid  contract  in  law,  or  if  by  writing,  or  by  part  performance,  it 
is  enforcible  in  equity,'  the  purchaser  may  insure.  So  he  may 
although  there  be  a  stipulation,  the  breach  of  which  has  made 
the  contract  void  by  its  terms,  if  the  other  party  might  waive  the 
condition  and  enforce  the  contract.^  So,  if  a  debtor  assign  his 
property  to  pay  his  debts,  he  has  an  insurable  interest  in  it  until 
the  debts  are  paid,  or  until  the  property  be  sold.  This  was  so 
held  where  it  appeared  that  the  property  would  pay  the  debts  and 
leave  a  surplus  for  the  assignor;  but  we  should  expect  the  same 
ruling  where  this  was  not  the  case,  although  in  this  instance  there 
had  been  previously  a  verdict  for  the  plaintiff  and  a  new  trial  for 
want  of  evidence  of  such  surplus.^ 

A  mortgagor  may  insure  the  whole  value  of  his  property,  even 
after  the  possession  has  passed  to  the  mortgagee,  if  the  equity 
of  redemption  be  not  wholly  gone.*     So  he  may  if  his  equity  of 

which  he  has  made  an  oral  contract,  where  the  sales  of  such  goods  is  within  the  Statute 
of  Frauds.  Stockdale  v.  Diinlop,  6  M.  &  Wels.  224.  It  is  held  in  Ohio  that  a  stock- 
holder in  an  incorporated  company  has  no  insurable  interest  in  its  property.  Phillips 
V.  Knox  Co.  Mutual  Ins.  Co.  20  Ohio,  174. 

1  See  ante,  p.  507,  n.  2. 

2  Columbian  Ins.  Co.  v.  Lawi-ence,  2  Peters,  25,  Marshall,  C.  J. :  "  That  an  equitable 
interest  may  be  insured  is  admitted.  We  can  perceive  no  reason  which  excludes  an 
interest  held  under  an  executory  contract.  While  the  contract  subsists,  the  person 
claiming  under  it  has  undoubtedly  a  substantial  interest  in  the  property.  If  it  be 
destroyed,  the  loss  in  contemplation  of  law,  is  his.  If  the  purchase-money  be  paid,  it 
is  his  in  fact.  If  he  owes  the  purchase-money,  the  property  is  its  equivalent,  and  is  still 
valuable  to  him.  The  embarrassment  of  bis  affairs  may  be  such  that  his  debts  may 
absorb  all  his  property ;  but  this  circumstance  has  never  been  considered  as  proving  a 
want  of  interest  in  it.  The  destruction  of  the  property  is  a  real  loss  to  the  person  in 
possession,  wlio  claims  title  under  an  executory  contract,  and  the  contingency  that  his 
title  may  be  defeated  by  subsequent  events  does  not  prevent  this  loss.  We  perceive  no 
reason  why  he  should  not  be  permitted  to  insure  against  it.  The  cases  cited  in  argu- 
ment, and  those  summed  up  in  Phillips  on  Insurance,  26,  on  insurable  interest,  and 
1  Marshall,  104,  c.  4,  and  2  Marshall,  787,  c.  11,  prove,  we  think,  that  any  actual  inter- 
est, legal  or  equitable,  is  insurable."     S.  C.  10  id.  507. 

^  Lazarus  v.  Commonwealth  Ins.  Co.  19  Pick.  81  ;  S.  C.  5  id.  76.  A  person  dis- 
charged by  the  Insolvent  Debtors'  Court  as  an  insolvent  debtor,  effected  an  insui'ance 
on  some  property  acquired  by  him  before  the  insolvency.  The  property  having  been 
destroyed  by  fire,  the  order  for  his  discliarge  was  afterwards  annulled  on  the  ground 
of  fraud,  and  he  was  adjudged  to  imprisonment.  In  a  suit  on  the  policy,  he  was  held 
to  have  an  insurable  interest.  Marks  v.  Hamilton,  9  Eng.  Law  &  Eq.  503 ;  S.  C.  7  Exch. 
323,  Alderson,  B. :  "  The  insolvent,  having  the  possession  of  the  property,  is  responsible 
for  it  to  the  assignees  ;  then  why  may  he  not  insure  it."  Pollock,  C.  B.:  "We  are  all 
clearly  of  opinion  that  as  lie  was  in  possession  as  the  apparent  owner,  i-esponsible  to 
those  who  were  the  real  owners,  he  had,  under  those  circumstances,  an  insurable  interest." 
See  Dadmun  Manuf.  Co.  v.  Worcester  Mut.  Fire  Ins.  Co.  11  Met.  429. 

*  Columbian  Ins.  Co.  v.  Lawrence,  2  Pets.  25  ;  Traders'  Ins.  Co.  v.  Robert,  9  Wend. 
404  ;  S.  C.  17  id.  631  ;  Tillou  v.  Kingston  Fire  Ins.  Co.  7  Barb.  570 ;  Stetson  v.  Mass. 
Mutual  Fire  Ins.  Co.  4  Mass.  330 ;  Locke  w.  North  American  Ins.  Co.  13  id.  66,  67. 
A  mortgagee  may  insure  the  property  to  secure  his  claim.  Wheeling  Ins.  Co.  v.  Mor- 
rison, 11  Leigh.  362,  363  ;  King  v.  State  Mutual  Fire  Ins.  Co.  7  Cush.  1 ;  Allen  v.  Mut. 
Fire  Ins.  Co.  2  Maryland,  111. 


CH.    XIX.]  THE   LAW    OF   FIRE   INSURANCE.  509 

redemption  is  seized  on  execution,  or  even  sold,  so  long  as  he  may 
still  redeem.^  And  in  case  of  loss  he  recovers  the  whole  value 
of  the  building  if  he  be  insured  to  that  amount.^ 

A  mortgagor  and  a  mortgagee  may  both  insure  the  same  prop- 
erty, and  neither  need  specify  his  interest,  but  simply  call  it  his 
property.  The  mortgagee  has  an  interest  only  equal  to  his  debt, 
and  founded  upon  it ;  and  if  the  debt  be  paid,  the  interest  ceases, 
and  the  policy  is  discharged  ;  and  he  can  recover  no  more  than 
the  amount  of  his  debt.^  And  if  a  house,  insured  by  a  mort- 
gagee, were  damaged  by  fire,  even  considerably,  or  perhaps  de- 
stroyed, it  might  be  doubted,  on  what  we  should  think  good 
grounds,  whether  he  could  recover,  if  it  were  proved  that  the  re- 
maining value  of  the  premises  mortgaged,  was  certainly  more 
than  sufficient  to  secure  his  debts,  and  all  reasonably  possible 
interest,  cost,  and  charges.*  Whether  he  can  hold  what  he  thus 
receives  from  the  insurers,  and  also  recover  his  debt  from  the 
debtor,  we  have  considered  in  the  chapter  on  Marine  Insurance. 
We  will  only  say,  that  while  recent  decisions  have  thrown  much 
doubt  upon  this  question,  we  are  still  of  opinion  that  he  cannot 
hold  both  ;  and  that  the  insurers  should  generally  be,  in  some 
way,  subrogated  to  his  rights  against  the  debtor,  for  the  amount 
which   they   pay  to   him.     The  question   might  possibly   arise, 

'  Strong  V.  Manufacturers'  Ins.  Co.  10  Pick.  40  ;  Miltenberger  ?;.  Beacom,  9  Barr. 
199. 

2  Jackson  v.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  422  ;  Traders'  Ins.  Co.  v.  Robert, 
9  Wend.  404;  S.  C.  17  id.  631. 

'^  Motley  V.  Manuf.  Ins.  Co.  29  Maine,  337  ;  Carpenter  v.  Providence  Washington 
Ins.  Co.  16  Peters,  495  ;  Wilson  v.  Hill,  3  Met.  66;  Macomber  v.  Cambridge  Mutual 
Fire  Ins.  Co.  8  Cushing,  133. 

*  Smith  V.  Ins.  Co.  17  Penn.  State,  260.  Per  Gibson,  J. :  "  The  interest  of  a  mort- 
gagee is  a  special,  but  an  insurable  one,  and  it  may,  at  his  option,  be  insured  gener- 
ally or  specially; — generally,  when  he  says  nothing  about  his  mortgage,  and  insures  as 
the  entire  owner ;  and  specially,  when  the  nature  of  his  interest  is  specified  in  a  memo- 
randum. By  the  first,  he  pays  a  premium  proportional  to  the  risk  of  the  absolute  own- 
ership ;  by  the  second,  a  premium  proportional  to  the  risk  of  a  less  and  derivative 
ownership.  In  the  one  case,  and  in  the  other,  the  subject  of  the  insurance  is  the  corpus 
of  the  thing  insured,  but  actually  the  interest  of  the  party  assured  in  it.  If  the  abso- 
lute owner  be  insured,  he  recovers  the  full  value  of  the  thing  lost,  because  his  interest 
in  it  is  commensurate  with  its  value ;  if  the  owner  of  a  limited  interest  in  it  is  insured, 
he  recovers  only  to  the  extent  of  his  interest.  Each  may  insure  separately,  and  recover 
separately,  pro  interesse  sui.  A  policy  of  insurance  has  been,  from  the  beginning,  a 
rude  and  indigested  instrument,  whose  legal  effect,  moulded  by  usage  and  judicial  de- 
cision, is  different  from  a  strict  interpretation  of  it.  As  the  words  of  an  execution  are 
frequently  controlled  with  us  by  an  indorsement,  so  are  the  words  of  a  policy  fre- 
quently conti'oUed  by  a  memorandum.  Notwithstanding  the  form  of  the  contract, 
therefore,  a  mortgagee  insures,  whether  generally  or  specially,  not  the  ultimate  safety  of 
the  whole  of  the  property,  but  only  so  much  of  it  as  may  be  enough  to  satisfy  his 
mortgage.  It  is  not  the  specific  property  that  is  insured,  but  its  capacity  to  pay  the 
mortgage  debt.     In  eifect,  the  security  is  insured." 

43* 


510  ELEMENTS   OF   MERCANTILE   LAAV.  [CH.  XIX. 

whether  the  debtor  could  compel  or  require  him  to  enforce  his 
claims  against  the  insurers,  and  then  consider  the  debt  paid 
thereby,  for  his  benefit ;  but  we  should  hold,  very  confidently, 
that  he  could  not.i 

It  has  been  held,  for  strong  reasons,  that  if  a  mortgagor  is 
bound  by  his  contract  with  the  mortgagee  to  keep  the  premises 
insured  for  the  benefit  of  the  mortgagee,  and  does  keep  them  in- 
sured, the  mortgagee  has  an  equitable  interest  in  or  lien  upon 
the  proceeds  of  the  policy.^ 

1  It  was  held  in  White  v.  Brown,  2  Cashing,  412,  that  if  a  mortgagee  in  possession  for 
condition  broken,  insnre  his  interest  in  the  premises  without  any  agreement  therefor  be- 
tween him  and  the  mortgagor,  and  a  loss  accrnes,  which  is  paid  to  the  mortgagee,  the 
mortgagor,  on  a  bill  to  redeem  and  an  account  stated  for  the  purpose,  is  not  entitled  to 
have  the  amount  of  such  loss  deducted  from  the  mortgagee's  charges  for  repairs.  There 
was  no  privity  in  law  or  fact  between  the  mortgagor  and  mortgagee  in  the  contract  of  in- 
surance, and  if  the  mortgagee  gets  his  interest  insured,  and  receives  the  amount  of  the 
insurance  under  his  policy,  it  does  not  aftect  his  claim  against  the  mortgagor.  The 
two  claims  are  wholly  distinct  and  independent.  Gushing  v.  Thompson,  34  Maine, 
496.  In  King  v.  State  Mutual  Fire  Ins.  Co.  7  Gushing,  1,  it  was  held,  that  a  mort- 
gagee, who,  at  his  own  expense,  insures  his  interest  in  the  property  mortgaged  against 
loss  by  fire,  without  particularly  describing  the  nature  of  his  interest,  is  entitled,  in 
case  of  loss  by  tire  before  payment  of  the  mortgage  debt,  to  recover  the  amount  of  the 
loss  from  the  insurers  to  his  own  use,  without  first  assigning  his  mortgage,  or  any  part 
thereof,  to  them.  In  an  elaborate  opinion,  the  court  maintain  that,  notwithstanding 
respectable  authorities  to  the  contrary,  when  a  mortgagee  causes  insurance  to  be  made 
for  his  own  benefit,  paying  the  premium  from  his  own  funds,  in  case  a  loss  occurs  be- 
fore his  debt  is  paid,  he  has  a  rigiit  to  receive  the  total  loss  for  his  own  benefit ;  that  he 
is  not  bound  to  account  to  the  mortgagor  for  any  part  of  the  money  so  recovered,  as 
part  of  the  mortgage  debt ;  it  is  not  a  payment,  in  whole  or  in  part ;  but  he  has  still  a 
right  to  recover  his  whole  debt  of'  the  mortgagor.  And  so,  on  the  other  hand,  when 
the  debt  is  tints  paid  by  the  debtor,  the  money  is  not,  in  law  or  equity,  the  money  of 
the  insurer,  who  has  thus  paid  the  loss,  or  money  paid  to  his  use.  The  court,  in  a 
note,  cite  the  case  of  Dobson  v.  Land,  8  Hare,  216,  reviewed  in  13  Law  Reporter,  247  : 
"  The  question  there  was  upon  the  branch  of  the  proposition,  whether  a  mortgagee  in 
possession,  on  stating  his  account  under  a  bill  to  redeem,  had  a  right  to  charge  premi- 
ums of  insurances  obtained  by  himself  on  buildings  constituting  part  of  the  mortgaged 
property,  and  add  the  same  to  the  principal  and  interest  of  his  debt,  and  it  was  decided 
that  he  could  not.  It  was  conceded  that  this  involved  the  correlative  proposition,  that 
if  the  mortgagee  had  received  any  sum  by  way  of  loss  on  such  policies,  he  would  be 
under  no  obligation  in  equity  to  credit  it  to  the  mortgagor,  or  be  responsible  to  him 
for  it."  See  Morrison  v.  Tennessee  Marine  &  Fire  Ins.  Co.  18  Missouri,  262.  In  Penn- 
sylvania, it  is  held  that,  where  the  mortgagee  insures  the  debt,  the  underwriter  having 
paid  the  mortgage  debt,  is  entitled  to  have  recourse  to  the  mortgaged  property,  and  to 
a  cession  of  the  security.  Smith  v.  Columbia  Ins.  Co.  17  Penn.  State,  253  ;  Insur- 
ance Co.  V.  Updcgraff,  21  id.  .513.  The  right  of  the  insurers  to  subrogation,  where 
they  pay  the  debt,  is  sustained  in  Mlna.  Ins.  Co.  v.  Tyler,  16  Wend.  385,  397.  Per  ir^i- 
worth,  Chancellor.  See  Carpenter  i'.  Providence  Washington  Ins.  Co.  16  Peters,  495,  501. 
It  seems  to  have  l)een  allowed  by  the  old  French  law,  and  its  justice  has  been  approved 
in  England  in  a  case  which  was  appealed  from  the  Court  of  Queen's  Bench  for  the  dis- 
trict of  Montreal,  to  her  Majesty  in  council%  Quebec  Fire  Ins.  Co.  v.  St.  Louis,  22 
Eng.  Law  &  Eq.  73;  S.  C.  7  Moore,  Privy  Council  Cases,  286.  Where  buildings 
were  destroyed  by  gunpowder,  under  an  order  of  tlie  city  authorities,  to  stop  the  rava- 
ges of  a  fire,  the  insurers  were  allowed  to  deduct  from  the  sum  insured,  the  amount 
received  by  the  insured,  from  the  city.  Pentz  v.  Receivers  of  iEtna  Fire  Ins.  Co.  3 
Edw.  Ch.  341  ;  S.  C.  9  Paige,  568. 

"  Thomas  v.  Vonkapff,  6  G.  &  Johns.  372;  Vernon  v.  Smith,  5  B.  &  Aid.  1.  But 
where  there  is  no  such  obligation  on  the  part  of  the  mortgagor  to  insure  for  the  benefit 


CH.  XIX.]  THE   LA  A?   OF   FIRE   INSURANCE.  511 

A  tenant,  by  the  courtesy,  may  insure  the  property,  even  if  his 
wife  be  only  a  joint-tenant.'  One  who  holds  by  disseisin,  if  he 
has  a  freehold  interest,  and  the  exclusive  right  of  occupation, 
may  insure  the  building,  and  as  his  own  property,  although  he  is 
liable  to  be  ousted  by  another  who  has  a  right  of  action.^  And 
a  tenant  for  years,  or  from  year  to  year,  may  insure  his  interest, 
but  would  recover  only  the  value  of  his  interest,  and  not  the 
value  of  the  whole  property.^  ♦ 

We  have  said  that,  generally,  any  one  having  any  legal  inter- 
est in  property,  may  insure  it  as  his  own.  But  there  is  one  im- 
portant exception  to,  or  modification  of  this  rule.  By  the  char- 
ters of  many  of  our  mutual  insurance  companies,  the  company 
has  a  lien,  to  the  amount  of  the  premium  note,  on  all  property 
insured.  It  is  obvious,  therefore,  that  no  such  description  can 
be  given,  or  no  such  language  used,  as  would  induce  the  company 
to  suppose  they  had  a  lien  when  they  could  not  have  one,  or 
would  in  any  way  deceive  them  as  to  the  validity  or  value  of 
their  lien.  In  all  such  cases,  all  incumbrances  must  be  stated, 
and  the  title  or  interest  of  the  insured  fully  stated,  in  all  those 
particulars  in  which  it  affects  the  lien.* 


of  the  mortgagee,  the  mortgagee  has  no  such  equitable  lien  upon  the  policy.  Carter  v. 
Rockett,  8  Paige,  437.  Chancellor  Walworth:  "A  contract  of  insurance  against  fire, 
as  a  general  rule,  is  a  mere  personal  contract  between  the  assured  and  the  underwriter, 
to  indemnify  the  former  against  any  loss  he  may  sustain.  But  the  assured,  by  an 
agreement  to  insure  for  the  protection  and  indemnity  of  another  person,  having  an  in- 
terest in  the  subject  of  the  insurance,  may  unquestionably  give  such  third  person  an 
equitable  lien  upon  the  money  due  upon  the  policy,  to  the  extent  of  such  interest. 
.  .  .  But  a  mere  lien  upon  the  property  insured  does  not  give  the  holder  of  that 
lien  a  corresponding  claim  upon  tlie  policy  which  the  owner  of  the  goods  has  obtained 
for  the  protection  of  his  own  interest  therein  ;  although  the  assured  is  personally  liable 
to  pay  the  debt,  which  is  a  lien  upon  the  property  insured."  Columbia  Ins.  Co.  v. 
Lawrence,  10  Peters,  507,  512  ;  McDonald  v.  Black,  20  Ohio,  193.  It  seems  that  an 
order  indorsed  by  the  assured,  on  a  policy  issued  by  a  mutual  insurance  company, 
"  to  pay  the  within  in  case  of  loss  "  to  a  mortgagee,  and  assented  to  by  the  company, 
will  enable  the  mortgagee  to  sue  on  the  policy  in  his  own  name.  Barrett  v.  Union 
Mutual  Fire  Ins.  Co.  7  Cush.  175.  Where  the  policy  provides  that  the  insurance,  in 
case  of  loss,  shall  be  paid  to  a  third  person,  the  action  should  be  in  the  name  of  the 
party  to  the  policy.     Nevins  v.  Rockingham  Fire  Ins.  Co.  5  Foster,  22. 

1  Franklin  Ins.  Co.  v.  Drake,  2  B.  Monr.  47. 

^  Curry  v.  Commonwealth  Ins.  Co.  10  Pick.  535. 

3  Niblo  V.  North  American  Fire  Ins.  Co.  1  Sandf  551.  But  where  the  tenant  owns 
the  building  and  not  the  land  under  it,  with  the  right  of  removing  the  building,  he  may 
recover  the  value  of  the  building,  if  insured  to  that  extent.  Laurent  v.  Chatham  Ins. 
Co.  1  Hall,  41.     See  Fletcher  v.  Commonwealth  Ins.  Co.  18  Pick.  419. 

*  Where  a  mutual  fire  insurance  company  were  entitled  to  a  lien  on  all  property 
insured  by  them,  and  one  condition  of  the  insurance  was,  that  if  the  representation 
made  by  the  applicant  was  false,  the  policy  should  not  cover  the  loss  ;  and  the  insured, 
in  his  application,  stated  that  he  was  the  owner  of  the  building  insured,  whereas  he  had 
only  a  bond  for  a  deed  of  it,  upon  the  performance  of  certain  conditions,  which  he  never 


512  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIX. 

A  trustee,  agent,  or  consignee,  nnay  insure  against  fire,  as  he 
may  against  marine  loss.^  Generally,  the  consignee  is  not  bound 
to  insure  against  fire,  but  may,  at  his  discretion.^  If  the  insur- 
ance is  expressly  on  goods  held  on  commission,  the  insurers  must 
take  notice  that  the  owner  does  not  retain  possession  of  them,  and 
that  they  are  to  be  in  the  custody,  and  under  the  vigilance,  integ- 
rity, and  care  of  the  consignor  only.^  He  may  insure,  expressly, 
his  own  intered;  in  them  for  advances,  or  the  owner's  interest. 
It  has  been  held,  in  a  recent  case,  and,  as  we  think,  on  excellent 
reasons,  that  a  consignee  may,  by  virtue  of  his  implied  interest 
and  authority,  insure,  in  his  own  name,  goods  in  his  possession 
against  fire,  to  their  full  value,  and  recover  for  the  benefit  of  the 
owner.*  And  if  the  interest  be  not  expressed,  the  policy  will  be 
construed  as  not  covering  the  interest  of  the  owners,  if,  upon  a 
fair  construction  of  the  words  and  facts,  it  seems  to  have  been 
the  intention  of  the  parties  only  to  secure  the  consignee's  interest.^ 


performed,  it  was  held  that  no  recovery  could  be  had  on  the  policy.  Brown  v.  Wil- 
liams, 28  Maine,  252  ;  Smith  v.  Bowditch  Mutual  Fire  Ins.  Co.  6  Gushing,  448  ;  Low- 
ell V.  Middlesex  Mutual  Fire  Ins.  Co.  8  id.  127.  So  where  the  building  insured  was 
on  land  held  under  a  lease.  Mutual  Assurance  Co.  v.  Mahon,  5  Call,  ( Va.)  517.  The 
policy  IS  void  where  stockholders  of  a  corporation  insure  its  property  as  their  own  in 
fee-simple.  Phillips  v.  Knox  Co.  Mutual  Ins.  Co.  20  Ohio,  174.  So  previous  mort- 
gages on  the  property  insured  must  be  made  known.  Addison  v.  Ky.  &  Louisville  Ins. 
Co.  7  B.  Monr.  470;  Smith  v.  Columbia  Ins.  Co.  17  Penn.  State,  253;  Warner  v.  Mid- 
dlesex Mut.  Ass.  Co.  21  Conn.  444.  Where  the  application,  which  is  made  a  part  of 
the  policy,  declares  that,  if  the  assured  should  suffer  a  judgment,  which  should  be  a 
lien  on  the  insured  premises,  without  communicating  it  to  the  insurers,  tlie  policy  should 
be  void,  held  that  this  warranty  having  been  broken,  the  policy  was  void.  Egan  v. 
Mutual  Ins.  Co.  5  Denio,  326.  It  has  been  held,  that  the  applicant  is  bound  to  com- 
municate the  existence  of  prior  incumbranc^es,  without  inquiry  by  the  insurers.  Smith 
r.  Columbia  Ins.  Co.  17  Penn.  State,  253.  But  see  Fletcher  v.  Commonwealth  Ins. 
Co.  18  Pick.  419;  Masters  v.  Madison  Co.  Mutual  Ins.  Co.  II  Barb.  631. 

1  Lucena  v.  Craufurd,  3  B.  &  P.  95 ;  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  103. 

2  Story  on  Agency,  §  3.     De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  119-121. 
8  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  128. 

*  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  84,  116 ;  Siter  v.  Morrs,  13  Penn.  State, 
220;  Goodall  v.  New  England  Mutual  Fire  Insurance  Co.  5  Foster,  169,  186. 

'"  Parks  V.  Gen.  Interest  Assurance  Co.  5  Pick.  34.  An  insurance  upon  merchandise 
in  a  warehouse,  "  for  account  of  whom  it  may  concern,"  protects  only  such  interests  as 
were  intended  to  be  insured  at  the  time  of  effecting  the  insurance.  Steele  v.  Insurance 
Co.  17  Penn.  State,  290,  298.  Lewis,  J. :  "All  the  authorities  go  to  show,  that  the  in- 
tention of  the  party  effecting  an  insurance,  at  the  time  of  doing  so,  ought  to  lead  and 
govern  the  future  use  of  it,  and  that  no  one  can,  by  any  subsequent  act,  entitle  himself 
to  the  benefit  of  it,  without  showing  that  his  interest  was  intended  to  be  embraced  by 
it  when  it  was  made.  This  rule  has  especial  application  to  insurances  made  'for 
accoui  t  of  whom  it  may  concern  ; '  and  where  these  terms  are  used  in  the  policy,  it 
is  not  sufficient  for  the  party  who  claims  the  benefit  of  the  insurance,  to  show  merely 
that  he  is  the  owner  of,  or  has  an  insurable  interest  in  the  goods.  He  must  show 
that  he  caused  the  insurance  to  be  effected  for  his  benefit,  or  that  it  was  intended,  at 
the  time,  for  his  security.  These  terms  in  the  policy  will  not,  in  general,  dispense 
•with  this  evidence.     And  where   the  party  claiming  the  benefit,  cannot  show  that  he 


en.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  51.3 

It  is  now  common  for  a  commission  merchant  to  cover,  in  one 
policy,  in  his  own  name,  all  the  goods  of  the  various  owners  who 
have  consigned  to  him.^  It  has  been  held,  that  "  goods  held  on 
commission  "  in  fire  policies,  have  an  effect  equivalent  to  "  for 
whom  it  may  concern,"  in  marine  policies.^  And  it  was  also  in- 
timated, but,  as  we  think,  on  doubtful  grounds,  that  if  the  goods 
actually  were  held  on  commission,  they  would  not  be  covered  by 
the  policy,  unless  so  described,  although  the  ins^^'cd  had  a  lien 
for  advances;  in  this  case,  however,  the  condition  in  the  policy 
excluded  such  goods.^ 

A  consignee  of  goods,  sent  to  him,  but  not  received,  may  in- 
sure his  own  interest  in  them  against  marine  risks,  and  we  know 
no  reason  why  he  may  not  against  fire.*^ 

So,  any  bailee,  who  has  a  legal  interest  in  the  chattels  which  he 
holds,  although  this  be  temporary  and  qualified,  may  insure  the 
goods  against  fire.  Thus,  it  has  been  held,  that  a  common  car- 
rier by  land,  who  has  a  lien  on  the  goods,  and  is  answerable  for 
them  if  lost  by  fire,  (unless  by  the  act  of  God  or  the  public 
enemy),  may  insure  the  goods  to  their  full  value,  against  fire.^ 

The  insurers  must  know  whom  they  insure;  for  they  may  have 
a  choice  of  persons,  and  it  is  important  to  them  to  know  whether 
they  are  to  depend  on  the  care  and  honesty  of  this  man  or  of 
that  man.  The  insured  must  so  describe  the  owner,  as  not  to  de- 
ceive them  on  this  point,  and  so  he  must  the  ownership.  Thus, 
if  he  aver  an  entire  interest  in  himself,  he  cannot  support  this  by 


caused  or  directed  the  insurance  to  be  effected,  it  will  not  serve  him  to  rest  upon  some 
supposed  secret  intention  not  manifested  by  a  single  word  or  act,  at  the  time  of  the  trans- 
action, to  mark  its  character  and  indicate  the  person  or  interest  intended  to  be  insured. 
That  which  is  not  naanifested  by  evidence,  is  to  be  treated  as  having  no  existence. 
The  nature  of  the  transaction  must  be  fixed  at  the  time  of  insurance,  and  cannot  be 
changed  by  subsequent  consent  of  the  insured,  without  the  authority  of  the  under- 
writers. If  this  were  not  law,  all  the  mischiefs  arising  from  gambling  policies  might 
ensue." 

1  Millaudon  v.  Atlantic  Ins.  Co.  8  Louis.  557. 

2  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  124,  125. 

^  A  policy  was  effected  by  the  plaintiff  "  on  goods  and  furniture  contained  in  his 
counting-room."  One  of  the  conditions  of  the  policy  provided  that  "goods  held  in 
trust  or  on  commission"  should  not  be  covered  unless  they  are  insured  as  such,  and 
the  articles  in  question  were  held  in  trust  and  commission.  The  policy  was  accord- 
ingly held  void.     Brichta  v.  N.  Y.  Lafayette  Ins.  Co.  2  Hall,  372. 

*  Putnam  i'.  Mercantile  Ins.  Co.  5  Met.  386. 

^  In  Crowley  v.  Cohen,  3  B.  &  Ad.  478,  it  was  held,  that  an  insurance  "on  goods" 
was  sufficient  to  cover  the  interest  of  carriers  in  the  property  under  their  charge,  and 
that  their  particular  interest  need  not  be  specified.  Van  Natta  v.  Mutual  Security  Ins. 
Co.  2  Sandf.  490  ;  Chase  v.  Washington  Mutual  Ins.  Co.  12  Barb.  595. 


614  ELEMENTS    OF   MERCANTILE   LAW.  [cH.  XIX. 

showing  a  joint  interest  with  another;  and  if  he  aver  the  latter, 
proof  of  the  former  is  not  sufficient.^ 

So  too,  there  must  be  actual  authority  to  make  the  insurance. 
This  may  be  express  or  implied,  in  some  cases,  as  it  seems  to  be 
with  the  consignee,  or  the  carrier,  and  perhaps,  generally,  with 
any  one  who  has  an  actual  possession  of,  interest  in,  and  lien  on 
the  property.  But  a  tenant,  in  common,  does  not  derive  from 
his  cotenancy  authority  to  insure  for  his  cotenant;  nor  could  a 
master  of  a  ship  or  a  ship's-husband,  merely  as  such,  insure  the 
owner's  interest  against  fire,  any  more  than  against  marine  loss.^ 


SECTION  IV. 

OF   REINSURANCE. 

Reinsurance  is  equally  lawful  in  fire  policies  as  in  marine  poli- 
cies, and  in  general  is  governed  by  the  same  rules.  The  reinsurance 
is  an  insurance  not  of  the  risk  of  the  insured,  for  that  is  a  merely 
ideal  thing;  but  it  is  an  insurance  of  the  property  originally  in- 
sured, in  which  the  first  insurers  have  an  insurable  interest.  If 
a  comrrion  policy  be  used,  with  no  other  change  than  that  the 
word  reinsurance  is  used  instead  of  insurance,  all  its  requirements 
are  in  force.  If,  for  example,  in  case  of  loss,  this  policy  requires 
a  certificate  from  a  magistrate  as  to  character,  circumstances,  &c., 
that  must  be  furnished  by  the  reinsured.  But  if  a  suitable  cer- 
tificate were  given  by  the  party  first  insured  to  the  original  in- 
surer, and  he  transmit  the  same  forthwith  to  those  who  insure 
him,  that  is  enough  ;  and  so  it  would  be  with  notice,  preliminary 
proof,  and  all  similar  requirements.^    And  an  insurer  who  obtains 

1  Catlett  f.  Pacific  Ins.  Co.  1  Paine,  C.  C.  615.  Where  the  act  incorporating  the 
company  provided  that  the  policy  may  be  void  where  the  true  title  of  the  assured  is  not 
expressed,  and  the  plaintiff,  in  his  written  application,  described  himself  as  "  the  owner 
of  the  buildings,'"  whereas  he  was  tenant  by  the  courtesy,  it  was  held  that  he  could  not 
recover  on  the  policy.  Leathers  v.  Farmers'  Mutual  Fire  Ins.  Co.  4  Foster,  259. 
Where  the  policy  is  etfected  "  on  account  of  the  owners,"  it  is  competent  to  show  by 
parol  evidence,  who  were  intended  by  that  designation.  Catlett  v.  Pacific  Ins.  Co.  I 
Wend.  561  ;  Foster  v.  U.  S.  Ins.  Co.  11  Pick.  85. 

■^  Alliance  Marine  Ins.  Co.  v.  La.  State  Ins.  Co.  8  Louis.  1.  A  previous  authority 
to  insure  is  not  necessary.  But  a  subsequent  adoption,  even  after  a  loss,  is  sufficient, 
provided  the  party  effecting  the  insurance  intended  at  the  time -to  have  the  interest  of 
the  ratifying  party  embraced  in  the  policy.  Durand  v.  Thouron,  1  Port.  (Ala.)  238; 
Watkins  v.  Durand,  id.  251 ;  De  Bolle  v.  Pennsylvania  Ins.  Co.  4  Whart.  68  ;  Milten- 
berger  v.  Beacom,  9  Barr.  198. 

3  Foster  v.  U.  S.  Insurance  Co.  11  Pick.  85. 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  515 

reinsurance,  is  bound  to  communicate,  (in  addition  to  whatever 
else  should  be  stated  by  one  asking  insurance),  all  the  informa- 
tion he  has  concerning  the  character  of  the  party  originally  in- 
sured ;  and  a  material  concealment  on  this  point  would  avoid  the 
policy.' 

As  the  insurer,  who  is  reinsured,  effects  an  insurance  not  on  his 
risk,  but  on  the  property,  it  seems  to  be  very  strongly  held,  that 
he  recovers  in  case  of  loss,  not  merely  what  he  actually  pays  — 
although  this  might  be  an  adequate  indemnity  —  but  all  that  he 
was  legally  liable  to  pay.  Of  course  if  he  has  any  valid  defence,  he 
must  make  it ;  and  if  it  discharges  him,  it  destroys  his  claim  on 
his  insurers.  But  if  there  be  a  loss  which  he  is  bound  to  pay, 
he  recovers  from  his  insurers  the  whole  amount  of  it,  whether  he 
actually  pays. or  not.^ 

A  question  then  arises,  whether  if  an  insurer  who  is  reinsured 
becomes  insolvent,  so  that  the  originally  insured  does  not  get  a 
payment  upon  his  policy,  he  has  not  a  lien  upon,  or  a  specific  in- 
terest in  the  policy  of  reinsurance.  But  it  is  held  that  he  has 
not.  The  reinsurers,  assignees,  or  trustees,  take  all  that  is  paya- 
ble under  the  policy  of  reinsurance,  and  hold  it  as  assets  for  the 
creditors  generally  of  the  reinsured ;  and  the  originally  insured 
takes  only  his  proper  share  or  dividend  as  one  of  the  creditors.^ 

Where  a  reinsurer  claimed,  under  the  usage  of  the  city  of 
New  York,  to  pay  only  the  same  proportion  of  the  entire  loss  of 
the  original  assured,  which  the  sum  reinsured  bore  to  that  of  the 
original  insurance,  the  court  held  that  the  usage  could  not  be  per- 
mitted to  control  the  rules  of  law.  The  original  insurance  was 
for  $22,000.  The  reinsurance  was  for  $10,000.  The  loss  was 
$14,373.36.  The  amount  payable  by  the  usage  (which  was  clearly 
proved)  was  $6,685.25.  A  verdict  was  taken  for  $10,962.11, 
subject  to  the  opinion  of  the  court,  and  was  sustained.  There 
was  a  clause  in  the  policy,  by  which  reinsurance  was  effected,  in 
these  words :  "  In  case  of  any  other  insurance  upon  the  prop- 
erty hereby  insured,  prior  or  subsequent  to  the  date  of  this  policy, 
the  insured  shall  not,  in  case  of  loss  or  damage,  be  entitled  to 
recover  on  this  policy  any  greater  proportion  of  the  loss  or  dam- 
age, than   the  amount   hereby  insured  shall  bear  to   the  whole 

1  N.  Y.  Bowery  Fire  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359. 

2  Hone  V.  Mutual  Safety  Ins.  Co.  1  Sandf.  153. 

3  Herckenrath  v.  American  Mutual  Ins.  Co.  3  Barb.  Ch.  63. 


516  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

amount  insured  on  the  sanie  property."  And  it  was  held  to 
apply  only  to  cases  of  double  insurance,  for  which  it  was  intended. 
And  therefore  it  could  have  no  bearing  upon  a  policy  of  reinsur- 
ance, unless  there  was  another  policy  of  reinsurance,  or  a  double 
reinsurance ;  for  it  was  only  the  interest  of  the  original  insurers 
that  was  covered  by  the  reinsurance.^ 


SECTION  V. 

OF   DOUBLE   INSURANCE. 

Double  insurance,  although  sometimes  confounded  with  rein- 
surance, is  essentially  different.  By  this,  the  party  originally 
insured  becomes  again  insured ;  but  by  reinsurance,  the  original 
insurer  is  insured,  and,  as  we  have  seen,  the  original  insured  has 
no  interest  in,  and  no  lien  upon  this  policy.  If,  by  a  double  in- 
surance, the  insured  could  protect  himself  over  and  over  again, 
he  might  recover  many  indemnities  for  one  loss.  This  cannot 
be  permitted,  not  only  because  it  is  opposed  to  the  first  principles 
of  insurance,  but  because  it  would  tempt  to  fraud,  and  make  it 
very  easy.  This  effect  may  be  obviated  in  two  ways  —  one,  by 
considering  the  second  insurance  as  operating  only  on  so  much 
of  the  value  of  the  property  insured,  as  is  not  covered  by  the 
first ;  and  then,  as  soon  as  the  whole  value  is  covered,  whether 
by  the  first  or  by  subsequent  policies,  any  further  insurance  has  no 
effect.  A  second  way  is,  by  considering  the  second  insurance  as 
made  jointly  with  the  first.  Then  only  as  much  would  be  paid 
on  any  loss,  on  many  insurances,  as  on  one  only ;  but  this  pay- 
ment is  divided  ratably  among  all  the  insurers.  All  the  policies 
are  considered  as  making  but  one  policy  ;  and,  therefore,  any  one 
insurer,  who  pays  more  than  his  proportion,  may  claim  a  con- 
tribution from  others  who  were  liable.^ 

In  this  country,  fire  policies  usually  contain  express  and  exact 
provisions  on  this  subject.  They  vary  somewhat;  but,  gener- 
ally, they  require  that  any  other  insurance  must  be  stated  by  the 

1  Mutual  Safety  Ins.  Co.  v.  Hone,  2  Comst.  235 ;  S.  C.  1  Sandf.  137. 

2  Thurston  v.  Koch,  4  Dall.  348  ;  Craig  v.  Murgatroyd,  4  Yeates,  161  ;  Millaudon  v. 
Western  Marine  &  F.  lus.  Co.  9  Louis.  27  ;  Peters  v.  Del.  Ins.  Co.  5  S.  &  R.  475. 


CH.  XIX.]  THE   LAW    OP   FIRE   INSURANCE.  517 

insured,  and  indorsed  on  the  policy  ;  and  it  is  a  frequent  condition, 
that  each  office  shall  in  that  case  pay  only  a  ratable  proportion 
of  a  loss;  and  it  is  often  added,  that,  if  such  other  insurance  be 
not  so  stated  and  indorsed,  the  insured  shall  not  recover  on  the 
policy.  And  it  has  been  held  that  such  a  condition  applies  to  a 
subsequent  as  well  as  to  a  prior  insurance.^  Nor  will  a  court  of 
equity  relieve  if  sufficient  notice  and  indorsement  have  not  been 
made.2  But  it  has  been  held  that  a  valid  notice  might  be  given 
to  an  agent  of  the  company,  who  was  authorized  to  receive  ap- 
plications and  survey  property  proposed  for  insurance.^ 

1  Harris  v.  Ohio  Ins.  Co.  5  Ohio,  466;  Westlake  v.  St.  Lawrence  Ins.  Co.  14  Barb. 
206  ;  Staccy  v.  Franklin  Fire  Ins.  Co.  2  W.  &  S.  543.  But  it  has  been  held,  that,  if 
the  subsequent  insurance  is  declared  void  in  the  policy,  if  there  has  been  a  previous  in- 
surance, without  the  knowledge  and  consent  of  the  insurers,  it  cannot  be  set  up  as  evi- 
dence of  a  subsequent  insurance,  where  the  first  policy  provides  that  a  subsequent 
insurance,  without  the  consent,  in  writing,  of  the  underwriters  thereof,  shall  be  ipso 
facto  void.  Jackson  v.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  418.  A  policy  of  insur- 
ance to  the  amount  of  $1,000,  say  "$700  on  stock  of  books  and  stationary,  and  $300  on 
music,  musical  instruments,  fancy  goods,  bronze  powder,  and  medicines,"  contained  a 
covenant,  that,  if  the  insured  "shall  hereafter  make  any  other  insurance  on  t!ie  hereby 
insured  premises,  he  shall,  with  all  reasonable  diligence,  notify  the  same  to  this  corpo- 
ration," so,  "  or,  in  (]{||^lt  thereof,  this  policy  shall  cease  and  be  of  no  effect ; "  it  was 
held  that  tlie  policy  B^me  void  if  any  part  of  the  goods  were  afterwards  insured,  with- 
out notice.     Associated  Firemen's  Ins.  Co.  v.  Assum,  5  Maryland,  165. 

'^  Carpenter  v.  Providence  Washington  Ins.  Co.  4  How.  185. 

^  Sexton  V.  Montgomery  County  Mutual  Ins.  Co.  9  Barb.  191;  Wilson  i'.  Genesee 
Mutual  Ins.  Co.  16  id.  511;  McEwen  v.  Montgomery  Ins.  Co.  5  Hill,  101.  And  such 
notice  need  not  be  in  writing,  unless  specially  required.  Where  a  policy  required 
notice  of  further  insurance  to  be  given,  and  the  assent  of  the  company  to  be  indorsed 
on  the  policy,  or  otherwise  acknowledged  and  approved  by  them  in  writing,  it  was  held 
that  a  letter  from  the  secretary  of  the  company,  saying,  "I  have  received  your  notice 
of  additional  insurance,"  was  a  sufficient  acknowledgment  and  approval  in  writing. 
Potter  V.  Ontario  Ins.  Co.  5  Hill,  147.  Where  the  charter  of  an  insurance  company 
provided,  that,  if  any  other  insurance  should  be  obtained  on  any  property  insured  in 
that  company,  notice  should  be  given  to  the  secretary,  and  the  consent  of  the  directors 
obtained,  otherwise  the  policy  should  be  void ;  and  the  evidence  tended  to  show  thaf 
the  secretary  knew  of  and  advised  the  second  insurance,  and  that  the  directors-  really 
consented  to  the  same  ;  it  was  held  that  written  notice  and  consent  were  not  necessary, 
and  that  the  evidence  was  competent  to  show  both.  Goodall  v.  New  England  Mutual 
Fire  Ins.  Co.  5  Foster,  N.  H.  169.  A  substantial  compliance  with  the  by-hiw  requiring 
the  notice  of  previous  insurance,  is  sufficient.  Liscom  v.  Boston  Mutual  Fire  Ins.  Co. 
9  Met.  205.  Where  the  bj'-laws  of  a  mutual  fire  insurance  companj'  provided  that  any 
policy  issued  by  the  company  to  cover  property  previously  insured,  should  be  void, 
unless  the  previous  insurance  should  be  expressed  in  the  policy  at  the  time  it  was 
issued,  it  was  held  that  a  policy  issued  by  the  company,  and  made  in  terms  subject  to 
the  conditions  and  limitations  of  the  by-laws,  in  which  policy  a  previous  insurance  on 
the  property  was  ijot  expressed,  was  void,  even  in  the  hands  of  an  assignee,  without 
notice  of  the  defect ;  although  the  insurers  knew  of  the  existence  of  such  prior  insur- 
ance, and  of  the  intention  of  the  assured  that  it  should  remain  in  force,  and  assented 
thereto,  and  although  the  policy  was  prepared  by  the  insurers,  and  delivered  to  the 
assured,  as  he  supposed,  pursuant  to  his  said  intention,  without  any  knowledge,  on  his 
part,  that  the  prior  insurance  was  not  mentioned  therein,  and  although  the  amount  in- 
sured by  the  policy,  together  with  the  amount  of  such  prior  insurance,  did  not  exceed 
the  value  of  the  property  insured.  Barrett  v.  Union  Mutual  Fire  Ins.  Co.  7  Cush.  180. 
Fletcher,  J.:  "It  was  said  in  the  argument,  that  there  was  a  mistake  or 'fault,  on  the 
part  of  the  defendants ;  that  the  policy  was  prepared  by  the  defendants  ;  and  that  they 


518  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XIX. 

In  some  instances,  the  charter  of  the  company  provides  that 
any  policy  made  by  it,  shall  be  avoided  by  any  double  insurance 
of  which  notice  is  not  given,  and  to  which  the  consent  of  the 
company  is  not  obtained,  and  expressed  by  their  indorsement  in 
the  policy.^  But  this  would  not  apply  to  a  non-notice  by  an  in- 
sured of  an  insurance  eflfected  by  the  seller  on  the  house  which 
the  insured  had  bought,  if  this  policy  were  not  assigned  to  him.^ 

"We  have  seen  that  several  policies  insuring  the  same  party  on 
the  same  interest,  are  taken  to  be  one  policy,  and  therefore  a 
payment  of  more  than  a  due  proportion  gives  a  claim  for  con- 
tribution. But  it  seems  that  this  is  not  the  case  where  there  is 
a  clause  in  the  policy  like  that  above  mentioned,  providing  that 
only  a  ratable  proportion  shall  be  paid  by  each  insurer.  For, 
this  clause  gives  each  insurer  an  adequate  defence,  if  more  than 
his  share  be  demanded ;  and,  therefore,  the  ground  of  contribution 
fails ;  for  this  right  exists  only  when  two  or  more  are  bound 
severally  to  pay  the  whole,  and  one  pays  it,  or  more  than  his 
share,  by  compulsion,  and  therefore  may  ask  the  rest  who  were 
bound  in  the  same  way,  to  contribute.^  9' 

It  is  a  double  insurance  if  both  policies  cover  the  same  insur- 
able interest,  and  they  are  all  in  the  name  of  the  same  assured, 
or,  perhaps,  all,  or  a  part,  are  in  the  name  of  another,  for  his 
benefit.  Insurance  made  by  a  mortgagee,  at  the  expense  of  the 
mortgagor,  is  a  subsequent  insurance.^ 

should  have  expressed  in  it  the  prior  policy,  and  omitted  to  do  so  by  design  or  by  wil- 
ful negligence  ;  and  that  the  assured  did  not  read  it,  but  supposed  that  the  prior  policy 
•  was  expressed.  The  assured  certainly  had  abundant  opportunity  to  I'cad  the  policy, 
and  need  not  have  accepted  it,,  if  it  was  not  satisfactory  to  him,  according  to  the 
agreement  of  the  parties.  If  the  assured  accepted  the  policy,  without  looking  at  it,  or 
knowing  what  it  was,  he  would  seem  himself  to  be  liable  to  the  charge  of  culpable 
negligence  made  against  the  defendants.  But  if,  from  mistake  or  fraud,  an  agreement 
is  so  defective,  that,  instead  of  conveying  the  meaning  of  the  parties,  it  express  a  differ- 
ent or  opposite  intent,  if  relief  can  be  given  at  all,  it  must  be  sought  exclusively  in  a 
court  of  equity.  A  court  of  law  must  act  on  the  agreement  as  it  is ;  it  cannot  strike 
out  or  change  any  part,  or  add  any  thing  to  it,  so  as  to  contradict  or  vary  the  agree- 
ment contained  in  the  written  instrument.  The  parol  evidence  offered  in  tliis  case,  was 
therefore  clearly  not  admissible ;  and  taking  the  policy  as  it  is,  the  plaintiffs  cannot 
recover."  The  insured  is  not  bound  to  give  the  details  of  the  previous  insurance  unless 
thev  are  specially  called  for.  McMahon  v.  Portsmouth  Mutual  Fire  Ins.  Co.  2  Foster, 
N.  H.  15. 

1  Stark  County  Mutual  Ins.  Co.  v.  Ilurd,  19  Ohio,  149. 

2  JRtna.  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  385 ;    Burbank  v.  Rockingham  Mut.  Fire 
Ins.  Co.  4  Foster,  550. 

3  Lucas  V.  Jefterson  Ins.  Co.  6  Cow.  635.     See  also  Mutual  Safety  Ins.  Co.  v.  Hone, 
2  Comst.  235. 

*  Holbrook  v.  American  Ins.  Co.  1  Curtis,  193. 


CH.  XIX.]  THE  LAW   OF   FIRE  INSURANCE.  519 

SECTION   VL 

OF   WARRANTY   AND   REPRESENTATION. 

The  law  of  warranty  and  representation  is,  in  general,  the 
same  in  fire  as  in  marine  iijsurance.  A  warranty  is  a  part  of  the 
contract;  it  must  be  distinctly  expressed,  and  written  either  in 
or  on  the  policy,  or  on  a  paper  attached  to  the  policy,  or,  as  has 
been  held,  on  a  separate  paper  distinctly  referred  to  and  described 
as  a  part  of  the  policy.  Then,  it  operates  as  a  condition  prece- 
dent;  and  if  it  be  broken,  there  is  no  valid  contract;  nor  can  it 
be  helped  by  evidence  that  the  thing  warranted  was  less  material 
than  was  supposed,  or,  indeed,  not  material.^ 

It  may  be  a  warranty  of  the  present  time  or,  as  it  is  called, 
affirmative,  or  of  the  future  or  promissory.  And  it  may  be, 
although  of  the  present  and  affirmative,  a  continuing  warranty, 
rendering  the  policy  liable  to  avoidance  by  a  non-continuance  of 
the  thing  which  is  warranted  to  exist.  Whether  it  is  thus  con- 
tinuing or  not,  must  evidently  be  determined  by  the  nature  of 
the  thing  warranted.  A  warranty  that  the  roof  of  a  house  is 
slated,  or  that  there  are  only  so  many  fireplaces  or  stoves,  would, 
generally  at  least,  be  regarded  as  continuing;  but  a  warranty 
that  the  building  was  five  hundred  feet  from  any  other  building, 
would  not  cause  the  avoidance  of  the  policy  if  a  neighbor  should 
afterwards  put  up  a  house  within  one  hundred  feet,  without  any 
act  or  privity  of  the  insured.^  This  subject  has,  however,  been 
somewhat  considered  under  the  topic  of  alteration. 

1  See  ante,  p.  497,  and  notes. 

2  Where  the  insured,  on  applying  for  insurance  on  buildings,  promised  the  under- 
writers, verbally,  that,  if  they  accepted  the  risk,  he  would  discontinue  the  use  of  a  fire- 
place in  the  basement,  and  use  a  stove  instead  thereof,  but,  after  obtaining  the  policy, 
omitted  to  perform  his  promise,  in  consequence  of  which  the  building  was  burned,  it 
was  held  to  be  no  defence  to  an  action  on  the  policy.  Alston  v.  INIechanics'  Mutual 
Ins.  Co.  4  Hill,  329.  A  mere  statement  in  a  notice  of  alterations,  by  the  assured,  that 
a  machine  put  up  by  them  upon  the  premises,  is  designed  for  "  burning  hard  coal,"  will 
not  be  considered  an  agreement  to  burn  hard  coal  only,  or  not  to  use  other  fuel,  should 
it  become  necessary,  and  can  be  used  without  increasing  the  risk.  Tillou  v.  Kingston 
Mutual  Ins.  Co.  7  Barb.  .570.  In  the  application  for  insurance,  referred  to  in  the  policy 
as  forming  part  thereof,  it  was  stated  thus  :  "  There  is  one  stove ;  pipe  passes  through 
the  window,  at  the  side  of  the  building.  There  will,  however,  be  a  stove  chimney  built, 
and  the  pipe  will  pass  into  it  at  the  side."  It  seems  that  this  amounted  to  a  warranty 
that  the  chimney  should  be  built  within  a  reasonable  time.  Murdock  v.  Chenango 
County  Mutual  Ins.  Co.  2  Comst.  210.    Statements  which  are  made  a  part  of  the  policy, 


520  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XIX. 

We  have  seen  that  statements  made  on  a  separate  paper,  may- 
be so  referred  to  as  to  make  them  a  part  of  the  poliey.  And  it 
is  usual  to  refer  in  this  way  to  the  written  application  of  the  in- 
sured, and  to  all  the  written  statements,  descriptions,  and  an- 
swers to  questions,  which  he  makes  for  the  purpose  of  obtaining 
insurance.  And  although  there  is  some  indication  of  distin- 
guishing between  the  application  itself  and  the  conditions  on 
which  the  policy  is  made,  we  see  no  reason  for  saying  that  any 
statements  whatever,  made  in  writing,  for  the  purpose  of  obtain- 
ing insurance,  and  referred  to  distinctly  in  the  poliey  as  a  part  of 
it,  and  therein  declared  to  be  warranties  or  conditions  on  which 
the  policy  is  made,  —  are  any  thing  less  than  positive  warranties. 
But  a  fair  and  rational,  or,  in  some  cases,  a  liberal  construction 
will  be  given  to  such  statements.  Thus,  where  a  charter  of  a 
company  provided  that  no  insurance  on  any  property  should  be 
valid  to  the  insured,  unless  he  had  a  good  and  perfect  and  unin- 

and  are  prospective,  as,  that  water  casks  shall  be  kept  in  an  upper  story,  or  a  watch 
kept,  or  an  examination  made  at  night,  must  be  substantially  complied  with.  Houghton 
V.  Manufacturers'  Mutual  Fire  Ins.  Co.  8  Met.  114;  Jones  Manufacturing  Co.  v.  Manu- 
facturers' Mutual  Fire  Ins.  Co.  8  Cash.  82 ;  Hovey  v.  American  Mut.  Ins.  Co.  2  Duer, 
554  ;  Glcndalc  Woollen  Co.  v.  Protection  Ins.  Co.  21  Conn.  19;  Sheldon  v.  Hartford 
Fire  Ins.  Co.  22  id.  235.  See  ante,  p.  50.3,  n.  1.  Where,  by  the  terms  of  a  policy,  a 
misrepresentation  or  concealment  as  to  the  distance  of  the  building  insured  from  other 
buildings,  avoids  it,  such  misrepresentation  or  concealment  will  have  that  effect.  Bur- 
ritt  V.  Saratoga  County  Mut.  Fire  Ins.  Co.  5  Hill,  188 ;  Jennings  v.  Chenango  County 
Mutual  Ins.  Co.  2  Denio,  75 ;  Kennedy  v.  St.  Lawrence  County  Mut.  Ins.  Co.  10  Barb. 
285  ;  Wilson  v.  Herkimer  County  Mut.  Ins.  Co.  2  Selden,  53 ;  Wall  v.  East  River 
Mutual  Ins.  Co.  3  id.  370.  But  if  the  insurer,  with  a  knowledge  of  the  inaccuracy  of 
the  statement,  makes  and  receives  assessments  of  premiums  from  the  insui'cd,  he  will 
be  estopped  from  setting  it  up  in  defence  in  a  case  of  loss.  Frost  v.  Saratoga  Mutual 
Ins.  Co.  5  Denio,  154.  But  it  is  held  that  a  misstatement  as  to  the  distance  of  other 
buildings,  which  is  not  material,  will  not  avoid  the  insurance,  where  the  policy  does 
not  specially  give  it  the  effect  of  a  warranty.  Gates  v.  Madison  County  Mut.  Ins.  Co. 
2  Comst.  43,  1  Selden,  469,  overruling  the  decision  of  the  Supreme  Court,  3  Barb.  73. 
See  Wall  v.  East  River  Mutual  Ins.  Co.  3  Selden,  374.  The  erection  by  the  party  in- 
sured, without  notice  to  the  insurers,  of  a  new  building  nearly  adjoining  the  building 
insured,  docs  not  invalidate  the  policy ;  there  being  no  provision  on  the  subject,  and 
no  actual  injury  having  resulted  from  such  erection,  although,  when  the  insurance  was 
effected,  the  building  was  in  contemplation,  and  preparations  for  its  erection  iiad  com- 
menced. Gates  V.  Madison  County  Mut.  Ins.  Co.  1  Selden,  469.  So,  where  the  assured, 
upon  an  application,  by  a  diagram  or  otiierwise,  represent  the  ground  contiguous  to 
the  premises  as  "  vacant,"  this  does  not  amount  to  a  warranty  that  it  shall  remain  vacant 
during  the  risk,  or  prevent  the  insured  himself  from  building  thereon.  Stebbins  v. 
Globe  Ins.  Co.  2  Hall,  632.  Where  the  company  insured  the  plaintiff"  $2,000  on  his 
machine  shop,  "  a  watchman  kept  on  the  premises,"  it  was  held  that  the  stipulation, 
"a  watchman  kept  on  the  premises,"  inserted  in  the  body  of  the  policy  just  after  the 
description  of  the  property,  is  in  the  nature  of  a  warranty,  and  must  be  substantially 
complied  with.  It  does  not  require  a  watchman  to  be  kept  there  constantly,  but  only 
at  such  times  as  men  of  ordinary  care  and  skill  in  like  business  keep  a  watchman  on 
their  premises.  And  in  an  action  on  such  policy,  evidence  of  the  usage,  in  this  respect, 
of  similar  establishments,  is  admissible.  Crocker  v.  People's  Mutual  Fire  Ins.  Co.  8 
Cush.  79.     See  ante,  pp.  492,  493,  and  notes. 


I 


CH.  XIX.]  THE   LAW   OF    FIRE   INSURANCE.  521 

cumbered  title  thereto,  and  unless  the  true  title  of  the  assured  be 
disclosed,  and  two  persons  made  application  for  insurance  upon 
a  tannery  and  the  stock  therein,  and  were  insured  jointly;  and  it 
turned  out  that  one  of  them  owned  exclusively  the  building,  and 
the  other  exclusively  occupied  it  and  owned  the  stock,  the  in- 
surers were  held.^ 

It  is  quite  certain  that  the  word  warranty  need  not  be  used,  if 
the  language  is  such  as  to  import  unequivocally  the  same  mean- 
ing.2  And  an  indorsement  made  upon  the  policy  before  it  is 
executed,  may  take  effect  as  a  part  of  it.^ 

A  statement  may  be  introduced  into  the  policy  itself,  and  be 
construed,  not  as  any  warranty,  but  merely  as  a  license  or  per- 
mission of  the  insurers  that  premises  may  be  occupied  in  a  cer- 
tain way,  or  some  other  fact  occur  without  prejudice  to  the 
insurance.^ 

A  representation,  in  the  law  of  insurance,  differs  from  a  war- 
ranty in  that  it  is  not  a  part  of  the  contract.  If  made  after  the 
signing  of  the  policy  or  the  completion  of  the  contract,  it  cannot, 
of  course,  affect  it.  If  made  before  the  contract,  and  with  a 
view  to  effecting  insurance,  it  is  no  part  of  the  contract;  but  if 
it  be  fraudulent,  it  makes  the  contract  void.  And  if  it  be  false, 
and  known  to  be  false  by  him  who  makes  it,  it  is  his  fraud.  To 
have  this  effect,  however,  it  must  be  material ;  and  there  is  no 
better  test  or  standard  for  this  than  the  question,  whether  the 
contract  would  have  been  made,  and,  in  its  present  form  or  on  its 
actual  terms,  if  this  statement  had  not  been  made  and  believed 
by  the  insurers.  If  the  answer  is,  that  the  contract  would  not 
have  been  made  if  this  statement  had  not  been  made,  it  is  mate- 
rial; otherwise,  not.^ 

1  Peck  V.  New  London  County  Mut.  Ins.  Co.  ^2  Conn.  575. 

-  Sec  p.  492,  and  notes. 

3  Roberts  v.  Chenango  County  Mutual  Ins.  Co.  3  Hill,  501 . 

*  Catlin  V.  Springfield  Fire  Ins.  Co.  1  Sumn.  434. 

5  Clark  V.  Manufiicturcrs'  Ins.  Co.  2  Wood.  &  Minot,  472  ;  NicoU  v.  American  Ins. 
Co.  3  id.  529.  The  statements  in  the  application  on  a  separate  sheet,  have  the  effect 
only  of  representations,  and  do  not  avoid  the  policy  unless  void  in  a  material  point, 
or  unless  the  policy  makes  them  specially  a  part  of  itself,  and  gives  them  the  effect  of 
warranties.  Jefferson  Ins.  Co.  v.  Cotheal,  7  Wend.  72 ;  Snyder  v.  Farmers'  Ins.  Co. 
13  Wend.  92;  S.  C.  16  id.  481 ;  Delonguemare  v.  Tradesmen's  Ins.  Co.  2  Hall,  611; 
Stebbins  v.  Globe  Ins.  Co.  id.  632 ;  Burritt  v.  Saratoga  County  Mut.  Fire  Ins.  Co.  5 
Hill,  190  ;  Murdock  v.  Chenango  County  Mut.  Ins.  Co.  2  Comst.  210 ;  Sexton  v.  Mont- 
gomery County  Mut.  Ins.  Co.  9  Barb.  200 ;  Kennedy  v.  St.  Lawrence  County  Mut.  Ins. 
Co.  10  id.  285;  Williams  v.  New  Eng.  Mutual  Fire.  Ins.  Co.  31  Maine,  224;  Insurance 
Co.  V.  Southard,  8  B.  Monr.  634 ;  Egan  v.  Mutual  Ins.  Co.  5  Denio,  326. 

44* 


522  ELEMENTS  OF  MERCANTILE  LAW.  [CH.  XIX. 

A  representation  may  be  more  certainly  and  precisely  proved 
if  in  writing;  but  it  will  have  its  whole  force  and  effect  if  only 
oral.' 

In  some  instances,  by  the  terms  of  the  policies,  any  misrepre- 
sentations or  concealments  avoid  the  policy.  And  it  is  held  that 
the  parties  have  a  right  to  make  such  a  bargain,  and  that  it  is 
binding  upon  them  ;  and  the  effect  of  it  would  seem  to  be  to  give 
to  representations  the  force  and  influence  of  warranties.^ 

There  seems  to  be  this  difference  between  marine  policies  and 
fire  policies.  In  the  former,  a  material  misrepresentation  avoids 
the  policy  although  innocently  made  ;  in  the  latter,  it  has  this 
effect  only  when  it  is  fraudulent.  This  distinction  seems  to  rest 
upon  the  greater  capability  and  therefore  greater  obligation  of 
the  insurer  against  fire  to  acquaint  himself  fully  with  all  the  par- 
ticulars which  enter  into  the  risk.  For  he  may  do  this  either  by 
the  survey  and  examination  of  an  agent,  or  by  specific  and 
minute  inquiries.^ 

The  question  whether  a  statement  which  is  relied  upon  as  a 
representation,  be  material,  and  whether  there  is  or  has  been  a 
substantial  compliance  with  it,  (for  this  is  all  the  law  requires,) 
seems  to  be  for  the  jury  rather  than  for  the  court.*  But  it  is  not 
unfrequently  determined  by  the  court,  as  matter  of  law.^  And  if 
the  jury  find  the  representation  to  be  material,  and  to  be  false, 
the  consequence  follows  as  matter  of  law,  and  the  policy  is 
avoided.^ 

Concealment  is  the  converse  of  representation.  The  insured 
is  bound  to  state  all  that  he  knows  himself,  and  all  that  it  imports 

1  2  Duel-  on  Ins.  644  ;  1  Arnould  on  Ins.  489. 

2  Burritt  V.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  5  Hill,  188;  Williams  v.  N.  E.  Mu- 
tual Ins.  Co.  31  Maine,  224;  Murdock  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst.  210 ; 
Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  200  ;  Kennedy  v.  St.  Lawrence  Co. 
Mutual  Ins.  Co.  10  id.  285  ;  Houghton  v.  Manufacturers'  Mutual  Tire  Ins.  Co.  8  Met. 
114. 

3  Burritt  v.  Saratoga  Co.  Mutual  Ins.  Co.  5  Hill,  188;  Gates  v.  Madison  Co.  Mutual 
Ins.  Co.  2  Comst.  49 ;  Holmes  v.  Charlestown  Mutual  Fire  Ins.  Co.  10  Met.  214  ;  In- 
surance Co.  V.  Southard,  8  B.  Monroe,  648. 

*  Grant  v.  Howard  Ins.  Co.  5  Hill,  10 ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  2 
Comst.  43  ;  Percival  v.  Maine  M.  M.  Ins.  Co.  33  Maine,  242. 

.  5  Carpenter  v.  American  Ins.  Co.  1  Story,  57  ;  S.  C  16  Peters,  495;  S.  C.  4  How- 
ard, 185  ;  Columbian  Ins.  Co.  v.  Lawrencc,"2  Peters,  25:  Houghton  v.  Manufacturers' 
Ins.  Co.  8  Met.  114. 

^  6  Howell  y.  Cincinnati  Ins.  Co.  7  Ham.  (Ohio,)  pt.  1,  284.  "The  fact  is  to  be 
settled  by  the  jury,  but  it  must  be  upon  legal  and  sufficient  evidence  ;  and  where  the 
evidence  is  agreed,  it  is  a  question  of  law  whether  it  be  sufficient  or  not  to  establish 
tH-  fact."     Putnam,  J.,  in  Fletcher  u.  Commonwealth  Ins.  Co.  18  Pick.  421. 


en.  XIX.]  THE    LAW    OF   FIRE   INSURANCE.  623 

the  insurer  to  know  for  the  purpose  of  estimating  accurately 
the  risk  he  assumes.  A  suppression  of  the  truth  has  the  same 
effect  as  an  expression  of  what  is  false.  And  the  rule  as  to  ma- 
teriality, and  a  substantial  compliance  are  the  same.^  And  we 
know  no  reason  why  the  distinction  above-mentioned  between 
fire  policies  and  marine  policies  as  to  representation,  should  not 
be  made  for  the  same  reason  in  regard  to  concealment.^  Indeed, 
in  one  respect  adjudication  has  gone  somewhat  further.  Where 
the  by-laws  of  a  company  provided  that  a  surveyor  should 
always  examine,  report,  &c.,  and  there  was  a  material  conceal- 
ment by  the  insured,  the  court  say  it  was  the  duty  of  the  insurers 
to  examine  for  themselves,  and  their  neglect  shall  not  be  permit- 
ted to  operate  to  the  injury  of  the  insured  ;  and  the  judge,  deliver- 
ing the  opinion,  adds :  "  I  will  never  agree  to  extend  to  them 
(mutual  fire  insurance  companies,)  the  law  as  it  has  been  settled 
in  cases  of  marine  insurance. "  ^ 

'  Lindenau  v.  Desborough,  8  B.  &  C.  592  ;  Pirn  v.  Reid,  6  Man.  &  Gr.  1 ;  Columbian 
Ins.  Co.  2  Pet.  49  ;  Clark  v.  Manufacturers'  Ins.  Co.  8  How.  248.  The  plaintiff  iiaving 
one  of  several  warehouses,  next  but  one  to  a  boat-builder's  shop  which  took  fire,  on  the 
same  evening,  after  it  was  apparently  extinguished,  sent  instructions  to  his  agent  by 
extraordinary  conveyance  for  insuring  that  warehouse  without  apprizing  the  insurers 
of  the  neighboring  fire.  It  was  held  that  although  the  terms  of  the  insurance  did  not 
expressly  require  the  communication  of  this  fact,  the  concealment  avoided  the  policy. 
Bufe  V.  Turner,  6  Taunt.  338  ;  S.  C.  2  Marsh.  46.  Where,  pending  the  negotiations  for 
a  policy,  the  insurers  expressed  an  objection  to  insuring  property  in  the  vicinity  of 
gambling  establishments,  and  the  applicant  knew  at  tiie  time  that  there  was  one  on  the 
premises,  it  was  held  that  if  in  the  opinion  of  the  jury  the  risk  was  materially  increased 
by  such  occupancy,  the  policy  could  be  avoided.  Lyon  v.  Commercial  Ins.  Co.  2  Rob. 
(La.)  266.  So,  it  seems  that  the  fact  that  a  particular  individual  had  threatened  to 
burn  the  premises  in  revenge  for  a  supposed  injury,  should  be  disclosed  to  the  insurer. 
Curry  v.  Commonwealth  Ins.  Co,  10  Pick.  .537,  542.  The  rumor  of  an  attempt  to  set 
fire  to  a  neighboring  building  should  be  communicated.  Walden  v.  Louis.  Ins.  Co.  12 
Louis.  135.  The  insurer  should  be  informed  of  any  unusual  appropriation  of  the 
building  materially  enhancing  the  risk.  Clark  v.  Manufacturers'  Ins.  Co.  8  Howard, 
249.  Where  the  plaintiffs  underwrote  a  policy  on  the  household  goods  and  stock  in 
trade  of  a  party,  and  after  being  informed  that  the  character  of  tlie  insured  was  bad, 
that  he  had  been  insured  and  twice  burnt  out,  that  there  had  been  difficulty  in  respect 
to  his  losses  and  he  was  in  bad  i-epute  with  the  insurance  offices,  effected  a  reinsurance 
with  the  defendants  without  communicating  these  facts.  The  property  insured  was 
shortly  after  destroyed  by  fire.  It  was  held  that  there  had  been  a  material  conceal- 
ment, which  avoided  the  policy,  and  whether  occasioned  by  mistake  or  design  was 
immaterial.  N.  Y.  Bowery  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359.  A  pending 
litigation,  affecting  the  premises  insured,  and  not  communicated,  will  not  vitiate  the 
policy.     Hill  v.  Lafayette  Ins.  Co.  2  Gibbs  (Mich.)  476. 

2  Burritt  v.  Saratoga  Co.  Mutual  Ins.  Co.  5  Hill,  188;  Gates  v.  Madison  Co.  Mu- 
tual Ins.  Co.  1  Selden,  474,  475  ;  Clark  i\  Manufacturers'  Ins.  Co.  8  How.  235. 

3  Satterthwaite  v.  Mutual  Beneficial  Insurance  Association,  14  Pcnn.  State,  393. 
Burnside,  J. :  "The  offer  was  to  prove  '  that  at  the  time  when  the  application  for  insur- 
ance was  made,  and  the  policy  granted,  the  plaintiff's  gave  to  the  secretary  of  the  com- 
pany a  statement  of  the  personal  property  they  desired  to  have  insured,  and  they 
omitted  to  state  that  there  was  a  corn-kiln  attached  to  the  mill,  in  which  personal 
property  was  deposited  —  that  the  fire,  which  consumed  the  building,  originated  in  the 


524  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIX. 

Insurers  must  be  understood  as  knowing  all  those  matters  of 
common  information,  that  are  as  much  within  their  reach,  as  in 
that  of  the  insured ;  and  these  need  not  be  especially  stated.^ 
But  any  special  circumstance,  as  a  great  number  of  fires  in  the 
neighborhood,  and  the  probability  or  belief  that  incendiaries  were 
at  work,  should  certainly  be  communicated  ;  and  silence  on  such 
a  point,  —  especially  if  the  place  of  business  of  the  insurers  was 
at  a  considerable  distance  from  the  premises,  —  would  operate 
as  a  fraud  and  avoid  the  policy.^  And  any  questions  asked 
must  be  answered,  and  all  answers  must  be  as  full  and  precise 
as  the  question  requires.  Concealment  in  an  answer  to  a  specific 
question  can  seldom  be  justified  by  showing  that  it  was  not  ma- 
terial.^    Thus,  in  general,  nothing  need  be  said  about  title.     But 

corn-kiln.  Anil  further,  that  the  secretary  and  company  had  no  knowledge,  when  the 
policy  of  insurance  was  issued,  or  at  anjr  time,  till  after  the  fir6,  that  there  was  a  corn- 
kiln  attached  to  the  mill ;  and  if  they  had  knoAvn  that  fact,  the  rate  of  insurance  would 
have  been  higher.  And  that  one  of  the  plaintiffs  admitted  that  it  was  not  made  known 
to  the  company  that  there  was  a  corn-kiln,  when  the  contract  of  insurance  was  effected.' 
The  court  rejected  this  offer,  and  this  is  the  error  assigned.  If  the  company  had  not 
reserved  all  subsequent  duties  of  survey  and  examination  to  themselves  and  their  own 
ofiScers,  after  the  application  was  made  for  the  insurance,  there  would  be  some  weight 
in  this  offer,  and  it  ought  to  have  gone  to  the  jury;  but  as  they  have  imposed  no  duty, 
beyond  the  application,  on  the  insured,  it  was  the  business  of  the  company,  before  they 
issued  the  policy,  to  see  whether  the  corn-kiln  was  adjacent  to  the  mill  insured,  as  well 
as  to  examine  all  other  buildings  adjacent  thereto.  If  the  company  had  made  in- 
quiry, and  a  fiilse  statement  had  been  given,  it  no  doubt  would  have  been  receivable  in 
evidence.  And  if  given  by  the  plaintiffs,  or  either  of  them  or  their  agent,  it  would 
have  tended  to  avoid  the  policy.  But  the  mere  omission  by  the  plaintiffs  when  they 
made  their  application  to  insure  grain  in  the  mill,  to  return  the  corn-kiln  or  to  say 
anything  about  it,  when  it  is  well  known  that  there  are  corn-kilns  attached  to  half  or 
more  of  the  grist  and  merchant  mills  in  Bucks  county,  would  not  excuse  the  officers  of 
the  company,  who  neglected  inquiry,  from  gross  negligence.  No  men  of  common 
prudence  would  grant  a  policy  on  the  grain,  in  a  grist  or  merchant  mill,  without  in- 
quiry into  its  situation,  and  the  situation  of  the  adjacent  buildings.  As  regards  this 
mutual  insurance  company,  under  the  rules  and  regulations,  the  evidence  would  have 
been  irrelevant,  and  the  court  were  right  in  refusing  to  receive  it." 

1  Clark  V.  Manufacturers'  Ins.  Co.  8  How.  249. 

^  N.  Y,  Bowery  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359  ;  "VValden  v.  Louis. 
Ins.  Co.  12  Louis.  135  ;  Bufe  v.  Turner,  6  Taunt.  338  ;  S.  C.  2  Marsh.  46. 

2  Burritt  v.  Saratoga  Co.  Mutual  Ins.  Co.  5  Hill,  188;  Gates  v.  Madison  Co.  Mutual 
Ins.  Co.  3  Barb.  73  ;  S.  C.  3  Comst.  43.  Possibly,  it  may  be  inferred  from  the  above 
authorities,  that  the  concealment  must  in  the  case  stated  in  the  text,  be  material  in 
order  to  avoid  the  policy,  unless  the  policy  specially  gives  to  a  concealment  the  effect 
of  a  warranty.  But  we  should  say  that  this  fact  would,  generally  at  least,  be  made 
material  by  the  specific  question  respecting  it,  and  that  the  answer  would  have  the 
effect  of  a  warranty,  unless  the  question  were  obviously,  or  on  clear  evidence,  quite 
irrelevant  and  unimportant ;  but  this  case  would  not  be  likely  to  occur.  If  there  were 
a  provision  in  the  policy,  that  a  certain  fact  if  existing,  must  be  stated,  silence  in 
reference  to  it  would  be  fiital,  however  immaterial  the  fact.  In  Loehner  v.  Home  Mut. 
Ins.  Co.  17  Missouri,  256,  Scott,  J.,  says:  "The  thirteenth  section  of  the  charter  pro- 
vides that,  if  the  assured  has  a  lease  estate  in  the  buildings  insured,  or,  if  the  prem- 
ises be  incumbered,  the  policy  shall  be  void,  unless  the  true  title  of  the  assured  and  the 
incumbrances  be  expressed  thereon.  There  is  no  question  but  that  the  buildings  in- 
sured were  a  leasehold  estate  and  that  there  was  an  incumbi-ance  on  them  at  the  date 


en.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  '525 

if  it  be  inquired  about,  full  and  accurate  answers  must  be 
made.' 

Where  the  insurance  company  has,  by  the  terms  of  the  policy, 
a  lien  upon  or  interest  in  the  premises  insured,  to  secure  the  pre- 
mium note,  here  it  is  obvious  that  any  concealment  of  incum- 
brance or  defect  of  title  would  operate  as  a  fraud,  and  defeat 
the  policy.^  But  in  all  such  cases  it  is  probable  that  specific 
questions  are  put  respecting  the  estate  and  title  of  the  insured. 

A  requirement  that  all  buildings  standing  within  a  certain  dis- 
tance of  the  building  insured,  should  be  stated,  might  not  always 
be  considered  as  applicable  to  personal  and  movable  property.^ 
Still,  an  insurance  of  chattels,  described  as  in  a  certain  place  or 
building,  would  be  held  to  amount  to  a  warranty  that  they 
should  remain  there ;  or  rather  it  would  not  cover  them  if  re- 
moved into  another  place  or  building,  unless  perhaps,  by  some 
peculiar  phraseology,  the  parties  expressed  their  intention  that 
the  insured  was  to  be  protected  as  to  this  property  wherever  it 
might  be  situated.*      It  is   not  uncommon  to  insure  goods  in 

of  the  policy.  The  application  contains  an  interrogatory,  whose  aim  was  to  ascertain 
whetlier  there  was  an  incumbrance  on  the  premises  proposed  to  be  insured,  but  no 
response  is  made  to  it ;  leaving  room  for  the  inference  that  none  existed.  The  char- 
ter then  made  the  policy  void.  2.  The  phiintiffs  were  not  at  liberty  to  obviate  this  ob- 
jection by  showing  that  the  agent  of  the  company  was  informed  of  the  existence  of  an 
incumbrance  at  the  time  of  the  application,  but  that  he  refused  to  write  down  the  an- 
swer, saying  that  the  incumbi"ance  was  too  tritling.  Independently  of  the  statute, 
which  required  the  incumbrance  to  be  expressed  in  the  policy  at  the.  peril  of  its  being 
toid,  there  was  a  memorandum  indorsed  on  it,  which  made  Ijnown  tliat  the  company 
would  be  bound  by  no  statement  made  to  the  agent  not  contained  in  the  application. 
The  facts  being  as  represented,  they  could  not  give  the  plaintiff's  a  right  of  action  on 
the  policy  in  the  teeth  of  the  statute  and  against  the  terms  of  the  contract.  If  the 
conduct  of  the  agent  was  such  as  is  alleged,  ho  was  guilty  of  a  gross  fraud,  as  is  shown 
by  his  setting  up  this  defence,  which  would  avoid  the  policy  and  give  a  right  of  action 
for  the  recovery  of  the  premium,  but  could  not,  for  reasons  given,  entitle  the  plaintiffs 
to  an  action  on  the  policy. 

^  Where  the  mortgagor  whose  right  to  redeem  had  been  seized  on  execution,  not 
being  specially  inquired  of  as  to  the  state  of  his  title,  stated  the  property  to  be  his  own, 
on  the  application,  this  was  held  to  be  no  material  misrepresentation  or  (concealment. 
Strong  V.  Manufacturers'  Ins.  Co.  10  Pick.  40  ;  Delahay  v.  Memphis  Ins.  Co.  8  Humph. 
684.  So  where  the  store  insured  stood  on  the  land  of  another  person  under  an  oral 
agreement,  terminable  at  the  pleasure  of  the  owner  of  the  land  on  six  months'  notice,  no 
'inquiry  being  made  as  to  the  title,  the  concealment  was  held  not  material.  Fletcher  v. 
Commonwealth  Ins.  Co.  18  Pick.  419.  So  where  a  tenant  from  year  to  year  insured 
the  building  as  "his  building."  Niblo  v.  North  American  Ins.  Co.  1  Sandf.  551  ;  Ty- 
ler V.  iEtna  Ins.  Co.  12  Wend.  507  ;  S.  C.  16  id.  385.  But  see  Catron  v.  Tcnn.  Ins. 
Co.  6  Humph.  176  ;  Columbian  Ins.  Co.  v.  Lawrence,  2  Peters,  25  ;  Carpenter  v.  Wash- 
ington Ins.  Co.  16  id.  495. 

^  Locke  V.  North  American  Ins.  Co.  1.3  Mass.  67. 

3  Trench  v.  Chenango  Co.  Mutual  Insurance  Co.  7  Hill,  122.  But  the  authority  of 
this  case  is  questioned.  Wilson  v.  Herkimer  Co.  Mutual  Ins.  Co.  2  Selden,  53  ;  Ken- 
nedy V.  St.  Lawrence  Co.  Mutual  Ins.  Co.  10  Barb.  285.     See  ante,  p.  524,  n.  3. 

*  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191. 


526  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

transitu  against  fire  ;   but  then  it  is  usual  to  name  the  termini 
from  which  and  to  which  the  goods  are  passing.^ 


SECTION  VII. 

OF    THE   KISK   INCUKUED   BY  THE   INSURERS. 

At  the  time  of  the  insurance,  the  property  must  be  in  exist- 
ence, and  not  on  fire,  and  not  at  that  moment  exposed  to  a 
dangerous  fire  in  the  immediate  neighborhood  ;  because  the  in- 
surance assumes  that  no  unusual  risk  exists  at  that  time.^ 

The  risk  taken,  is  that  of  fire.  And  therefore  the  insurers  are 
not  chargeable  if  the  property  be  destroyed  or  injured  by  the  indi- 
rect effect  of  excessive  heat ;  or  by  any  effect  which  stops  short 
of  ignition  or  combustion.  But  if  there  be  actual  ignition,  the 
insurers  are  liable  for  the  immediate  consequences ;  as  the  injury 
from  water  used  to  extinguish  the  fire.  Or  injury  to  or  loss  of 
goods  caused  by  their  removal  from  immediate  danger  of  fire ; 
but  not  from  a  mere  apprehension  from  a  distant  fire,  even  if  it 
be  reasonable  ;  and  not  if  the  loss  or  injury  might  have  been 
avoided  by  even  so  much  care  as  is  usually  given  in  times  of  so 
much  excitement  and  bustle.^  In  some  instances  the  policies 
require  that  the  insured  should  use  all  possible  diligence  to  pre; 
serve  their  goods  ;  and  such  a  clause  would  strengthen  the  claim 
for  injury  caused  by  an  endeavor  to  save  them  by  removal.*  So 
the  insurers  are  liable  for  injury  or  loss  sustained  by  the  blowing 
up  of  buildings  to  arrest  the  progress  of  a  fire.^  But  we  should 
say  that  if  goods  were  damaged  by  water  thrown  on  to  extinguish 
a  supposed  fire  when  there  was  none  in  fact ;  or  by  the  wholly 
unnecessary  and  useless  destruction  of  a  house  distant  from  the 
fire,  the  insurers  should  not  be  held. 

It  must  now  be  conceded  to  modern  science,  that  lightning  is 

1  See  ante,  p.  523,  n.  1. 

2  Babcock  v.  Montgomery  Co.  Mutual  Ins.   Co.  6  Barb.  637,  643 ;  S.  C.  4  Comst. 
326  ;  Austin  v.  Drewe,  6  Taunt.  436  ;  4  Camp.  360. 

Case  V.  Hartford  Fire  Ins.  Co.  13  III.  676  ;  Babcock  v.  Montgomery  Co.  Mutual 
Ins.  Co.  6  Barb.  640;   Hillier  v.  Alleghany  Co.  Mut.  Ins.  Co.  3  Btrm  (Penn.)  470. 
*  Case  V.  Hartford  Fire  Ins.  Co.  13  111.'  676. 
Cuy  Fire  Ins.  Co.  v.  Corlies,  21  Wend.  367 ;  Pentz  v.  Receivers  of  iEtna  Fire  Ins. 
Lo.  3  Edw.  c.  341 ;  S.  C.  9  Paige,  568  ;  Gordon  v.  Ilimmington,  1  Camp.  123. 


CH.  XIX.]  THE   LAW   OF   FIRE    INSURANCE.  527 

not  fire ;  and  if  property  be  destroyed  by  lightning,  the  insurers 
are  not  liable,  unless  there  was  also  ignition.' 

An  explosion,  caused  by  gunpowder,  is  a  loss  by  fire  ;^  not  so 
it  is  said,  is  an  explosion  caused  by  steam.^  Scientifically,  it 
misht  be  difficult  to  draw  a  wide  distinction  between  these 
cases  ;  but  the  difference  is  sufficient  for  the  law. 

Whether,  when  the  negligence  of  the  insured  or  his  servants 
is  to  be  considered  as  the  sole  or  direct  cause  of  the  fire  or  loss, 
the  insurers  can  be  held,  has  been  somewhat  considered.  And  as 
this  is  the  most  common  and  universal  danger,  and  the  very  one 
which  induces  most  persons  to  insure,  there  has  been  some  dis- 
position to  say  that  no  measure  or  kind  of  mere  negligence  can 
operate  as  a  defence.  And  in  effect  this  is  almost  the  law.*  But 
if  the  loss  be  caused  by  negligence  of  the  insured  himself,  of  so 
extreme  and  gross  a  character,  that  it  was  Irardly  possible  to 
avoid  the  conclusion  of  fraud,  the  defence  might  be  a  good  one, 
although  there  were  no  direct  proof  of  fraud.^  That  the  fire  was 
caused  by  the  insanity  of  the  insured  should  be  no  defence. 

1  Babcock  v.  Montgomery  Co.  Mutual  Ins.  Co.  6  Barb.  637 ;  S.  C.  4  Comst.  326 ; 
Kenniston  v.  Mer.  Co.  Mutual  Ins.  Co.  U  N.  H.  341. 

^  See  Grim  v.  Phoenix  Ins.  Co.  13  Johns.  451. 

^  Millaudon  v.  N.  O.  Ins.  Co.  4  La.  Ann.  15,  where  it  was  provided  by  the  condi- 
tions annexed  to  a  policy  of  insurance  against  fire,  that  the  company  shall  not  be  liable 
"  for  any  loss  occasioned  by  the  explosion  of  a  steam-boiler,  or  explosions  arising  from 
any  other  cause  unless  specially  specified  in  the  policy,"  the  company  was  held  not 
liable,  where  fire,  which  was  directly  and  wholly  occasioned  by  an  explosion,  was  the 
proximate  cause  of  tlic  loss.  St.  John  v.  American  Mutual  Fire  &  Marine  Ins.  Co.  1 
Duer  (Sup.  Ct.)  371  ;  Same  case,  1  Kernan,  516. 

*  Shaw  V.  Kobberds.  6  Ad.  &  El.  75,  83,  Denman,  C.  J. :  "  One  argument  more  re- 
mains to  be  noticed,  viz :  that  the  loss  here  arose  from  the  plaintift"s  own  negligent  act 
in  allowing  the  kiln  to  be  used  for  a  purpose  to  which  it  was  not  adapted.  There  is 
no  doubt  that  one  of  the  objects  of  insurance  against  fire  is  to  guard  against  the  negli- 
gence of  servants  and  others  ;  and  therefore,  the  simple  fact  of  negligence  has  never 
been  held  to  constitute  a  defence.  But  it  is  argued  that  there  is  a  distinction  between 
the  negligence  of  servants  and  strangers  and  that  of  the  assured_  himself.  We  do  not 
see  any  ground  for  sucii  a  distinction,  and  are  of  opinion  that  in  the  absence  of  all 
fraud,  the  proximate  cause  of  the  loss  only  is  to  be  looked  to."  This  doctrine  is  now 
well  settled  law  in  this  country.  Patapsco  Ins.  Co.  v.  Coulter,  3  Peters,  222  ;  Colum- 
bia Ins.  Co.  L'.  Lawrence,  10  Peters,  517,  518 ;  Waters  r.  Merchants'  Louisville  Ins. 
Co.  11  id.  213,  225  ;  Perrin  v.  Protection  Ins.  Co.  11  Ohio,  147,  overruling  Lodwicks  v. 
Ohio  Ins.  Co.  5  id.  433  ;  St.  Louis  Ins.  Co.  v.  Glasgow,  8  Missouri,  713;  Mathews  v. 
Howard  Ins.  Co.  13  Barb.  234,  overruling  Grim  v.  Phoenix  Ins.  Co.  13  Johns.  451  : 
Hynds  v.  Schenectady  Co.  Mut.  Ins.  Co.  16  Barb.  119  ;  St.  John  v.  American  Mut,  Fire 
fc'Marine  Ins.  Co.  TDuer,  (Sup.  Ct.)  371  ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  1 
Selden,  469;  Copeland  t'.  New  England  Ins.  Co.  2  Met.  432;  Butman  i'.  Monmouth 
Eire  Ins.  Co.  35  Maine,  227  ;  Catlin  v.  Springfield  Fire  Ins.  Co.  1  Sumner,  434 ;  Hen- 
derson V.  Western  Marine  &  Fire  Ins.  Co.  10  Rob.  (La.)  164. 

5  Chandler  v.  Worcester  Fire  Ins.  Co.  3  Cush.  328.  In  this  case  it  was  held  that 
the  assured  may  be  guilty  of  such  gross  negligence  and  misconduct,  as  although  not 
amounting  to  a  fraudulent  intent  to  burn  the  building,  yet  will  preclude  him  from 
recovering  for  a  loss. 


528  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

In  Beaumont's  work  on  Fire  and  Life  Insurance,  he  gives  some 
instances  drawn  from  tlie  practice  of  English  Assurance  Compa- 
nies, a  part  of  which  at  least,  rest  upon  sound  principles,  and  illus- 
trate what  is  probably  the  law,  although  not  yet  determined  by 
adjudication.  Thus,  if  implements  or  apparatus  used  for  fire,  as 
ranges,  grates,  or  the  like,  are  destroyed  by  fire,  this  loss  gives  no 
claim  on  the  insurers.  But  if  the  chimney  or  other  parts  of  the 
house  in  which  the  apparatus  is  set,  is  injured  by  the  same  fire, 
for  this  the  insurers  are  liable.  He  says  also  that  where  the  loss 
is  caused  only  by  an  excess  of  the  heat  or  fire  which  was  de- 
signedly used,  they  are  not  liable.^  But  we  should  have  some 
doubt  as  to  this  rule  ;  especially  as  applied  to  clothes  hung  up  to 
dry,  and  catching  fire  from  the  flame,  and  the  like.  Nor  are  we 
satisfied  that  if  a  haymow  takes  fire  by  its  own  fermentation,  it 
is  not  a  loss  within  the  policy.  If  quicklime  be  so  heated  by 
water,  as  to  set  on  fire  the  barrels  or  other  wood  near  it,  it  may 
be  said  that  the  lime  itself  is  not  burnt,  and  might  not  be  hurt 
by  being  burnt,  and  if  destroyed  by  water,  is  not  a  loss  within 
the  policy.  But  if  lime  be  put  in  a  building,  and  set  fire  to  it, 
and  for  the  purpose  of  extinguishing  this  fire,  water  is  so  used  as 
to  slack  the  lime  and  render  it  valueless,  it  would  be  a  loss  within 
the  policy,  unless  we  say  that  no  loss  gives  a  claim  if  the  thing 
destroy(?d  contribute  to  the  loss,  proximately  or  remotely.  We 
are  aware  of  no  such  rule.  Thus,  if  cotton,  by  fermentation,  ig- 
nited, and  set  fire  to  a  mill,  undoubtedly  the  loss  of  the  mill  would 
be  within  the  policy,  or  the  loss  of  other  and  disconnected  cotton. 
And  we  see  no  good  reason  for  saying  that  the  loss  of  the  very 
cotton  of  which  the  spontaneous  combustion  caused  the  fire, 
should  not  be  within  the  policy. 

There  are  various  exceptions  in  the  policies  used  in  this  coun- 
try ;  but  they  have  not  given  rise  to  much  adjudication,  and  do 
not,  generally,  need  explanation.  It  may  be  remarked,  that 
the  exception  of  "  military  or  usurped  power,"  or  any  similar 
phrase,  would  not  be  extended  so  as  to  cover  a  common  mob.^ 
But  if  the  word  "riot"  be  used,  insurers  are  not  liable  for  a  fire 
caused  by  a  tumultuous  assemblage,  whatever  may  have  been 
the  original  purpose  of  the  meeting.^ 

^  Sec  u?ite,  p.  507,  n.  3. 

2  Drinkwater  v.  Corporation  of  London  Ass.  Co.  2  Wils.  363. 

3  Dupia  V.  Mutual  Ins.  Co.  5  La.  Ann.  482.     See  Spruill  v.  N.  C.  Mutual  Life  Ins. 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  529 

If  tlie  insured  be  charged  with  burning  the  property  insured 
himself,  it  has  been  held  in  England,  that  this  defence  could  be 
supported  only  by  evidence  which  would  sulfice  to  convict  the 
plaintifT,  if  tried  upon  an  indictment.'  But  in  this  country,  it  has 
been  ruled  otherwise.^ 


SECTION  VIII. 

OF    VALUATION. 

Valuation,  precisely  as  it  is  understood  in  a  marine  policy, 
seldom  enters  into  a  fire  policy  —  never,  perhaps,  in  a  policy  made 
by  any  of  those  mutual  companies,  who  now  do  a  very  large  part 
of  the  insurance  of  this  country.  And  quite  seldom  is  a  building 
valued  when  insured  by  a  stock  company.  If  a  loss  happens, 
whether  it  be  total  or  partial,  the  insurers  are  bound  to  pay  only 
so  much  of  the  sum  insured  as  will  indemnify  the  assured.^  But, 
as  care  is  always  taken  —  and  sometimes  required  bylaw — to 
insure  upon  any  house  less  than  its  value,  it  seldom  happens,  and, 
if  the  proper  previous  precautions  are  taken,  should  never  happen, 
that  any  question  arises  in  case  of  a  total  destruction  of  a  build- 
ing by  fire. 

But  mutual  companies  are  usually  forbidden  by  their  charter 
to  insure  more  than  a  certain  proportion  of  the  value  of  a 
building:  and  this  requires  a  valuation  in  the  policy,  which  is 
conclusive,  for  some  purposes,  against  both  parties.  Of  course 
the  insured  can  never  be  held  to  pay  more  than  the  sum  insured. 
And  if  their  charter  or  by-laws  permit  a  company  to  insure  only 
a  certain  proportion  of  the  value,  as  three  fourths,  —  on  the 
one  hand,  if  the  company  insure  more  than  that  proportion,  as 
$3,500  on  property  valued  at  $4,000,  they  are  held  to  pay  only 
$3,000,  and  the  assured  cannot  show  that  the  building  was  really 
worth  more  than  $4,000.^     And,  on  the  other  hand,  the  valua- 

Co.  1  Jones,  (North  Car.)  12G.  An  unlawful  use  of  the  house,  which  is  not  included 
in  the  exceptions,  where  it  was  not  tlie  cause  of  the  fire,  does  not  avoid  tlic  policy. 
Boardman  i'.  Merrimack  Mutual  Fire  Ins.  Co.  8  Cush.  58.3. 

1  Thurtell  r.  Beaumont,  1  Bing.  339;  S.  C.  8  Moore,  612. 
■  2  Hoti'man  r.  Western  Marine  &  Fire  Ins.  Co.  1  La.  Ann.  216;  Schmidt  v.  N.  Y. 
Union  Mutual  Fire  Ins.  Co.  1  Gray,  (Mass.)  529.     And  evidence  of  character  is  not 
admissible  on  such  an  issue.     Fowler  v.  ^'Etna  Fire  Ins.  Co.  6  Covven,  675  ;  Schmidt  v. 
N.  Y.  Union  Mutual  Fire  Ins.  Co.  supra. 

3  Niblo  V.  Nortli  American  Fire  Ins.  Co.  1  Sandf.  551. 

*  Holmes  v.  Charlestown  Mutual  Bire  Ins.  Co.  10  Met.  211. 

45 


530  ELEI\JENTS   OF   MERCANriLE   LAW.  [CH.  XIX. 

tion,  if  not  fraudulent,  is  conclusive  against  the  insurers,  and 
they  cannot  show,  in  defence,  that  the  building  was  worth  less.' 

"We  know  nothing  to  prevent  the  parties  from  making  a  valued 
policy,  if  they  see  fit  to  do  so,^  although  this  has  been  questioned. 
It  is  not  uncommon  for  companies  who  insure  chattels, — as  plate, 
pictures,  statuary,  books,  or  the  like, —  to  agree  on  what  shall  be 
the  value  in  case  of  loss. 

Sometimes  the  policy  reserves  to  the  insurers  the  right  to  have 
the  valuation  made  anew  by  evidence,  in  case  of  loss.  Then  if 
a  jury  find  a  less  valuation,  the  insurers,  pay  the  same  proportion 
of  the  new  value  which  they  had  insured  of  the  former  valua- 
tion.^ 

The  value  which  the  insurers  on  goods  must  pay,  is  their  value 
at  the  time  of  the  loss.  And  it  has  been  held,  that  a  fair  sale  at 
auction,  with  due  precaution,  will  be  taken  to  settle  that  value 
after  the  fire,  provided  the  insurers  have  reasonable  notice,  or 
knowledge  that  the  auction  is  to  take  place.* 


SECTION  IX. 

OF    ALIKXATION. 

Policies  against  fire  are  personal  contracts  between  the  insured 

1  Borden  v.  Hin;i;ham  Mutual  Fire  Ins.  Co.  18  Pick.  523  ;  Fuller  v.  Baston  Mutual 
Fire  Ins.  Co.  4  Mete.  206;  Kane  ;;.  Com.  Ins.  Co.  8  Johns.  229;  Cushnian  v.  N.  \V. 
Ins.  Co.  34  Maine,  487. 

'  In  an  action  on  a  policy  of  insurance  against  fire,  on  merchandise,  among  which 
were  380  kegs  of  manufactured  tobacco,  stated  on  tlie  back  of  the  policy  "as  worth 
$9,600,"  \57  kegs  of  which  were  destroyed  by  fire.  The  insurance  company  contended 
tliat  the  jdaintitf  was  entitled  to  receive  only  the  first  cost  of  the  tobacco,  together 
witii  the  cost  of  manufacturing  it,  and  a  reasonable  allowance  for  his  attention,  and  the 
use  and  risk  of  his  capital  employed,  it  was  held  that  the  insured  was  entitled  to  re- 
cover for  the  loss  of  the  157  kegs,  according  to  the  valuation  of  the  whole  number  of 
kegs,  and  not  the  cost  of  the  tobacco  at  the  manufactory  or  prime  cost;  and  that  where 
there  is  an  actual  or  total  loss  of  any  article  distinctly  valued  in  the  policy,  that  valua- 
tion is  in  the  nature  of  litpiidated  damages,  and  must  govern  in  all  cases.  Harris  v. 
Eagle  Fire  Company,  5  Johns.  368.  The  late  authorities  require,  that  in  order  to  be  a 
valued  policy,  the  sum  insured  must  he  stated  expressly  to  lie  a  valuation.  Laurent  v. 
Chatham  Fire  Ins.  Co.  1  Hall,  41 ;  Wallace  v.  Ins.  Co.  4  Louis.  289 ;  Millaudon  v. 
Western  Ins.  Co.  9  id.  32. 

^  Posty  Hampshire  Mutual  Fire  Ins.  Co.  12  Met.  555. 

*  Hoffman  v.  Western  Marine  &  Fire  Ins.  Co.  1  La.  Ann.  216.  The  profits  which 
the  insured  might  ha^'e  made  in  his  business  carried  on  in  the  building,  had  no  loss  oc- 
curred, cannot,  unless  insured  as  such,  be  taken  into  consideration  in  assessing  the 
damages.  Niblo  v.  N.  A.  Fire  Ins.  Co.  1  Sandf  551.  The  actual  value  of  the  building, 
as  such,  without  reference  to  its  productiveness,  or  the  liability  of  the  insured  to  be 
obliged  to  remove  it  from  a  leasehold  estate,  and  thus  lessen  its  value,  is  the  measure 
of  damages.    Laurent  v.  Chatham  Fire  Ins.  Co.  f  Hall,  41. 


en.  XIX.]  THE    LAW    OF   FIKE   INSURANCE.  531 

and  the  insurer,  and  do  not  pass  to  any  other  party,  without  the 
express  consent  of  the  insurers.' 

It  is  essential  to  the  validity  and  ctlicacy  of  this  contract, 
that  the  insured  have  an  interest  in  the  property  when  he  is  in- 
sured, and  also  when  the  loss  takes  place;  for  otherwise  it  is  not 
his  loss,  and  he  can  have  no  claim  for  indemnity.^  If,  therefore, 
he  alienates  the  whole  of  his  interest  in  the  property  before  the 
loss,  he  has  no  claim  ;  and  if  he  alienates  a  part,  retaining  a  par- 
tial interest,  he  has  only  a  partial  and  proportionate  claim.^ 

After  a  loss  has  occurred,  the  right  of  the  insured  to  indem- 
nity is  vested  and  fixed  ;  and  this  right  may  be  assigned  for  value, 
so  as  to  give  an  equitable  claim  to  the  assignee,  without  the  con- 
sent of  the  insurers.^  But  we  should  not  consider  a  mere  assign- 
ment or  conveyance  of  the  premises,  as  of  itself  an  assignment 
of  the  right  to  recover  on  a  policy  of  insurance  for  a  previous 
loss,  unless  something  in  the  contract,  either  of  word  or  fact, 
showed  clearly  that  this  was  intended  by  the  parties. 

Policies  against  fire  contain  a  provision,  that  an  assignment  of 
the  property,  or  of  the  policy,  shall  avoid  the  policy.  So,  gener- 
ally, it  is  hardly  worth  while  to  inquire  what  right  an  assignee, 
without  consent,  would  acquire  at  common  law,  or  in  equity, 
w^here  there  is  no  such  provision.  We  think,  however,  that  the 
weight  of  authority  is  strongly,  though  not  conclusively,  against 
his  acquiring  any  claim.^  There  seems  to  be  some  difference  be- 
tween fire  policies  and  marine  policies,  on  this  subject;  the  neces- 
sity of  consent  being  held  more  strongly  in  the  case  of  fire  poli- 
cies;^ but  it  is  not  easy  to  see  a  very  good  reason  for  this  differ- 
ence. 

Where,  by  the  policy  itself,  a  transfer  of  the  interest  of  the  in- 

1  Granger  v.  Howard  Tns.  Co.  5  Wend.  200;  Lane  v.  Maine  Mutual  Fire  Ins.  Co.  3 
Fairfield,  (.Maine,)  44  ;  Morrison  v.  Tennessee  Marine  &  Fire  Ins.  Co.  18  Missouri,  262  ; 
Eollins  V.  Coliimhian  Fire  Ins.  Co.  .5  Foster,  (N.  H.)  204.  This  doctrine  was  early  held 
in  England.  Lyneh  v.  Dalzell,  4  Brown,  P.  C.  431,  (1729)  ;  Sadler's  Co.  v.  Badcock, 
2  AtkT554,  (1743.) 

"  Carroll  v.  Boston  Marine  Ins.  Co.  8  Mass.  515 ;  Wilson  v.  Hill,  3  Met.  66. 

3  ^.tna  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  385,  401. 

*  Wilson  V.  Hill,  3  Met.  69  ;  Brichta  v.  N.  Y.  Lafayette  Ins.  Co.  2  Hall,  372.  But 
see  Lynch  v.  Dalzell,  4  Brown,  P.  C  431. 

s  In  Smith  v.  Saratoga  Mm.  Fire  Ins.  Co.  1  Hill,  500,  it  is  said  that  the  policy,  "in 
its  own  nature,  is  assignable  so  as  to  pass  an  equitable  interest  to  the  assignee." 

8  Sadler's  Co.  v.  Badcock,  2  Atk.  554.  Lord  Hardwicke  :  '•  Now  these  insurances 
from  fire  have  been  introduced  in  later  times,  and  therefore  differ  from  insurance  of 
ships,  because  there  interest  or  no  interest  is  almost  constantly  inserted,  and  if  not  in- 
serted, you  cannot  recover,  unless  you  prove  a  property." 


532  ELEMENTS  OF  MERCANTILE  LAW.        [CH.  XIX. 

sured  is  forbidden,  it  seems  to  be  held,  but  not  uniformly,  that 
this  proliibition  reft^rs  to  his  interest  in  the  property  insured,  and 
not  in  the  contract  of  insurance.^ 

Nothing  is  properly  an  alienation  of  the  property,  which  is  less 
than  an  absolute  conveyance  of  the  title  thereto.^  But  where 
an  insured  conveyed  half  the  premises  in  fee,  taking  back  a  lease 
of  the  same  for  five  years  at  a  nominal  rent,  and  agreeing  to 
keep  and  leave  the  premises  in  repair,  it  was  held  to  be  to  an 
alienation,  although  the  insured  would  have  been  bound,  as  lessee, 
to  rebuild.  Where  the  insured  mortgaged  the  premises,  and  as- 
signed the  policy  to  the  mortgagee,  with  the  consent  of  the  in- 
surer, before  such  conveyance,  it  was  held  that  the  policy  remained 
valid  as  to  the  mortgagee,  and  for  the  amount  of  the  debt,  on 
the  ground  that  the  insured  could  do  nothing  to  affect  the  rights 
of  the  assignee  without  his  privity.  In  this  case  it  was  also 
held,  that  payment  of  an  assessment  after  the  property  is  burned, 
does  not  remove  the  effect  of  an  alienation.^  A  conveyance  in- 
tended to  secure  a  debt,  will  be  treated  in  equity  as  a  mortgage, 
but  it  does  not  terminate  the  interest  of  the  insured.*  A  con- 
tract to  convey  is  not  an  alienation.^  Nor  is  a  conditional  sale, 
where  the  condition  is  precedent,  and  is  not  yet  performed.^  Nor 
is  a  mortgage,  not  even  after  breach,  and,  perhaps,  entry  for  a 

1  Carpenter  v.  Providence  Washington  Ins.  Co.  16  Peters,  502.  Where  a  policy 
issued  by  a  mutual  fire  insurance  company  contained  this  clause:  "  The  interest  of  the 
assured  in  this  policy  is  not  assignable  witliout  the  consent  of  said  company  in  writing, 
and  in  case  of  any  transfer  or  termination  of  the  interest  of  the  assured,  either  by  sale 
or  otherwise,  without  such  consent,  this  policy  shall  thenceforth  be  void,  and  of  no 
effect,"  it  was  held  that  this  clause  did  not  merely  nullify  the  assignment  of  the  policy, 
when  made  without  consent,  but  operated  in  the  policy.  Smith  v.  Saratoga  Co.  Mu- 
tual Fire  Ins.  Co.  1  Hill.  497  ;  3  id.  .508.  As  to  the  meaning  and  effect  of  the  word 
"assigns,"  see  an  interesting  case,  Holbrook  v.  American  Ins.  Co.  1  Curtis,  198. 

2  It  has  been  held,  that  a  sale  by  one  joint  owner  of  his  interest  in  the  property  to 
the  other,  does  not  avoid  the  policy.  Tillou  v.  Kingston  Mutual  Ins.  Co.  7  Barb.  570. 
But  contra,  Howard  v.  Albany  Ins.  Co.  .3  Denio,  301  ;  Murdock?;.  Chenango  Co.  Mutual 
Ins.  Co.  2  Comst.  210  ;  Tillou  v.  Kingston  Mutual  Ins.  Co.  was  overruled  in  the  Court  of 
Appeals,  and  such  sale  held  to  avoid  the  policy,  except  where  the  rights  of  third  par- 
ties had  intervened.  1  Selden,  405.  An  assignment  by  one  partner  of  his  interest  in 
the  partnership  property  to  the  otiier,  is  held  not  to  prevent  a  recovery  in  case  of  loss. 
Wilson  V.  Genesee  Mutual  Ins.  C.  IG  Barb.  511.  But  a  dissolution  of  the  partnership 
before  loss,  and  a  division  of  the  goods,  so  that  each  partner  owned  distinct  portions, 
was  held  to  be  in  violation  of  a  condition  against  "  any  transfer  or  change  of  title  in 
the  property  insured."  Dreher  v.  vEtna  Fire  Ins.  Co.  18  Missouri,  128.  Sec  McMas- 
ters  V.  Westchester  Co.  Mutual  Ins.  Co.  25  Wend.  379. 

3  Boynton  v.  Clinton  &  Essex  Mut.  Ins.  Co.  16  Barb.  254. 
*  Holbrook  v.  American  Ins.  Co;  1  Curtis,  198. 

5  Trumbull  v.  Portage  Co.  Mutual  Ins.  Co.  12  Ohio,  305;  Masters  v.  Madison  Co. 
Mutual  Ins.  Co.  11  Barb.  624  ;  Perry  Co.  Ins.  Co.  v.  Stewart,  19  Pcnn.  State,  45. 
^  Tittemore  v.  Vt.  Mutual  Fire  Ins.  Co.  20  Vt.  546. 


CH.  XIX.]  TnE   LAAV   OF   FIRE   INSURANCE.  533 

breach,  and  not  until  foreclosure.'  Nor  selling  and  immediately 
taking  back.^  But  bankruptcy  is  said  to  be  an  alienation;^  and 
if  there  were  a  voluntary  assignment  to  assignees  in  trust,  it 
should  operate  so,  as  much  as  a  direct  transfer  to  creditors.* 
There  are  reasons,  however,  for  drawing  a  distinction  between 
such  a  case,  and  one  where  the  law  takes  possession  of  property 
insured,  for  creditors  ;  at  least,  we  should  say  that,  in  such  case, 
the  insurance  mi2;ht  remain  valid  until  the  assisnees  or  commis- 
sioners  sold  the  property.^  If  several  estates  arc  insured  in  one 
policy,  and  one  or  more  are  aliened,  the  policy  is  void  as  to 
them  only.^  If  many  owners  are  insured  in  one  policy,  a  trans- 
fer by  one  or  more  to  strangers,  without  the  act  or  concurrence 
of  the  other  owners,  will  avoid  the  policy  for  only  so  much  as  is 
thus  transferred.  And  if  it  be  transferred  to  one  or  more  of  the 
insured,  it  is,  we  think,  no  alienation,  and  works  no  forfeiture^ 
But  the  authorities  are  not  in  agreement  on  this  point. 

1  Jackson  v.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  418  ;  Conover  v.  Mutual  Ins.  Co. 
3  Denio,  254;  Rollins  v.  Columbian  Ins.  Co.  .5  Foster,  (N.  H.)  200.  A  sale  by  a  mas- 
ter in  chancery  under  a  decree  of  foreclosure,  avoids  the  policy.  McLaren  v.  Hartford 
Fire  Ins.  Co.  1  Selden,  151.  But  in  Indiana,  a  mortgage  is  held  to  be  an  alienation, 
which  avoids  the  policy.  M'Culloch  v.  Indiana  Mutual  Fire  Ins.  Co.  8  Blackf.  50  ; 
Indiana  Mutual  Fire  Ins.  Co.  v.  Coquillard,  2  Carter,  645.  In  Rice  v.  Tower,  1  Gray, 
(Mass.)  426,  it  was  held,  that  a  mortgage  of  personal  property,  without  a  transfer  of 
possession  to  the  mortgagee,  is  not  such  an  alienation  of  the  property  as  will  avoid  the 
policy ;  nor  will  a  seizure  of  goods  on  execution,  without  removing  them,  have  that 
effect.  Where  the  insurance  company  insured  mortgaged  property,  and  by  a  memo- 
randum on  the  policy  agreed  to  pay  the  amount  of  insurance,  in  case  of  loss,  to  the 
mortgagee,  with  the  consent  of  the  mortgagor,  and  the  mortgage  was  afterwards  fore- 
closed, without  any  act  of  the  mortgagor,  to  whom  the  policy  was  issued,  it  was  held 
that  the  foreclosure  did  not  work  an  alienation  of  the  property  so  as  to  defeat  the 
policy.  Bragg  v.  N.  E.  Mutual  Fii-e  Ins.  Co.  5  Foster,  (N.  H.)  289.  Where  A  effected 
an  insurance  on  property,  and  afterwards  conveyed  it  to  B,  who  at  the  same  time  re- 
conveyed  it  to  a  trustee,  to  secure  A  the  payment  of  the  purchase-money,  the  policy 
was  not  avoided.  Morrison  v.  Tennessee  M.  &  F.  Ins.  Co.  18  Missouri,  262.  The  con- 
veyance of  a  moiety  of  the  premises  in  fee,  and  taking  back  a  lease  for  years  of  the 
same,  was  held  to  avoid  the  policy.  Boynton  v.  Clinton  &  Essex  Mutual  Ins.  Co.  16 
Barb.  254;  Abbot  v.  Insurance  Co.  30  Maine,  414. 

-  Tittemore  v.  Vt.  Mutual  Fire  Ins.  Co.  20  Vt.  546. 

3  In  the  charter  of  an  insurance  company,  it  was  enacted,  that  if  the  insured  should 
alienate  the  property  the  policy  should  be  void,  it  was  held  that  an  alienation  had  oc- 
curred, when  upon  his  own  application  he  had  been  decreed  a  bankrupt,  and  his 
assignee  in  bankruptcy  ajipointed.  Adams  v.  Rockingham  Mut.  Fire  Ins.  Co.  29 
Maine,  292. 

*  And  such  a  conveyance  to  a  trustee  for  the  benefit  of  creditors,  will  have  the  efl'ect 
of  an  alienation,  although  subsequently  declared  void,  on  account  of  fraud.  Dadmun 
Manufac.  Co.  v.  Worcester  Mutual  Fire  Ins.  Co.  11  Met.  429,  434. 

5  See  Bragg  v.  N.  E.  Mutual  Fire  Ins.  Co.  5  Foster,  N.  H.  298.  The  death  of  the 
assured  does  not  work  an  alienation  of  the  property  within  the  meaning  of  the  prohibi- 
tion in  the  policy.     Burbank  v.  Rockingham  Mutual  Fire  Ins.  Co.  4  Foster,  550,  558. 

6  Clark  V.  N.  E.  Mutual  Fire  Ins.  Co.  6  Cash.  342;  iEtna  Fire  Ins.  Co.  v.  Tyler,  16 
Wend.  385. 

7  Tillou  V.  Kingston  Mutual  Ins.  Co.  7  Barb.  570.     See  ante,  p.  532,  n.  1. 

45* 


534  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

Policies  of  insurance  arc  not  negotiable ;  that  is,  not  assigna- 
ble in  such  way  as  to  give  to  the  assignee  a  right  of  action  in 
his  own  name.^  But  his  moral  or  equitable  interest  will  sustain 
a  promise  by  the  insurers  to  him,  and  if  such  express  promise  be 
made,  on  this  he  may  bring  his  action.^  If  he  brings  it  in  the  name 
of  the  assignor,  it  must,  generally,  at  least,  be  subject  to  all  the 
defences  which  the  insurers  could  make  against  him.  It  is  possible 
that  there  should  be  some  qualification  of  this  rule.  Undoubtedly, 
no  insured  party  can  make  a  transfer  which  shall  operate  injuri- 
ously on  the  insurers,  and  yet  preserve  the  rights  so  transferred. 
On  the  other  hand,  if  he,  by  the  terms  of  the  policy,  may  transfer  it 
with  the  consent  of  the  insurers,  and  after  such  transfer  and  con- 
sent the  originally  insured  fraudulently  burns  the  building,  there 
would  be  strong  reasons  for  holding  the  insurance  still  valid,  in 
favor  of  the  innocent  transferree.  Perhaps  the  question  w^ould 
turn  upon  this:  did  the  transferree  pay,  or  assume  the  obligation 
of  paying,  or  guarantee  the  payment  of  any  premiums.  If  so, 
he  should  be  held  insured,  although  the  terms  of  the  policy  and 
transfer  might  oblige  him  to  bring  his  action  in  the  name  of  the 
incendiary.  Where  possible,  such  transfer,  with  such  consent, 
would,  undoubtedly,  be  regarded  as  a  new  and  independent  con- 
tract with  the  transferree.3 

An  alienation,  or  even  actual  surrender  of  the  policy,  does  not 
avoid  the  premium  note,  or  the  obligation  of  the  insured,  to  pay 
his  share  of  the  previous  losses.  If,  therefore,  after  an  alienation, 
the  insurers,  with  full  knowledge  of  it,  demand  and  receive  from 
the  insured  payments  on  such  account,  it  is  no  waiver  of  the  for- 
feiture.* From  some  cases  it  would  seem,  that  if  the  insurers 
called  for  and  received  payments  accruing  subsequently,  it  would 
not  revive  their  obligation,  on  the  ground  that  the  policy  is  com- 
pletely annulled  by  the  alienation  — that  it  cannot  be  revived  by 
any  waiver.^     But  we  should  have  much  doubt  of  this. 

1  Lynch  v.  Dalzell,  4  Brown,  P.  C.  431  ;  Carroll  v.  Boston  Marine  Ins.  Co.  8  Mas.s. 
51.5;  Smith  v.  Saratoga  Co.  Mutual  Ins.  Co.  3  Hill,  508  ;  Bodle  v.  Chenango  Co.  Mu- 
tual Ins.  Co.  2  Comst.  53;  Carpenter  v.  Providence  Washington  Ins.  Co.  16  Peters, 
502,  503 ;  Sherman  v.  Fair,  2  Speers,  647  ;  Nevins  i'.  Rockingham  Fire  Ins.  Co.  5  Fos- 
ter, 22. 

2  Eo  lins  V.  Columbian  Fire  Ins.  Co.  5  Foster,  207. 

3  Tillou  V.  Kingston  Mutual  Ins.  Co.  7  Barb.  573  ;  S.  C.  1  Seklen,  405.  Sec  Wilson 
V.  Hill,  3  Met.  69 ;  Boynton  v.  Clinton  &  Essex  Mutual  Ins.  Co.  16  Barb.  254. 

;  Smith  V.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  3  Hill,  508.  See  Wilson  v.  Trumbull 
Fire  Ins.  Co.  19  Penn.  State,  372. 

5  Neely  v.  Onondaga  Co.  Mutual  Ins.  Co.  7  Hill.  49;  Bovnton  v.  Clinton  &  Essex 
Mutual  Ins.  Co.  16  Barb.  257. 


CH.  XIX.]  ■  THE   LAW   OF   FIRE   INSURANCE.  535 

In  practice,  care  should  be  taken  to  have  all  such  transfers 
regularly  made  and  notified,  and  the  consent  obtained  fully  au- 
thorized, and  duly  indorsed  or  certified,  and  all  the  rules  or  usages 
of  the  insurers  in  this  respect  complied  with. 

Where  a  party  insured  recovered  for  a  loss  caused  by  a  rail- 
road company,  for  which  they  were  liable,  it  was  held,  that  this 
operated  as  an  equitable  assignment  to  the  insurers  of  the  claim 
of  the  insured  against  the  railroad  company ;  and  the  insurers 
might  enforce  this  by  a  suit  in  the  name  of  the  insured.' 


SECTION  X. 

OF   NOTICE   AND   PROOF. 

Where  the  policy  requires  a  certificate  of  the  loss,  the  production 
of  it  is  a  condition  precedent.^  And  it  must  be  such  a  certificate 
as  is  required;  but  a  substantial  compliance  with  its  require- 
ments is  sufficient.^  So,  too,  if  the  notice  is  to  be  given  forth- 
with^ there  must  be  no  unreasonable  or  unnecessary  delay.  And 
all  the  circumstances  of  the  case  are  considered,  in  determining 
whether  there  was  due  diligence  or  laches.^  Generally,  this  is  a 
question  for  the  jury.'^     In  fire  policies,  as  the  premises  may  be 

1  Hart  V.  "Western  R.  R.  Corporation,  13  jNIet.  99. 

•■2  Worsley  v.  Wood,  6  T.  R.  710;  S.  C.  2  Bl.  574;  Mason  v.  Harvey,  20  Eng. 
Law  &  Eq.  541 ;  S.  C.  8  Exdi.  819  ;  Columbia  Ins.  Co.  v.  Lawrence,  10  Peters,  513. 
It  will  be  no  legal  justification,  if  the  omission  to  procure  the  certificate  that  the  per- 
sons from  whom  it  was  to  be  obtained  wrongfully  refused  to  give  it.  Worsley  r.  Wood, 
supra;  Leadbetter  v.  ^tna  Ins.  Co.  13  Maine,  265.  In  determining  the  contiguity  of 
the  magistrate  to  the  place  of  the  fire,  whose  certificate  is  required,  the  place  of  his 
business  will  be  regarded,  and  a  nice  calculation  of  distances  will  not  be  made.  Tur- 
ley  r.  North  American  Fire  Ins.  Co.  25  Wend.  374. 

3  Norton  ;;.  Rensselaer  &  Saratoga  Ins.  Co.  7  Cow.  645;  N.  Y.  Bowery  Fire  Ins.  Co. 
V.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359  ;  Sexton  r.  Montgomery  Co.  Mutual  Ins.  Co.  9 
Barb.  191.  It  is  not  necessary  to  state  the  nature  of  his  interest  in  the  account  of  the 
loss.  Gilbert  i'.  North  American  Fire  Ins.  Co.  23  Wend.  43.  The  notice  may  be  oral, 
unless  required  to  be  in  writing.  Curry  r.  Commonwealth  Ins.  Co.  10  Pick.  536.  The 
manner  of  the  loss,  it  has  been  held,  need  not  be  stated.  Catlin  v.  Springfield  Ins.  Co. 
1  Sumner,  434. 

*  A  notice  of  a  loss,  which  was  required  by  the  policy  to  be  given  "  forthwith,"  thirty- 
eight  days  after  a  loss,  was  held  insufficient.  Inman  v.  Western  Fire  Ins.  Co.  12 
Wend.  452.  But  circumstances  may  justify  a  longer  delay.  Cornell  i'.  Le  Roy,  9 
Wend.  163.  Where  a  certificate  is  required  to  be  furnished  "  as  soon  as  possible,"  it  is 
sufficient  if  it  he  furnished  within  a  reasonable  time.  Columbia  Ins.  Co.  v.  Lawrence, 
10  Peters,  513,  514.  See  Wightman  v.  Western  M.  &  F.  Ins.  Co.  8  Rob.  (La.)  442; 
Kingsley  v.  N.  E.  Mutual  Fire'lns.  Co.  8  Cush.  393  ;  liovey  v.  Am.  Mutual  Ins.  Co.  2 
Duer,  (Sup.  Ct.)  554.  But  where  the  fire  took  place  in  November,  and  the  account  of 
loss  was  not  furnished  till  the  March  following,  it  was  held  not  to  be  a  compliance  with 
the  conditions.     Edwards  v.  Baltimore  Fire  Ins.  Co.  3  Gill,  176. 

5  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191. 


536  ELEMENTS    0?   MERCANTILE   LAW.  [CH.  XIX. 

supposed  always  open  to  the  inspection  of  the  agents  of  the  in- 
surers, a  general  notice  of  the  fire  will  be  probably  enough.^ 

If  the  assured  has  assigned  the  policy  with  consent,  the  as- 
signee may  give  the  notice ;.  and  if  he  does,  the  neglect  of  the 
original  insured  does  not  prejudice  the  assignee.^ 

The  insurers  may  waive  their  right  of  notice  wholly  or  par- 
tially. And  they  may  do  this  expressly,  or  by  any  acts  which 
fairly  indicate  to  the  insured  that  they  accept  an  imperfect  notice 
given  to  them,  or  that  they  do  not  need  and  do  not  require  that 
any  notice  should  be  given,^  or  that  they  have  taken  the  matter 
into  their  own  hands,  and  have  made  inquiries,  and  obtained  all 
the  information  possible.^  And  a  refusal  "to  settle  the  claim  in 
any  way,"  has  been  held  to  supply  a  good  excuse  for  not  offering 
notice.'^ 

The  preliminary  proofs,  though,  required  by  the  policy,  are 
not  admissible  as  evidence  as  to  the  damages  or  amount  of  claim. 
If  it  were  provided  in  the  policy  that  they  might  be  so  used,  this 
would  make  them  evidence,  but  we  are  not  aware  that  this  is 
ever  said  expressly ;  and  it  cannot  be  inferred  from  the  mere 
requirement  of  them.^ 

If  the  policy  provide  that  the  assured  shall,  if  required,  submit 

1  Angell  on  Fire  and  Life  Insurance,  §  238. 

2  Cornell  v.  Le  Roy,  9  Wend.  163. 

3  Where  an  account  of  the  loss  was  required  within  thirty  days,  and  when  the  insured 
furnished  one  within  the  proper  time,  made  out  under  the  advice  of  an  agent  of  the 
company,  and  subsequently  produced  his  books  for  further  explanation,  at  the  request 
of  the  company,  and  the  company  made  no  objection  to  his  account  at  that  interview, 
but  offered  to  pay  a  sum  amounting  to  about  three  fourths  of  the  loss,  a  subsequent 
objection,  in  general  terms,  was  not  allowed  to  avail  for  the  defence  to  a  suit  on  the 
policy.  Bodle  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst.  53.  So,  wherO  the  notice 
was  merely  of  a  loss,  but  was  not  objected,  and  no  request  for  further  particulars  made 
by  the  company,  it  was  held  sufficient.  Heath  v.  Franklin  Ins.  Co.  1  Cush.  257 ;  Clark  v. 
New  England  Mutual  Fire  Ins.  Co.  6  id.  342;  Underbill  v.  Agawam  Mut.  Fire  Ins.  Co. 
id.  440.  It  has  been  held,  that  a  waiver  will  not  be  implied  where  the  insurer  has  given 
the  insured  explicit  warning  that  he  shall  waive  nothing,  or  where  the  insured  could 
not  have  removed  the  objection  to  the  want  of  proof,  if  it  had  been  made.  Edwards  v. 
Baltimore  Fire  Ins.  Co.  3  Gill,  176.    See  Columbian  Ins.  Co.  v.  Lawrence,  2  Peters,  53. 

*  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191  ;  Clark  v.  N.  E.  Mutual 
Fire  Ins.  Co.  6  Cush.  342. 

5  Francis  v.  Ocean  Ins.  Co.  6  Cowen,  404 ;  Tayloe  v.  Merchants'  Fire  Ins.  Co.  9 
How.  390  ;  Allegre  v.  Maryland  Ins.  Co.  6  H.  &  J.  408.  So  where  the  refusal  is  put 
on  other  grounds,  and  not  on  the  insufficiency  of  the  notice  and  preliminary  proofs. 
Vos  V.  Robinson,  9  Johns.  192  ;  iEtna  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  401  ;  McMas- 
ters  V.  Westchester  Co.  Mutual  Ins.  Co.  25  id.  379 ;  O'Ncil  v.  Buffiilo  Fire  Ins.  Co.  3 
Comst.  122;  Clark  v.  N.  E.  Mutual  Fire  Ins.  Co.  6  Cush.  342  ;  Boynton  v.  Clinton  & 
Essex  Mutual  Ins.  Co.  10  Barb.  254.  Partial  payment  of  loss  is  equivalent  to  a 
waiver  of  the  preliminary  proofs.  Westlake  v.  St.  Lawrence  Co.  Mutual  Ins.  Co.  14 
Barb.  206. 

*^  Sexton  V.  Montgomery  Co.  Mut.  Ins.  Co.  9  Barb.  200. 


CH.  XIX.]         THE  LAW  OF  FIRE  INSURANCE.  537 

to  an  examination  under  oath,  the  insurers  are  not  bound  by 
statement  under  oath ;  but  if  he  be  duly  required,  and  therefore 
submit  himself  to  an  examination  under  oath,  he  cannot  after- 
wards be  required  to  submit  to  further  examination  under  oath  J 


SECTION  XL 

OF   ADJUSTMENT   AND   LOSS. 

Insurers  against  fire  are  not  held  to  pay  for  loss  of  profits,  gains 
of  business,  or  other  indirect  and  remote  consequences  of  a  loss 
by  fire.  We  do  not  know,  however,  why  profits  may  not  be 
specifically  insured  against  fire,  where  it  is  not  forbidden  by,  or 
inconsistent  with,  the  charter  of  the  insurers.^ 

There  is  one  wide  difference  between  the  principle  of  adjust- 
ment of  a  marine  policy  and  of  a  fire  policy.  In  the  former,  if  a 
proportion  only  of  the  value  is  insured,  the  insured  is  considered 
as  his  own  insurer  for  the  residue,  and  only  an  equal  proportion 
of  the  loss  is  paid.  Thus,  if  on  a  ship  valued  at  $10,000,  $5,000 
be  insured,  there  is  a  loss  of  one  half,  the  insurers  pay  only 
one  half  of  the  sum  they  insure,  just  as  if  some  other  party  had 
insured  other   $5,000.     But  in  a  fire  policy,  the  insurers  pay  in 

1  Moove  V.  Protection  Ins.  Co.  29  Maine,  97. 

2  Under  an  insurance  by  the  plaintiff,  of  his  "interest  in  the  Ship  Inn  and  offices,"  it 
was  held  that  he  could  not  recover  for  the  loss  of  liis  business  as  an  inn-keeper  in  the 
interval  between  the  fire  and  the  rebuilding.  In  re  Wright  &  Sun  Fire  Ins.  Co.  3  N.  & 
M.  819  ;  S.  C.  1  Ad.  &  El.  621.  Taunton,  J.:  "I  think  that  profits  are  insurable,  but  they 
must  be  insured  qua  profits.  A  party  is  not  entitled  to  compensation  for  loss  of  profits 
under  an  insurance  of  his  'interest  in  the  Ship  Inn.'"  A  tenant,  from  year  to  year, 
insured  premises  used  for  an  armory,  a  theatre,  and  other  purposes  of  amusement. 
The  armory  was  partially,  and  all  the  other  buildings  were  destroyed  by  fire.  In  a 
suit  on  the  policy,  the  assured  offered  in  proof  that,  by  reason  of  engagements  actually 
existing  at  the  time  of  the  fire  with  an  opera  company;  with  the  Ravels,  conducting  a 
series  of  amusements;  with  the  American  Institute  for  an  exhibition  ;  with  a  military 
company,  hiring  the  armory ;  and  other  persons  hiring  other  parts  of  the  premises,  he 
had  sustained  by  the  defeating  of  these  engagements,  to  the  extent  of  the  sums  insured, 
and  not  exceeding  the  estimated  or  actual  cost  of  the  premises  destroyed  ;  it  was  held 
that  there  could  be  no  allowance  to  the  insured  for  the  loss  of  his  business  and  these 
interrupted  gains  ;  and  that  one  mode  of  putting  the  inquiry  to  the  jury,  would  bo 
this:  "How  much  would  a  stranger,  having  no  contracts  or  engagements  pending,  such 
as  the  plaintiffs  offered  to  prove,  have  given  for  the  unexpired  lease  when  the  fire 
occurred?"  Where,  by  the  terms  of  a  policy  on  goods  in  public  stores,  the  under- 
writers agree  to  make  good  to  the,  assured  all  such  loss  as  should  happen  to  the  goods 
by  fire,  "to  be  estimated  according  to  the  true  and  actual  cash  value  of  the  property  at 
the  time  the  loss  should  happen,"  the  measure  of  damages  is  such  value,  notwithstand- 
ing the  duties  have  not  been  paid  or  secured.  Wolfe  v.  Howard  Ins.  Co.  3  Selden, 
583;  S.  C.  1  Sandf.  124.  Actual  anci  not  consequential  damages  are  recoverable. 
Ellmaker  v.  Franklin  Fire  lus.  Co.  5  Barr.  183. 


538  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIX. 

all  cases  the  whole  amount  which  is  lost  by  the  fire,  provided 
only  that  it  does  not  exceed  the  amount  which  they  insure.' 

It  is  said  that  general  average  clauses  or  provisions  are  in- 
serted in  fire  policies  in  England,  but  are  not  known,  here. 
Still,  in  one  case,  the  principle  of  general  average  was  applied. 
Blankets  were  used  by  the  assured,  with  the  consent  of  the  in- 
surers, to  protect  a  building  from  a  near  fire;  they  did  this  effec- 
tually, but  were  themselves  made  worthless,  and  an  action  of  the 
insured  against  the  insurers,  for  this  loss,  was  sustained  by  the 
court.2 

As  a  contract  of  fire  insurance  is  an  entire  one,  if  the  policy 
ever  attaches,  there  should  be  no  return  of  premium,  although 
the  property  be  destroyed  the  day  after,  and  not  by  fire ;  as  by 
demolition  by  whirlwind,  or  other  similar  accident.^  If,  however, 
there  were  an  insurance  on  goods  believed  to  be  at  a  certain 
place,  at  a  certain  time,  and  none  of  them  were  there,  there 
might  be  an  entire  return  of  premium,  because  there  was  never 
any  insurance.'^  But  if  a  part  were  there,  there  should  be  no 
partial  return  ;  because,  the  rule  that  where  a  part  only  is  insured, 
only  a  proportionate  part  is  paid  by  the  insurers  in  case  of  loss, 
applies  only  to  marine  policies,  as  stated  above. 

Most  of  the  fire  policies  used  in  this  country,  give  the  insurers 
the  right  of  rebuilding  or  repairing  premises  destroyed  or  injured 
by  fire,  instead  of  paying  the  amount  of  the  loss.  If  under  this 
power,  the  insurers  rebuild  the  house  insured,  at  a  less  cost  than 
the  amount  they  insure,  this  does  not  exhaust  their  liability; 
they  are  now  insurers  of  the  new  building  for  the  diflference 
between  its  cost  and  the  amount  they  have  insured.  And  if  the 
new  building  burns  down,  or  is  injured  while  the  policy  contin- 

1  Liscom  V.  Boston  Mutual  Fire  Ins.  Co.  9  Met.  21 1 ;  Trull  v.  Eoxbury  Mutual  Fire 
Ins.  Co.  3  Cush.  267. 

'^  But  the  owners  of  other  buildings  in  the  neighborhood,  who  may  have  been  pro- 
tected by  the  use  of  the  bhxnkets,  are  too  remotely  interested  to  be  liable  to  contribu- 
tion.    Welles  V.  Boston  Ins.  Co.  6  Picl^.  182. 

^  Ellis  on  Insurance,  23. 

*  Where  the  representation  was  made  that  no  lamps  were  used  in  the  picking-room 
of  the  manufactory  insured,  and  lamps  had  been  suspended  and  occasionally  used  there 
for  several  years,  it  was  held  that  the  policy  never  attached,  and  there  being  no  fi-aud 
in  the  representation,  the  return  of  the  premium  was  ordered.  Clark  v.  Manufacturers' 
Ins.  Co.  2  Wood  &  Minot,  472,  494.  It  is  held  that  they  have  not  this  right  unless  it 
is  expressly  given.  Wallace  v.  Insurance  Co.  4  Louis.  289.  Where  the  insurance  is 
on  personal  property,  the  same  right  is  given.  Franklin  Fire  Ins.  Co.  v.  Ilamill,  5 
Maryland,  170. 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  539 

ues,  the  insured  may  claim  so  much  as,  added  to  the  cost  already- 
incurred,  shall  equal  the  sum  for  which  he  was  insured.^ 

There  is  no  rule  in  fire  insurance  similar  to  that  which  makes 
a  deduction,  in  marine  insurance,  of  one  third,  new  for  old.  Still, 
the  jury,  to  whom  the  whole  question  of  damages  is  given,  are 
to  inquire  into  the  greater  value  of  a  proposed  new  building,  or 
of  a  repaired  building,  and  assess  only  such  damages  as  shall 
give  the  insured  complete  indemnity.^ 

Where  insurers  had  reserved  a  right  to  replace  articles  de- 
stroyed, and  the  insured  refused  to  permit  them  to  examine  and 
inventory  the  goods,  that  they  might  judge  what  it  was  expedient 
for  them  to  do.  Chancellor  Walworth  refused  to  aid  the  insurers 
in  equity ;  but  such  conduct,  on  the  part  of  the  insured,  would  be 
evidence  to  the  jury  of  great  weight,  to  prove  an  overstatement 
of  loss.^ 

If  after  the  adjustment  and  payment,  there  appears  to  have 
been  fraud  in  the  original  contract,  or  in  the  adjustment,  or 
rtjaterial  mistake  of  fact,  (but  not  so  if  the  mistake  be  of  law.)  it 
would  seem  that  money  paid  may  be  recovered  back.^ 

If  the  policy  contains  a  provison  that  any  fraud  in  the  claim, 
or  any  false  swearing  or  affirmation  in  support  of  it,  shall  avoid 
the  policy,  (as  is  frequently  the  case  in  England,)  it  would  seem 
that  it  would  be  left  to  the  jury  to  say  whether  there  was  any 
material  and  substantial  fraud  connected  with  the  matter,  and  if 
so,  to  find  for  the  defence.^ 

From  the  present  state  of  the  authorities,  it  may  be  stated,  as 
a  general  rule,  that  there  are  no  equities  upon  the  proceeds  of 
policies  of  fire  insurance,  in  favor  of  any  third  parties,  unless 
there  be  a  bargain  or  contract,  or  a  trust,  to  that  efi'ect.^ 

1  Trull  V.  TJoxbnvy  Mutual  Fire  Ins.  Co.  3  Cush.  263.  See  N.  H.  Mutual  Ins.  Co. 
v-  Eand,  4  Foster,  N.  H.  428.  Tlie  insured  will  also  be  liable  for  assessments  for  losses 
after  the  destruction  of  his  building  by  fire,  during  the  whole  term  of  the  policy.  N.  II. 
Mutual  Fire  Ins.  Co.  v.  Eand,  4  Foster,  N.  H.  428  ;  S wamscot  Machine  Co.  v.  Partridge, 
5  id.  369. 

^  Brinlev  v.  National  Ins.  Co.  11  Met.  195. 

3  N.  Y.  Fire  Ins.  Co.  v.  Delavan,  8  Paige,  419. 

*  Bilbie  V.  Luniley,  2  East,  469  ;  Herbert  v.  Champion,  1  Camp.  134. 

5  Woods  V.  Masterman,  Ellis  on  Insurance,  14  ;  Levy  v.  Baillie,  7  Bing.  349. 

*>  A  tenant  has  no  equity  to  compel  his  landlord  to  expend  money  received  from  an 
insurance  office  on  the  demised  premises  being  burnt  down,  for  rebuilding  then),  or  to 
restrain  the  landlord  from  suing  f^  the  rent  until  the  premises  are  rebuilt.  Leeds  v. 
Cheetham,  1  Sims.  146.     See  Brown  v.  Quilter,  Ambler,  619. 


540  ELEMENTS    OF   MERCANTILE  LAW.  [CH.  XX. 


CHAPTER  XX. 
LIFE    INSURANCE. 

SECTION   I. 

OF   THE   PURPOSE   AND    METHOD    OF    LIFE    INSURANCE. 

If  a  insures  B  a  certain  sum  payable  at  B's  death  to  B's  rep- 
resentatives, we  have  only  the  insurer  and  insured  as  in  other 
cases.  But  if  A  insures  B,  a  sum  payable  to  B  or  his  represen- 
tatives, on  the  death  of  C,  although  C  is  often  said  to  be  insured, 
this  is  not  quite  accurate;  more  properly  B  is  the  insured  party 
and  C  is  the  life-insured. 

Life  insurance  is  usually  effected  in  this  country  in  away  quite 
similar  to  that  of  fire  insurance  by  our  mutual  companies.  That 
is,  an  application  must  be  first  made  by  the  insured;  and  to  this 
application  queries  are  annexed  by  the  insurers,  which  relate,  with 
great  minuteness  and  detail,  to  every  topic  which  can  affect  the 
probability  of  life.  These  must  be  answered  fully ;  and  if  the 
insured  be  other  than  the  life-insured,  there  are  usually  questions 
for  each  of  them.  There  are  also,  in  some  cases,  questions  which 
should  be  answered  by  the  physician  of  the  life-insured,  and , 
others  by  his  friends  or  relatives;  or  other  means  are  provided 
to  have  the  evidence  of  the  physician  and  friends. 

These  questions  are  not,  perhaps,  precisely  the  same,  in  the 
forms  given  out  by  any  two  companies;  and  we  do  not  speak  of 
them  in  detail  here.  The  rules,  as  to  the  obligation  of  answer- 
ing them,  and  as  to  the  sufficiency  of  the  answers,  must  be  the 
same  in  life  insurance  as  in  fire  or  marine  insurance  ;  or  rather 
must  rest  upon  the  same  principles.  And  the  same  rules  and 
principles  of  construction,  would  doubtless  be  applied  to  the 
question  whether  a  contract  had  been  made,  or  at  what  time  it 
went  into  effect.' 

'  The  case  of  the  Kentucky  Mat.  Ins.  Co.  i'.  Jcnks,  5  Porter,  96  (Indiann,)  is  of  much 
interest  on  this  subject.     On  the  27th  of  September,  1850,  Jenks,  of  Lafayette  Co. 


CH.  XX.]  LIFE   INSURANCE.  541 


SECTION   II. 

OF     THE     PKEMTUM. 

If  the  insurance  be  for  one  year  only,  or  less,  the  premium  is 
usually  paid  in  money  or  by  a  note  at  once.  If  for  more  than  a 
year,  it  is  usually  payable  anrmally.  But  it  is  common  to  pro- 
vide or  agree  that  the  annual  payment  may  be  made  quarterly, 
with  interest  from  the  day  when  the  whole  is  due.^  Notes  are 
usually  given  ;  but  if  not,  the  whole  amount  would  be  considered 
due.  If  A,  whose  premium  of  $100  is  payable  for  1856,  on  the 
1st  day  of  January,  then  pays  $25,  and  is  to  pay  the  rest  quar- 
terly, dies  on  the  first  of  February,  the   $75  due,  with  interest 

being  then  in  good  health,  completed  an  application  to  the  Kentucky  Insurance  Com- 
pany for  an  insurance  of  SI. 500  on  his  life,  for  the  benefit  of  his  wife.  The  company's 
agent  at  Lafayette  on  that  day  mailed  the  application  to  the  company.  The  application 
was  duly  approved,  and  a  policy  was  issued  thereon  and  mailed  to  the  agent  on  the 
2d  October,  is.'iO.  It  insured  the  life  of  J.  in  the  sum  of  1,500  dollars,  for  five  years 
from  date,  for  the  benefit  of  his  wife.  The  policy  was  received  by  the  agent  on  the  5th 
of  October,  1850.  On  the  29th  September,  1850,  J.  was  taken  sick,  and  lingering  until 
the  4th  October  following,  died.  On  the  receipt  of  the  policy,  (J.  being  dead,)  the 
agent  immediately  returned  it  by  mail  to  the  comjjany.  While  the  treaty  for  insurance 
was  pending,  and  before  J.'s  application  was  completed,  the  company  agreed  to  take  the 
first  year's  premium  in  an  advertisement  of  their  agency,  for  six  months,  in  J.'s  news- 
paper at  Lafayette;  and  accordingly  the  agent  in  August,  1850,  furnished  to  J.  the  ad- 
vertisement, which  was  published  in  the  paper  continuously  thereafter,  as  directed  by. 
the  agent,  for  six  months.  The  price  of  the  advertisement  fell  short  of  the  first  year's 
premium  45  cents.  This  was  a  bill  in  chancer}-  by  J.'s  widow,  praying  discovery  of  the 
entries  upon  the  company's  books,  «&c.,  and  that  the  original  application  for  the  insur- 
ance, and  the  original  policy  issued  thereon,  should  be  produced,  &c. ;  that  an  account 
should  be  taken,  &c. ;  and  for  general  relief.  And  it  was  held  that  the  contract  of 
insurance  was,  at  least,  complete  on  the  2d  of  October,  1850,  when  J.'s  application  was 
approved  and  the  policy  was  mailed  to  him  ;  and  that  there  was  weighty  authority  that 
the  acceptance  related  back  to  the  period  when  J.  completed  his  application. 

'  In  Buckee  v.  The  United  States  Insurance  Annuity  and  Trust  Company,  1 8  Barbour, 
541,  a  policy  of  life  insurance  contained  a  provision  that  in  case  the  quartcrl}'  premiums 
should  not  be  paid  on  the  daj^s  specified,  the  policy  should  be  void  ;  but  that  in  such 
case  it  might  be  renewed,  at  any  time,  on  the  jjroduction  of  satisfa^'tory  evidence  as  to 
the  health  of  the  insured,  and  payment  of  back  premiums,  &c.  The  premium  due  on 
the  10th  December,  1851,  was  not  paid  until  the  16tli,  when  it  was  received  by  the 
insurers,  without  objection,  and  entered  to  the  credit  of  the  policy,  and  a  receipt  given 
for  it.  No  evidence  was  produced  in  respect  to  the  health  of  the  insured,  and  none  was 
required.  The  insured  was,  in  fact,  sick  at  the  time,  and  died  on  the  19th  January, 
1852,  of  the  disease  under  which  he  was  then  laboring.  It  appeared  that  it  had  not 
been  the  practice  of  the  insurers  to  exact  prompt  payment  of  the  premiums,  when  due, 
but  they  had  allowed  the  same  to  lie  over  several  days,  and  then  accepted  them,  with- 
out objection.  Held,  that  the  conduct  of  the  insurers  had  been  such  as  to  amount  to  a 
waiver  of  a  literal  compliance  with  the  condition  as  to  punctual  payment ;  and  that  the 
policy  not  having  lapsed  or  become  void,  did  not  require  renewal  upon  a  disclosure  of 
the  state  of  the  insured's  health,  within  the  meaning  of  that  condition.  Held  also,  that  such 
waiver  restored  the  policy  to  the  same  condition  in  which  it  would  have  been,  had  the 
premium  been  paid  on  the  precise  day  when  it  fell  due. 

46 


542  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XX. 

from  the    1st   of   January,  would  be    deducted  from   the  sum 
insured. 

Provision  is  sometimes  made  that  a  part  of  the  premium  shall 
be  paid  in  money,  an9  a  part  in  notes,  which  are  not  called  in 
unless  needed  to  pay  losses.'  The  greater  the  accommodation  thus 
allowed,  the  more  convenient  it  is,  obviously,  to  the  insured,  and 
the  less  certain. can  he  be  of  the  ultimate  payment  of  the  policy, 
because,  in  the  same  degree,  the  fund  for  the  payment  consists 
only  of  such  notes,  and  not  of  payments  actually  made  and  in- 
vested. There  is  a  great  diversity  among  the  life  insurance  com- 
panies in  this  respect.  But  even  the  strictest,  or  those  which 
require  that  all  the  premiums  shall  be  paid  in  money,  usually 
provide  also  that  an  amount  may  remain  overdue  without  prej- 
udice which  does  not  exceed  a  certain  proportion  —  say  one  half 
or  one  third  —  of  the  money  actually  paid  in  on  the  policy.  This 
is  considered,  under  all  ordinary,  circumstances,  safe  for  the  com- 
pany, because  every  policy  is  worth  as  much  as  this  to  the  com- 
pany. Or,  in  other  words,  it  would  always  be  profitable  for  the 
company  to  obtain  a  discharge  of  its  obligation  on  a  policy  by 
repaying  the  insured  a  small  proportion  of  what  has  been  received 
from  him. 


SECTION  III. 

OF    THE   RESTRICTIONS   AND   EXCEPTIONS   IN   LIFE   POLICIES. 

Our  policies  usually  contain  certain  restrictions  or  limitations 
as  to  place ;  the  life-insured  not  being  permitted  to  go  beyond 
certain  limits,  or  to  certain  places.^     But  there  is  nothing  to  pre- 

1  Insurance  Co.  w.  Jarvis,  22  Conn.  133. 

2  In  Wing  V.  Harvey,  27  Eng.  Law  &  Eq.  140,  Bennett,  at  the  instance  of  his  cred- 
itor, having  procured  insurances  on  the  life  of  his  debtor,  and  one  of  the  conditions  of 
the  policies  was  that,  "  if  the  party,  upon  whose  life  the  insurance  is  granted,  shall  go 
beyond  the  limits  of  Europe  without  the  license  of  the  directors,  this  policy  shall  be- 
come void,  the  insurance  intended  to  be  hereby  effected  shall  cease,  and  the  money  paid 
to  the  society  become  forfeited  to  its -use."  These  policies  were  duly  assigned  to  Ben- 
nett, and  notice  given  to  Lockwood,  the  general  agent  of  the  companj^  at  Bury  St.  Ed- 
munds, through  whom  the  policies  had  been  eifected.  After  the  assignments,  the  pre- 
miums were  regularly  paid  by  Wing,  or  his  brother  in  his  behalf.  In  June,  1835,  five 
years  after  the  effecting  of  the  last  policy,  Bennett  infringed  on  the  condition  of  the 
policies,  by  going  to  live  in  Canada,  where  he  resided  till  his  death  in  1849.  Lock- 
wood,  applying  to  Wing  for  the  premiums  afterwards,  was  informed  of  Bennett's  de- 
parture, and  being  inquired  of  whether  it  would  be  safe  to  pay  the  premiums  under  the 
circumstances,  replied  that  the  policies  would  be  perfectly  good  provided  the  premiums 
were  regularly  paid,  and  Wing  thereupon  paid  them  to  Lockwood,  who  transmitted 


CH.  XX.]  LIFE   INSURANCE.  543 

vent  a  bargain  permitting  the  life-insured  to  pass  beyond  these 
bounds,  either  in  consideration  of  new  and  farther  payments,  or 
of  the  common  premium. 

So  certain  trades  or  occupations,  as  of  persons  engaged  in 
making  gunpowder,  or  as  engineers  or  firemen  about  steam  en- 
gines, are  considered  extra-hazardous,  and  as  therefore  prohibited, 
or  requiring  an  extra  premium. 

The  exception,  however,  which  has  created  most  discussion,  is 
that  which  makes  death  by  suicide  an  avoidance  of  the  policy. 
The  clause  respecting  duelling  is  plain  enough  ;  and  no  one  can 
die  in  a  duel  without  his  own  fault.  But  it  is  otherwise  with 
regard  to  self-inflicted  death.  This  may  be  voluntary  and  wrong 
ful,  or  the  result  of  insanity  and  disease  for  which  the  suffering 
party  should  not  be  held  responsible.  If  a  policy  is  accepted, 
which  expressly  declares  that  the  sum  insured  shall  not  be  pay- 
able if  the  life-insured  die  by  his  own  hands,  whether  wilfully, 
knowingly,  or  intentionally,  or  otherwise,  there  is  no  doubt  that 
this  clause  would  have  its  full  and  literal  effect.  But  it  might  then 
be  very  difficult  to  limit  its  application.  If,  for  example,  a  nurse 
gave  a  sick  man  a  fatal  dose  by  mistake,  and  he  took  the  glass 
in  his  hand,  put  it  to  his  lips,  drank  and  died,  it  might  fall 
within  the  language  of  such  a  provision,  but  could  hardly  come 
within  any  principle  that  would  be  recognized.     Most  persons 

them  to  the  head  office  of  the  society.  To  the  successor  of  Lockwood,  who  died 
in  1847,  the  same  inquiries  were  put,  the  same  reply  was  received,  and  the  premiums 
received  and  transmitted  in  the  same  manner.  There  was  some  evidence  which  tend- 
ed to  show  that  the  officers  of  the  company  had  incidentally  become  informed  of  Ben-' 
nett's  residence  in  Canada.  It  was  held  that  whether  the  office  had  express  notice  of 
the  forfeiture  or  not,  it  was  waived  by  the  act  of  the  agents  in  receiving  the  premiums 
paid  to  them  in  faith  of  the  policies  continuing  valid  and  effectual  notwithstanding 
the  departure,  and  transmitting  them  to  the  directors,  who  retained  them  without  objec- 
tion. Knight  Bruce,  L.  J.,  said:  "  If  the  directors  represented  by  the  defendant  had 
themselves  personally  received  the  premiums  which  Mr.  Lockwood  and  Mr.  Thompson 
received,  with  the  same  knowledge  they  had,  that  would  certainly  have  been  a  waiver 
of  the  forfeiture,  and  the  defence  would  have  been  ineffectual ;  but  they  were  their  agents 
for  the  purpose  of  receiving  the  premiums  upon  subsisting  policies  —  premiums  paid 
to  them  upon  the  faith  of  the  policies  continuing  valid  and  effectual,  notwithstanding 
the  departure  and  residence  at  Canada  of  the  person  whose  life  was  insured,  —  a  faith 
in  which  Lockwood,  and  afterwards  Thompson  knowingly  acquiesced,  and  expressly 
sanctioned.  Those  premiums  having  been,  from  time  to  time,  transmitted  to  the  direc- 
tors, and  retained  by  them  without  objection,  I  think,  whether  Lockwood  or  Thompson 
informed,  or  did  not  inform  them  in  fact,  of  the  true  state  of  the  circumstances  in 
which  the  premiums  were  paid  to  them,  the  directors  became  and  are,  as  between 
themselves  aild  plaintiffs,  as  much  bound  as  if  those  premiums  had  been  paid  by  the 
plaintiff  directly  to  themselves,  they  knowing  at  the  time,  on  each  occasion,  the  place 
of  Bennett's  residence.  The  directors  taking  the  money,  were  or  are  precluded  from 
saying  they  received  it  otherwise  than  for  the  purpose  and  on  the  faith  for  which  and 
on  which  Mr.  Wing  expressly  paid  it." 


544  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XX. 

die  by  their  own  act,  in  this  sense  ;  because  most  owe  their  death 
to  some  act  or  acts  of  indiscretion  or  exposure.  The  insurers 
may  provide  against  any  kind  of  death,  as  they  may  against 
death  by  a  certain  disease,  or  by  a  certain  cause  or  in  a  certain 
place.  The  difficult  question  is,  what  is  the  construction  and 
operation  of  law,  where  the  clause  is  only  "  death  by  his  own 
hands,". or  some  equivalent  phrase. 

Although  strong  authorities  favor  that  construction  of  any 
clause  of  this  kind,  which  would  avoid  the  policy  if  death  were 
actually  self-inflicted,  although  in  a  state  of  insanity,  5the  op- 
posite view  is  also  well  sustained.  And  we  are  of  opinion  that 
the  general  principles  of  the  law  of  contracts,  and  of  the  law  of 
insurance  particularly,  would  lead  to  the  conclusion  that  "death 
by  his  own  hands,"  but  without  the  concurrence  of  a  responsible 
will  or  mind,  would  not  discharge  the  insurers,  without  a  positive 
provision  to  that  effect.  We  should  put  such  a  death  on  the 
same  footing  with  one  resulting  from  a  mere  accident,  brought 
about  by  the  agency  but  without  the  intent  of  the  life-insured. 
As  if,  in  a  case  like  that  above-supposed,  poison  were  sent  to 
him  by  mistake  for  medicine,  and  he  swallowed  it  under  the 
same  mistake. ^ 

1  In  Borradaile  v.  Hunter,  5  Man.  &  Grang.  639,  the  policy  contained  a  proviso,  that 
in  case  "  the  assured  should  die  by  his  own  hands,  or  by  the  hands  of  justice,  or  in  con- 
sequence of  a  duel,"  the  policy  should  be  void.  The  assured  threw  himself  from  Vaux- 
hall  Bridge  into  the  Thames,  and  was  drowned.  In  a  suit  on  the  policy,  Erskine,  J., 
instructed  the  jury  that  if  the  assured,  by  his  own  act,  intentionally  destroyed  his  own 
life,  and  that  he  w^as  not  only  conscious  of  the  probable  consequences  of  the  act,  but 
did  it  for  the  express  purpose  of  destroying  himself  voluntarily,  having  at  the  time  suf- 
ficient mind  to  will  to  destroy  liis  own  life,  the  case  would  be  brought  within  the  condi- 
tion of  the  policy.  But  if  he  was  not  in  a  state  of  mind  to  know  the  consequences  of 
the  act,  then  it  would  not  come  within  the  condition."  The  jury  found  t!iat  the  assured 
"threw  himself  from  the  bridge  with  the  intention  of  destroying  his  life;  but  at  the 
time  of  committing  the  act  he  was  not  capable  of  judging  between  right  and  wrong." 
It  was  held,  (Tindal,  J.,  dissenting,)  that  the  policy  was  avoided,  as  the  proviso  includ- 
ed all  acts  of  intentional  self-destruction,  and  was  not  limited  by  the  accompanying 
provisos  to  acts  of  felonious  suicide.  Erskine,  J.,  said  :  "  Looking  simply  at  that 
brancli  of  the  proviso  upon  which  the  issue  was  raised,  it  seems  to  me  that  the  only  qual- 
ification that  a  liberal  interpretation  of  the  words  with  reference  to  the  nature  of  the 
contract,  requires,  is,  that  the  act  of  self-destruction  should  be  the  voluntary  and  wilful 
act  of  a  man,  having  at  the  time  sufficient  powers  of  mind  and  reason  to  understand  the 
physical  nature  and  consequences  of  such  act,  and  having  at  the  time  a  purpose  and  in- 
tention to  cause  his  own  death  bj-^that  act;  and  that  the  question  whether  at  the  time  he 
was  capable  of  understanding  and  appreciating  the  moral  nature  and  quality  of  his  pur- 
pose, is  not  relevant  to  the  inquiry,  further  than  as  it  might  help  to  illustrate  the  extent 
of  his  capacity  to  understand  the  physical  character  of  the  act  itself.  It  appears,  indeed, 
to  me,  tliat,  excluding  for  the  prese'nt  the  consideration  of  the  immediate  context  of  the 
words  in  question,  the  fair  inference  to  he  drawn  from  the  nature  of  the  contract  would' 
be,  that  the  parties  intended  to  include  all  wilful  acts  of  self-destruction  whatever  might 
be  the  moral  responsibility  of  the  assured  at  the  time  ;  for,  although  the  probable  results 


CH.  XX.]  LIFE   INSURANCE.  645 

It  was  once  made  a  question  upon  which  high  authorities  dif- 
fered, whether  death  by  the  hands  of  justice  discharged  the  insur- 
ers when  the  policy  made  no  express  provision  for  this.  Perhaps 
the  weight  of  authority  is  in  the  affirmative.^     But  the  question 

of  bodily  disease  producing  death  by  physical  means  may  be  the  fair  subjects  of  calcu- 
lation, the  consequences  of  mental  disorder  whether  produced  by  bodily  disease,  by 
external  circumstances,  or  by  corrupted  principle,  are  equally  beyond  the  reacii  of  any 
reasonable  estimate.  And  reasons  might  be  suggested  wliy  those  who  have  the  direction 
of  insurance  offices  should  not  choose  to  undertake  the  risk  of  such  consequences,  even 
in  cases  of  clear  and  undoubted  insanity.  It  is  well  known  that  the  conduct  of  insane 
patients  is,  in  some  degree,  under  the  control  of  their  hopes  and  fears,  and  that  especially 
their  affection  for  others  often  exercises  a  sway  over  their  minds  where  fear  of  death  or 
of  personal  suffering  might  have  no  influence  ;  and  insurers  might  well  desire  not  to 
part  with  this  restraint  upon  the  mind  and  conduct  of  the  assured,  nor  to  release  from 
all  pecuniary  interest  in  the  continuance  of  the  life  of  the  assured,  those  on  whose 
watchfulness  its  preservation  might  depend ;  and  they  might,  further,  most  reasonably 
desire  to  exclude  from  all  questions  between  themselves  and  the  representatives  of  the 
assured,  the  topic  of  criminality  so  likely  to  excite  the  compassionate  prejudices  of  a 
jury,  which  were  most  powerfully  appealed  to  on  the  trial  of  this  cause."  Tindal,  C.  J., 
held  that  the  terms  "  dying  by  his  own  hands,"  being  associated  with  the  terms  "  dying 
by  the  hands  of  justice  or  in  consequence  of  a  duel,"  which  last  cases  designated  crimi- 
nal acts,  on  the  principle  of  noscitura  sociis  should  be  interpreted  as  meaning  felonious 
self-destruction.  It  will  be  observed  the  majority  of  the  court  in  the  above  case  exclude 
from  the  condition  cases  of  mere  accident,  and  of  insanity  extending  to  unconsciousness 
of  the  act  done  or  of  its  physical  consequences.  In  Clift  v.  Schwabe,  3  M.  G.  &  S. 
(C.  B.)  437,  which  was  determined  in  the  Exchequer  Chamber,  in  1846,  where 
the  condition  was  that  the  policy  should  be  void  if  the  life-insured  "should  commit 
suicide,"  it  was  held  by  a  majority  of  the  court,  (Rolfe,  B.,  Patteson,  J.,  Alderson,  B., 
Parke,  B.,)  that  the  terms  of  the  condition  included  all  acts  of  voluntary  self-destruction, 
and  therefore  if  the  life-assured  voluntarily  killed  himself,  it  was  immaterial  whether 
he  was  or  was  not  at  the  time  a  responsible  moral  agent.  Pollock,  C  B.,  and  Wight- 
man,  J.,  dissented.  On  the  other  hand,  in  New  York,  in  a  case  decided  before  the  above 
cases,  it  was  held  that  a  provision  in  a  life  policy  that  it  is  to  be  deemed  void  in  case  the 
assured  shall  "  die  by  his  own  hand,"  imports  a  criminal  act  of  self-destruction,  and  the 
underwriters  were  liable  where  the  assured  drowned  himself  in  a  fit  of  insanity. 
Breasted  v.  The  Farmers'  Loan  and  Trust  Company,  4  Hill,  73.  The  decision  of  the 
Supreme  Court  was  affirmed  in  the  Court  of  Appeals,  but  not  with  unanimity.  Five 
judges  voting  for  an  affirmance,  and  three  for  a  reversal.  The  opinion  of  the  majority, 
delivered  by  Willard,  J.,  and  the  dissenting  opinion  of  Gardiner,  J,,  present  the  argu- 
ments on  their  respective  sides,  the  latter  sustaining  the  decisions  of  the  English 
courts.  4  Selden,  299.  Where  a  condition  of  the  policy  was,  that  it  shall  be  void  if  the 
party  "  shall  die  by  his  own  hand  in  or  in  consequence  of  a  duel,"  it  was  held  to 
include  the  case  of  suicide  by  swallowing  arsenic,  and  that  the  first  part  of  the  clause  is 
to  be  separated  from  the  latter,  as  the  whole  taken  together  would  lead  to  an  absurdity. 
Hartman  v.  Keystone  Insurance  Co.  21  Penn.  State,  466. 

1  The  Amica'ble  Society  v.  BoUand,  4  Bligh.  N.  S.  194.  In  the  court  below,  Bollande 
V.  Disney,  3  Russell,  Ch.  351.  In  this  —  Fauntleroy's  case  —  there  was  no  clause  in 
the  policy  in  regard  to  death  by  the  hands  of  justice,  but  the  life-assured  was  convicted 
of  forgery,  sentenced,  and  executed.  The  policy  was  sustained  at  the  Rolls,  but  upon 
appeal  to  the  House  of  Lords,  the  decree  was  reversed.  Lyndhurst,  Lord  Chancellor, 
held  that  a  policy  expressly  insuring  against  such  a  risk,  would  be  void  on  the  plainest 
principles  of  public  policy,  as  taking  away  one  of  the  restraints  operating  on  the 
minds  of  men  against  the  commission  of  crime  — namely,  the  interest  we  have  in  the 
welfare  and  prosperity  of  our  connections  —  and  effect  could  not  be  given  to  it  on  an 
event  which,  if  expressed  in  terms,  would  have  rendered  the  policy,  as  far  as  that  con- 
dition went  at  least,  altogether  void.  Where  a  policy  provided  that  it  should  be  void, 
if  the  life-assured  "  should  die  in  the  known  violation  of  a  law  of  the  State,"  it  was 
held  that  to  avoid  it,  the  killing  of  the  life-assured,  in  an  altercation,  must  have  been 
justifiable  or  excusable  homicide,  and  not  merely  under  circumstances  which  would 

46* 


546  ELEMENTS   OF  MERCANTILE   LAW.  [CH.    XX. 

has  now  but  little  practical  importance,  as  our  policies  always 
express  this  exception. 

Although  a  policy  express  that  it  shall  not  take  effect  until  the 
premium  is  paid,  this  payment  may  be  waived  by  the  company. 
Taking  a  note  would  certainly  be  a  waiver,  if  not  a  payment. 
The  premiums,  after  the  first,  must  be  paid  on  the  days  on  which 
Ihey  fall  due.  If  no  hour  be  mentioned,  then  it  is  believed  that 
the  insurer  would  have  the  whole  day,  even  to  midnight.  It  is 
possible,  however,  that  he  might  be  restricted  to  the  usual  hours 
of  business,  and  perhaps  even  to  those  in  which  the  office  of  the 
insurers  is  open  for  business.  In  some  policies  a  certain  number 
of  days  is  allowed  for  the  payment  of  the  premium.  Then,  if 
the  loss  happen  after  the  premium  is  due  and  unpaid,  and  dur- 
ing this  number  of  days  and  before  they  have  expired,  but  after, 
the  loss  the  premium  is  paid,  the  insurers  should  be  bound  by 
a  subsequent  payment  of  the  premium,  by  the  insured  or  his  rep- 
resentatives, within  the  designated  period.^  Where  this  time  had 
elapsed,  and  the  insurers,  under  their  rules,  had  charged  their 
agent  with  the  amount  —  not  hearing  of  the  default  from  him, 
of  which  it  was  the  agent's  duty  to  notify  them  immediately, — 
and  the  insured,  some  days  afterwards,  paid  the  premium  which 
was  received  by  the  agent,  it  was  held  that  this  was  not  suffi- 
cient to  renew  the  policy.^    This  seems  to  be  a  harsh  and  extreme 

make  the  slayer  guilty  of  manslaughter  only.  Harper  v.  The  Phoenix  Insurance 
Co.  18  Missouri,  109.  Where  a  slave  refused  to  surrender  to  patrols,  and  attempting 
his  escape,  was  shot  by  one  of  them  in  the  right  side,  of  which  wound  he  died  in  a 
few  minutes,  this  was  held  not  to  come  within  the  cases  excepted  in  a  policy  of  insur- 
ance on  liis  life,  of  "death  by  means  of  invasion,  insurrection,  riot,  or  civil  commotion, 
or  of  any  military  or  usurped  authority,  or  by  the  hands  of  justice."  Spruill  v.  N.  C. 
Mutual  Life  Insurance  Co.  1  Jones,  (Nor.  Car.)  126. 

1  M'Donnell  v.  Carr,  Hayes  &  Jones,  (Irish,)  256.  But  see  The  Mutual  Benefit  Life 
Insurance  Co.  v.  Ruse,  8  Georgia,  545.  If  the  language  of  the  policy  be  such  as  indi- 
cates the  intention  of  the  parties  that  the  payment  of  the  premium,  during  the  fifteen 
days,  is  to  be  made  by  the  life-insured  personally,  or  during  his  life,  then  if  he  dies,  and 
the  premium  is  paid  by  liis  executors  during  the  fifteen  days,  the  sum  insured  cannot 
be  recovered  of  the  company.  Want  v.  Blunt,  12  East,  183.  Where  tlie  printed  pro- 
posals allow  a  certain  time  within  which  the  premium  may  be  paid,  after  it  becomes 
due,  and  they  arc  not  referred  to  in  the  policy  so  as  to  become  a  part  of  the  contract, 
the  life-insured  dying  after  the  premium  becomes  due,  the  executors  cannot,  by  a  tender 
thereof  within  tlie  time  allowed  by  the  proposals,  recover  on  the  policy.  Mutual  Benefit 
Life  Insurance  Co.  ik  Ruse,  supra. 

^  Acey  V.  Fernie,  7  M.  &  W.  151.  Lord  Abinger,  C.  B.  said:  "  It  seems  to  me  that 
the  provision  that  he  (the  agent,)  sliould  be  debited  as  if  the  premium  was  paid,  was  to 
operate  as  a  penalty  on  him ;  l)ut  does  not  authorize  third  persons  to  take  advantage 
of  that  which  was  a  mere  private  arrangement  Ijetween  the  company  and  the  agent,'  for 
the  purpose  of  insuring  the  due  payment  of  all  moneys  which  were  to  be  received  by 
him."  Pdfke,  B.,  after  stating  that  the  agent  was  not  the  general  agent  of  the  company, 
but  merely  an  agent  with  limited  powers  to  receive  premiums,  said  :    "  It  is  impossible 


-.♦• 


CH.  XX.]  LIFE   INSUEANCE.  547 

case  ;  for  if  the  insurers  had  themselves  received  and  accepted 
the  money  from  the  insured,  there  seems  no  reason  for  doubting 
that  this  would  have  bound  them.  Practically,  the  utmost  care 
is  requisite  on  the  part  of  the  assured,  to  pay  his  premium  before, 
or  as  soon  as  it  is  due.  This  is  the  only  proper  and  safe  course. 
But  we  believe  it  to  be  not  unusual  for  the  insurers  to  accept  the 
premium  if  offered  them .  a  few  days  after,  and  continue  the 
policy  as  if  it  were  paid  in  season,  provided  no  change  in  the  risk 
has  occurred  in  the  mean  time. 

The  time  of  the  death  is  sometimes  very  important.  If  the 
policy  be  for  a  definite  period,  it  must  be  shown  that  the  death 
occurs  within  it.^  And  the  terms  of  the  policy  may  possibly 
make  it  necessary  to  determine  which  of  two  persons  lived  long- 
est; as,  if  a  sum  were  insured  on  the  joint  lives  of  two  persons, 
to  be  paid  to  the  representatives  of  the  suiivivor.  In  the  cases  in 
which  a  question  of  this  kind  has  been  raised,  there  has  been 
some  disposition  to  establish  certain  presumptions  of  the  law; 
as  that  the  older  survived  the  younger,  or  the  reverse ;  or  that 
the  man  survived  the  woman.^  We  apprehend,  however,  that 
there  is  not,  and  cannot  be  any  other  presumption  of  law  on  the 


to  consider  the  debiting  of  the  agent  with  the  amount  of  the  premium  as  a  payment  on 
the  original  day,  according  to  the  allegation  in  the  first  count ;  the  only  question 
is,  did  the  company  mean  to  make  themselves  liable  as  on  a  new  contract  1  It  seems 
to  me  that  they  did  not,  and  that  the  meaning  of  the  transaction  was  merely  to  keep 
their  agents  right,  and  in  case  of  neglect  to  be  able  to  come  upon  agents  for  the  amount 
of  the  premium,  by  way  of  penalty ;  but  they  did  not  mean  thereby  to  make  themselves 
liable  for  the  amount  of  the  policy.  It  is  only  on  the  ground  that  they  became  liable 
upon  a  new  contract,  that  any  thing  can  be  made  of  the  case  on  the  part  of  the  plaintiff. 
It  appears  to  me  that  this  was  purely  a  mode  of  keeping  their  own  agents  in  order,  by 
holding  over  them,  in  terrorem,  that  they  should  be  responsible  for  the  amount  of  the 
money  not  received. 

*  1  In  Lockyer  v.  Offley,  I  T.  E.  260,  it  was  said  by  Wilks,  J. :  "  Suppose  an  insur- 
ance on  a  man's  life  for  a  year,  and  some  short  time  before  the  expiration  of  the  term, 
he  receives  a  mortal  wound,  of  which  he  dies  after  the  year,  the  insurer  would  not  be 
liable." 

^  1  Greenl.  Ev.  §  29.  The  arbitrary  presumptions  of  the  civil  law  have  not  been  adopt- 
ed in  the  common  law.  In  Rex  i'.  Dr.  Hay,  1  Wm.  Black.  640,  the  case  of  Gen.  Stan- 
wix,  who  perished,  with  his  wife  and  daughter,  in  a  vessel  which  was  never  heard  from, 
according  to  Sir  Wm.  Scott,  a  compromise  was  effected  on  the  recommendation  of  Lord 
Mansfield,  -who  said  there  was  no  legal  principle  on  which  he  could  decide  it.  2  Philli- 
more,  268,  n.  In  Mason  v.  Mason,  1  Meriv.  308,  where  all  on  board  a  vessel  on  a  voyage 
from  India,  were  shipwrecked,  and  the  question  was  as  to  the  survivorship  between  a 
father  and  son,  the  rules  of  the  civil  law  were  not  accepted,  and  an  issue  of  fact  was 
directed  to  the  jury.  In  some  cases  the  comparative  age,  health,  strength,  and  experi- 
ence of  the  jiarties  have  been  regarded  as  sufficient  to  furnish  presumptions  of  survi- 
vorship. Sillick  V.  Booth,  1  You.  &  Collyer,  Ch.  121;  Coye  v.  Leach,  8  Mete.  375. 
And  where  these  furnish  no  decisive  tests,  the  presumption  that  both  died  at  the  same 
time  has  been  adopted.  Taylor  v.  Diplock,  2  Phillim.  261  ;  Selwyn's  case,  3  Hagg. 
Ec.  748  ;   Coye  v.  Leach,  8  Mete.  371 ;  Moehring  v.  Mitchel,  1  Barb.  Ch.  264. 


548  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XX. 

subject,  than  that,  after  a  certain  period  of  absence  and  silence, 
there  is  a  presumption  of  death ;  and  seven  years  has  been  men- 
tioned in  England  and  in  this  country  ^  as  this  period,  and  even 
sanctioned  by  legislation  in  New  York .2  But  all  questions  of 
this  kind  we  regard  as  pure  questions  of  fact.  Whichever  party 
rests  his  case  upon  death  or  life,  at  a  certain  time,  must  satisfy 
the  jury  upon  this  point,  by  such  evidence  as  may  be  admissible, 
and  relevant.^  If  the  presumption  of  death  in  seven  years  is 
relied  upon,  it  has  been  supposed  that  this  strongly  imports  life 
during  that  period  and  death  only  at  the  end,*  unless  there  be 
evidence  of  some  particular  peril  at  some  definite  time  ;  but  this 
may  be  doubted.^ 


SECTION  IV. 

OF   THE   INTEREST   OF   THE   INSURED. 

Every  one  insured  in  any  way,  must  have  an  interest  in  the 
subject-matter  of  the  insurance.     Any  one  may  insure  his  own 

1  In  Loring  v.  Steineman,  1  Mete.  211,  Shaiv,  C.  J.,  said :  "  The  only  remaining  ques- 
tion is  a  question  of  fact  upon  the  evidence.  It  is  a  well  settled  rule  of  law,  that  upon 
a  person's  leaving  his  usual  home  and  place  of  residence  for  temporary  purposes  of  busi- 
ness or  pleasure,  not  being  heard  of,  or  known  to  be  living,  for  the  term  of  seven  years, 
the  presumption  of  life  then  ceases,  and  that  of  his  death  arises.  2  Stark.  Ev.  457  ; 
Doe  V.  Jesson,  6  East,  85.  But  this  presumption  may  be  rebutted  by  counter-evidence. 
Hopewell  v.  De  Pinna,  2  Campb.  113,  or  by  a  conflicting  presumption.  .  The  King  v. 
Twyning,  2  Bam.  &  Aid.  386.  This  presumption  is  greatly  strengthened,  when  the 
departure  of  an  individual  from  his  native  place,  the  seat  of  his  ancestors,  and  the 
home  of  his  brothers  and  sisters  and  family  connexions  ;  and  still  further,  where  it  was 
to  enter  upon  the  perilous  employment  of  a  seafaring  life,  and  when  he  has  not  been 
heard  of  by  those  who  would  be  most  likely  to  know  of  him,  for  upwards  of  thirty 
years."  McCartee  y.  Camel,  1  Barb.  Ch.  455  ;  Smith  v.  Knowlton,  11  N.  H.  196; 
Cofer  V.  Flanagan,  1  Kelly,  (Geo.)  538.  This  presumption  does  not  arise  where  the 
party,  when  last  heard  from,  had  a  fixed  and  known  residence  in  a  foreign  country. 
McCartee  v.  Camel,  supra.      In  re  Creed,  1  Drury,  Ch.  235. 

2  2  N.  Y.  Rev.  Stats,  c.  34,  §  6. 
^  See  cases  cited  in  note  1 . 

*  Smith  V.  Knowlton,  11  N.  H.  196;  Burr  v.  Sim,  4  Whart.  150;  Bradley  v.  Bradley, 
id.  173  ;  Tilly  v.  Tilly,  2  Bland,  Ch.  (Md.)  445. 

^  It  is  held  in  England  that  where  a  person  has  not  been  heard  of  for  seven  years, 
there  is  no  presumption  as  to  the  time  of  his  death,  and  the  fact  that  he  died  at  the 
expiration  of  seven  years,  or  at  any  other  time  within  the  seven  years,  must  be  proved 
by  the  party  relying  on  it.  Knight  v.  Nepean,  5  B.  &  Ad.  86  ;  S.  C.  2  M.  &  W.  894, 
913.  Lord  Denman,  C.  J.:  "Now  when  nothing  is  heard  of  a  person  for  seven  years, 
it  is  obviously  a  matter  of  complete  uncertainty  at  what  point  of  time  in  those  seven 
years  he  died  ;  of  all  the  points  of  time,  the  last  day  is  the  most  improbable,  and  most 
inconsistent  with  the  ground  of  presuming  the  fact  of  his  death."  The  King  v.  Har- 
borne,  2  Ad.  &  Ell.  540;  In  re  Creed,  1  Drury,  Ch.  235.  The  English  doctrine  is 
held  in  New  York.  McCartee  v.  Camel,  1  Barb.  Ch.  462.  See,  also,  Paterson  v. 
Black,  2  Park  on  Ins.  920,  (8th  ed.) 


CH.  XX.]  LIFE  INSURANCE.  549 

life ;  but  if  the  insured  and  the  life  insured  are  not  the  same,  in- 
terest may  be  shown.'  The  English  statutes  have  been  supposed 
to  require  this;  and  although  we  have  no  precise  legislation  on 
the  subject,  it  must  be  true  in  this  country,  that  an  insurance  of 
any  kind  without  interest,  is  a  mere  wager,  and  a  void  contract. 

The  general  rule  is,  that  any  substantial  pecuniary  interest  is 
sufficient,  although  not  strictly  legal  nor  definite.  This  has  been 
held  in  the  case  of  a  sigter,  dependent  on  a  brother  for  support ;  ^ 
and  the  rule  would  be  held  to  apply  not  only  to  all  relations,  but 
where  there  was  no  relationship,  if  there  were  a  positive  and  real 
dependence.^ 

So,  an  existing  debt  gives  the  creditor  an  insurable  interest  in 
the  life  of  the  debtor.*  But  if  the  debt  be  not  founded  on  a  legal 
consideration,  it  does  not  sustain  the  policy.^     And  if  the  debt 

1  Wainewright  v.  Bland,  1  Moody  &  Rob.  481 ;  S.  C  1  M.  &  W.  32.  But  although 
the  policj'^  on  its  face  may  appear  to  have  been  obtained  by  the  life-assured,  if  in  fact 
another  person,  not  interested  in  his  life,  found  the  funds  for  the  premiums,  and  in- 
tended, when  it  was  procured,  to  get  the  benefit  of  it  by  assignment  or  otherwise,  it 
will  be  declared  the  policy  of  that  other  persdb,  and  void,  as  an  evasion  of  the  statute 
of  14  Geo.  .3,  c.  48,  §§  1,  2. 

2  Lord  V.  Dall,  12  Mass.  115,  118.  Parker,  C.  J.:  "But  it  is  said  the  interest  must 
be  pecuniary,  legal  interest,  to  make  the  contract  valid ;  one  that  can  be  noticed  and 
protected  by  the  law;  such  as  the  interest  which  a  creditor  has  in  the  life  of  a  debtor, 
a  child  in  that  of  his  parent,  &c.  The  former  case,  indeed,  of  the  creditor,  would  have 
no  room  for  doubt.  But  with  respect  to  a  child,  for  whose  benefit  a  policy  may  be 
effected  on  the  life  of  the  parent,  the  interest,  except  the  insurable  one  which  may 
result  from  the  legal  obligation  of  the  parent  to  save  the  child  from  public  charity,  is 
as  precarious  as  that  of  a  sister  in  the  life  of  an  affectionate  brother.  For,  if  the  brother 
may  withdraw  all  support,  so  may  the  father,  except  as  before  stated.  And  yet  a 
policy  effected  by  a  child  upon  the  life  of  a  father,  who  depended  on  some  fund  termin- 
able by  his  death,  to  support  the  child,  would  never  be  questioned ;  although  much 
more  should  be  secured  than  the  legal  interest  which  the  child  had  in  the  protection  of 
his  father.  Indeed,  we  are  well  satisfied  that  the  interest  of  the  plaintiff  in  the  life  of 
her  brother  is  of  a  nature  to  entitle  her  to  insure  it." 

^  A  wife  has  an  insurable  interest  in  the  life  of  her  husband.  Reed  v.  The  Royal 
Exchange  Assurance  Co.,  Peake's  Ad.  Cas.  70  ;  St.  John  v.  American  Mutual  Life  Ins. 
Co.  2  Duer,  R.  429.  In  Halford  v.  Kymcr,  10  B.  ,&  C.  724,  it  was  held  that  a  father 
cannot  in  his  own  name,  for  his  own  benefit,  insure  his  son's  life,  though  he  may  make 
an  insurance  on  the  son's  life,  in  the  son's  name,  and  for  the  son's  benefit. 

*  Anderson  v.  Edie,  N.  P.  B.  R.  1795 ;  2  Park  on  Ins.  (8th  ed.)  915.  In  this  case, 
Lord  Kenyon  said  :  "  It  was  singular  that  this  question  had  never  been  directly  decided 
before  ;  that  a  creditor  had  certainly  an  interest  in  the  life  of  his  debtor,  because  the 
means  by  which  he  was  to  be  satisfied,  might  materially  depend  on  it ;  and  that,  at  all 
events,  the  death  must,  in  all  cases,  in  some  degree,  lessen  the  security."  See  com- 
ments on  this  case,  in  Ellis  on  Ins.  p.  125.  It  seems  that  the  purchaser  of  an  expected 
devise  from  the  expectant  devisee,  may  insure  the  life  of  the  testator.  Cook  v.  Field,  15 
Q.  B.  460.  A  trustee  may  insure  for  the  benefit  of  the  trust.  Tidswell  v.  Angerstein, 
Peake,  151 ;  Ward  v.  Ward,  23  Eng.  L.  &  Eq.  442.  If  A,  being  indebted  to  B,  die, 
and  C  agree  to  pay  the  debt,  by  instalments,  in  five  years,  B  has  an  insurable  interest 
in  the  life  of  C,  for  those  five  years.  Von  Lindenau  v.  Desborough,  3  C.  &  P.  353. 
So,  the  grantee  of  an  annuity  for  one  or  more  lives,  has  an  insurable  interest  in  those 
lives.     Holland  v.  Pelham,  1  Cromp.  &  Jerv.  575. 

6  Dwyer  v.  Edie,  1788;  2  Park  on  Ins.  (8th  ed.)  914. 


550  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XX. 

be  paid,  even  after  the  death  of  the  debtor,  but  before  the  sum 
insured  is  paid  by  the  insurers,  they  were,  as  the  law  forn:ierly 
stood,  discharged.  So  they  would  be  on  the  general  principles 
of  insurance,  if  on  any  ground,  or  by  any  means,  the  whole  risk 
of  the  insured  is  terminated,  and  he  cannot  suffer  any  loss  by  the 
death  of  the  life-insured.  But  recent  adjudication  in  England 
has  unsettled  the  former  rule  in  regard  to  this  question.^     In  this 

1  The  case  of  Godsall  v.  Boldero,  9  East,  72,  has  a  double  interest,  as  well  in  the 
celebrity  of  the  life-insured,  as  in  the  severe  examination  to  which  it  has  recently  been 
subjected.  The  plaintiffs  were  creditors  of  the  Rt.  Hon.  William  Pitt,  and  on  Novem- 
ber 29,  1803,  o'btained,  from  the  Pelican  Life  Insurance  Company,  an  insurance  on  his 
life  for  seven  years,  renewable  from  year  to  year  for  seven  years,  at  an  annual  premium 
which  was  duly  paid,  and  the  policy  renewed*  until  his  death,  on  January  23,  1806. 
The  debt  of  Mr.  Pitt,  at  the  time  the  policy  was  effected,  and  during  the  rest  of  his 
life,  was  equal  to  the  sum  of  .£500,  and  at  his  decease  amounted  to  £1,109,  lis.  6c?., 
which  sum,  he  dying  insolvent,  was  paid  to  the  plaintiffs  by  his  executors,  the  Earl  of 
Chatham  and  the  Lord  Bishop  of  Lincoln,  out  of  the  money  granted  by  parliament  for 
that  purpose.  The  insurance  company,  against  which  this  suit  was  brought  on  the 
policy,  resisted  payment,  on  the  ground  that  the  contract  of  life  insurance  was  one  of 
indemnity,  and  the  plaintiffs,  having  been  fully  paid,  had  been  fully  indemnified.  This 
defence  was  sustained.  Lord  Ellenborough,  C.  J.,  delivering  the  judgment,  said:  "This 
assurance,  as  every  other  to  which  the  law  gives  effect,  (with  the  exceptions  only  which 
are  contained  in  the  second  and  third,  sections  of  the  statute  Geo.  2,  c.  27,)  is  in  its 
nature  a  contract  of  indemnity,  as  distinguished  from  a  contract  by  way  of  gaming  or 
wagering.  The  interest  which  the  plaintiffs  had  in  the  life  of  Mr.  Pitt,  was  that  of 
creditors ;  a  description  of  interest  which  has  been  held  in  several  late  cases  to  be  au 
insurable  one,  and  not  within  the  prohibition  of  the  statute  14  Geo.  3,  c.  48,  §  1.  That 
interest  depended  upon  the  life  of  Mr.  Pitt,  in  respect  of  the  means,  and  of  the  proba- 
bility, of  payment  which  the  continuance  of  his  life  afforded  to  such  creditors,  and  the 
probability  of  loss  which  resulted  from  his  death.  The  event  against  which  the  indem- 
nity was  sought  by  this  assurance,  was  substantially  the  expected  consequence  of  his 
death  as  affecting  the  interest  of  these  individuals  assured  in  the  loss  of  their  debt. 
This  action  is,  in  point  of  law,  founded  upon  a  supposed  damnification  of  the  plaintiffs, 
occasioned  by  his  death,  existing  and  continuing  to  exist  at  the  time  of  the  action 
brought ;  and  being  so  founded,  it  follows,  of  course,  that,  if,  before  the  action  was 
brought,  the  damage,  which  was  at  first  supposed  likely  to  result  to  the  creditors  from 
the  death  of  Mr.  Pitt,  were  wholly  obviated  and  prevented  by  the  payment  of  his 
debt  to  them,  the  foundation  of  any  action  on  their  part,  on  the  ground  of  such  insur- 
ance, fails.  And  it  is  no  objection  to  this  answer,  that  the  fund  out  of  which  their  debt 
was  paid,  did  not  (as  was  the  case  in  the  present  instance)  originally  belong  to  the 
executors,  as  a  part  of  the  assets  of  the  deceased ;  for,  though  it  were  devised  to  them 
aliunde,  the  debt  of  the  testator  was  equally  satisfied  by  them  thereout ;  and  the  damni- 
fication of  the  creditors,  in  respect  of  which  their  action  upon  the  assurance  is  alone 
maintainable,  was  fully  obviated  before  their  action  was  brought.  This  is  agreeably  to 
the  doctrine  of  Lord  Mansfield,  in  Hamilton  v.  Mendes,  2  Burr.  1210.  The  words  of 
Lord  Mansfield  arc :  '  The  plaintiff's  demand  is  for  indemnity  ;  his  action,  therefore, 
must  be  founded  upon  the  nature  of  the  damnification,  as  it  really  is  at  the  time  the 
action  is  brought.  It  is  repugnant,  upon  a  contract  for  indemnity,  to  recover  as  for  a 
total  loss,  when  the  event  has  decided  that  the  damnification  in  truth  is  an  average,  or, 
perhaps,  no  loss  at  all.  Whatever  undoes  the  damnification  in  the  whole,  or  in  part, 
must  operate  upon  the  indemnity  in  the  same  degree.  It  is  a  contradiction  in  terms, 
to  bring  an  action  for  indemnity,  where,  upon  the  whole  event,  no  damage  has  been 
sustained.'  Upon  this  ground,  therefore,  that  the  plaintiffs  had  in  this  case  no  sub- 
sisting cause  of  action  in  point  of  law,  in  respect  of  their  contract,  regarding  it  as  a 
contract  of  indemnity  at.the  time  of  the  action  brought,  we  are  of  opinion  that  a  verdict 
must  be  entered  for  the  defendant  on  the  first  and  third  pleas,  notwithstanding  the 
finding  in  favor  of  the  plaintiffs  on  the  second  plea."  The  case  of  Godsall  v.  Boldero, 
was  recognized  and  approved  in  several  subsequent  decisions.    Bainbridge  v.  Neilson, 


CH.  XX.]  LIFE   INSURANCE,  651 

country,  life  insurance  companies  sometimes  avoid  the  question, 
by  making  it  a  part  of  the  contract,  that  the  insured  creditor 

10  East,  344;  Tunno  v.  Edwards,  12  id.  493;  Barber  v.  Morris,  1  Mood.  &  R.  62.  Ex 
parte  Andrews,  1  Madd.  573 ;  Humphrey  v.  Arabin,  Lloyd  &  Goold's  Irish  Rep.  temp. 
Plunkett,  318;  Phillips  v.  Eastwood,  id.  temp.  Sugden,  281 ;  Hcnson  v.  Blackwell,  4 
Hare,  434.  It  also  found  a  place  in  Smith's  Leading  Cases,  vol.  2,  p.  157,  and  was 
there  characterized  as  "  established  doctrine,"  and  so  cited  by  all  the  text-writers  on  the 
subject  of  life  insurance.  Notwithstanding  this  array  of  authority  in  its  support,  it  ia 
no  longer  law  in  England.  It  seems  to  have  been  disregarded  from  the  first  by  the  in- 
surance companies,  as  appears  from  the  evidence  of  custom,  in  Barber  v.  Morris,  1 
Moody  &  Ry.  62.  Even  in  the  principal  case  itself,  the  office  is  understood  not  to  have 
availed  itself  of  the  verdict,  but  to  have  paid  the  money  to  the  plaintiffs  before  they  left 
the  court.  Ellis,  126,  note  (e.)  Its  principle  was  strongly  condemned  by  the  learned 
Professor  de  Morgan,  in  his  "  Essay  on  Probabilities  and  their  Application  to  Life 
Contingencies  and  Assurance  Offices,"  (Cabinet  Encyclopaedia,  Longman  &  Co.  1838, 
pp.  244-248,)  who  says:  "  We  cannot  be  too  much  surprised  at  the  ignorance  shown 
by  that  judge  who  declared  that  life  insurance  was  of  its  own  nature  a  contract  of  in- 
demnity." It  was  finally  overruled  (Nov.  13,  1854,)  by  the  Court  of  Exchequer,  in 
Dalby  v.  The  India  and  London  Life  Assurance  Co.  28  Eng.  L.  &  Eq.  312,  S.  C.  18 
Jurist,  No.  935.  In  this  case.  Rev.  John  Wright,  having  an  interest  in  the  life  of  the 
Duke  of  Cambridge,  to  the  amount  of  £3,000,  eff'ected  four  policies  of  insurance  with 
the  Anchor  Assurance  Company  on  the  duke's  life  for  that  amount,  and  that  company 
effected  a  policy  with  the  defendants,  by  way  of  counter-assurance,  for  £1,000  of  the 
amount.  Mr.  Wright  afterwards,  in  consideration  of  an  annuity,  surrendered  the  four 
policies  to  the  Anchor  Assurance  Company,  and  three  of  them  were  cancelled ;  but 
that  company  paid  premiums  to  the  defendants  on  the  other  policy  effected  with  them, 
until  the  duke's  death.  The  defendants,  being  sued  by  the  last-named  company  on  the 
£1,000  policy,  resisted  payment,  on  the  ground  that  the  Anchor  Assurance  Company 
had  no  interest  in  the  life-assured  at  his  decease,  and  the  contract  of  life  assurance  was 
one  of  indemnity.  This  defence  and  the  case  of  Godsall  v.  Boldero,  were  overruled. 
It  was  held,  {Parke,  B.,  delivering  the  judgment,)  that  "the  contract,  commonly  called 
'life  assurance,'  when  properly  considered,  is  a  mere  contract  to  pay  a  certain  sum  of 
money  on  the  death  of  a  person,  in  consideration  of  the  due  payment  of  a  certain 
annuity  for  his  life,  the  amount  of  the  annuity  being  calculated  in  the  first  instance, 
according  to  the  probable  duration  df  the  life  ;  and  when  once  fixed,  it  is  constant  and 
invariable.  The  stipulated  amount  of  annuity  is  to  be  uniformly  paid  on  one  side,  and 
the  sum  to  be  paid  in  the  event  of  death,  is  always  (except  where  bonuses  have  been 
given  by  prosperous  offices,)  the  same  on  -the  other.  This  species  of  assurance  in  no 
way  resembles  a  contract  of  indemnity."  Pages  317,  318.  The  case  of  Dalby  v.  The 
India  and  Loudon  Life  Assurance  Co.  has  more  recently  (Jan.  15,  16,  1855,)  been 
followed  and  approved  on  the  other  side  of  Westminster  Hall,  by  Vice-Chancellor 
Wood,  in  an  able  judgment,  overruling  Godsall  v.  Boldero.  Law  v.  The  London  In- 
disputable Life  Policy  Co.  19  Jurist,  178.  The  plaintiff,  on  April  9,  1855,  (the  date  of 
the  policy  in  dispute,)  purchased  a  contingent  legacy  of  upwards  of  £3,000,  to  which 
his  son  would  be  entitled  on  attaining  the  age  of  thirty  years.  The  policy  was  granted 
for  two  years,  and  would  expire  April  9,  1852.  The  son  lived  to  complete  his  thirtieth 
year  on  Jan.  16,  1852,  thus  fulfilling  the  contingency,  and  the  legacy  was  received  by 
the  father.  The  son,  singularly  enough,  died  on  Jan.  22,  six  days  after  attaining  the 
age  of  thirty.  The  defendant  company,  notwithstanding  its  name  and  the  promises  to 
the  contrary,  in  its  prospectus,  refused  to  pay  the  sum  insured,  maintaining  that  the 
plaintiff's  interest  ceased  on  his  receiving  the  legacy.  The  Vice-Chanccllor,  overruling 
this  defence,  said :  "  On  the  main  question,  I  think  the  case,  which  has  been  recently 
decided  in  the  Court  of  Exchequer,  reversing  Godsall  v.  Boldero,  completely  rules  the 
present.  Godsall  v.  Boldero  was  not  a  decision  which  met  with  universal  approbation, 
and  the  decision  of  the  Exchequer  Chamber  places  the  matter  upon  what,  I  confess, 
appears  to  me,  independent  of  the  high  authority  of  that  Court  of  Appeal,  to  be  the 
right  footing  with  regard  to  policies  of  this  description.  Policie.?  on  fire  and  on  marine 
risks  are  policies  expressly,  in  the  very  words  of  the  policies,  made  to  recompense  a 
loss  which  the  parties  may  sustain  in  consequence  of  the  calamities  against  which  the 
policies  are  effected  ;  therefore,  when  that  loss  is  made  good  aliunde,  the  company  are 
not  liable  in  any  way,  under  the  express  terms  of  their  contract,  in  respect  of  that  which 


552  ELEMENTS    OF   MERCANTILE   LAW.  *      [CIL  XX. 

shall  transfer  to  the  company  an  amount  of  his  debt  equal  to 
that  for  which  he  is  insured. 

A  difficult  question  arises,  when  the  representatives  of  the 
debtor,  or  a  surety  or  guarantor  of  the  debt,  defend  themselves 
on  the  ground  that  the  debt  is  paid  and  fully  discharged  by  the 
payment  under  the  policy.  The  cases  may  not  settle  this  ques- 
tion ;  ^  nor  does  the  practice,  so  far  as  we  are  aware  of  it.  But 
we  should  say,  very  confidently,  that  the  general  principles  of  all 
insurance  would  lead  to  the  conclusion,  that  by  such  payment 
the  debt  is  paid,  so  far  as  the  creditor  is  concerned ;  but  that  the 
insurers  are  subrogated  to  the  rights  of  the  insured,  and  may 
prosecute,  in  his  name,  but  for  their  own  benefit,  any  action 
which  he  might  prosecute  himself.^ 

has  not  accrued,  namely,  loss  ;  but  when  the  question  comes  to  be  a  question  on  a  life 
policy,  there  is  no  such  contract  on  the  policy  itself.  The  policy  never  refers  to  the 
cause  or  reason  for  effecting  the  assignment.  The  policy  is  a  contract  in  the  simplest 
form  ;  that,  in  consideration  of  an  annuity  payable  annually  to  the  insurer,  the  insurer 
will,  at  the  expiration  of  a  particular  life,  pay  a  certain  sum  of  money  to  the  insured, 
who  pays  those  annual  payments,  which  are  calculated  by  the  company  upon  the  value 
which  they  think  ought  to  be  paid,  in  order  to  enable  them  to  make  the  postponed  pay- 
ment. They  make  no  reference  to  any  other  circumstance  or  event ;  they  have  founded 
their  calculation  upon  the  probability  of  the  duration  of  human  life,  and  they  get  paid 
the  full  value  of  that  calculation.  On  what  principle  can  it  be  afterwards  said,  that, 
because  somebody  else  is  good  enough  to  satisfy  the  object  which  the  insured  had  in 
view  when  he  effected  the  insurance,  the  insurer  should  be  released  from  the  contract?  " 
These  cases,  it  may  be  remarked,  decide  that  the  interest  of  the  creditor  in  the  life  of 
his  debtor,  required  by  the  English  statute,  is  only  an  interest  existing  when  the  policy 
is  procured.  The  overruling  of  Godsall  v.  Boldero,  on  both  sides  of  Westminster  Hall, 
is  welcomed  by  the  London  Jurist,  in  two  recent  numbers,  with  some  well-considered 
remarks.  Vol.  18,  No.  935,  p.  485,  Dec.  9,  1854  ;  Vol.  19,  O.  S.  No.  944,  p.  .37,  Feb. 
10,  1855.  See  39  London  Law  Mag.  0.  S.  p.  202.  There  appears  to  be  no  American 
case  in  which  the  point  at  issue  in  the  cases  cited  was  passed  upon.  That  of  Craig  v. 
Margatroyd,  4  Yeates,  169,  cited  in  the  notes  of  the  American  edition  to  Godsall  v. 
Boldero,  in  Smith's  Leading  Cases,  as  conlirmatory  of  that  case,  involved  a  marine 
and  not  a  life  insurance.  In  New  York,  on  the  contrary,  it  is  held  that,  where  a  debtor 
procures  an  insurance  on  his  life  and  assigns  the  policy,  the  right  of  the  assignee  to 
demand  and  enforce  the  stipulated  payment  is  no  more  liable  to  doubt  or  dispute  than 
that  of  an  executor  or  administrator.  St.  John  v.  American  Mutual  Life  Ins.  Co.  2 
Duer,  (N.  Y.)  R.  419.  In  some  policies  there  is  a  stipulation,  that,  in  case  of  loss,  the  ' 
insured  creditor  will  assign  to  the  insurance  company  a  portion  of  the  debt  equal  to 
the  sum  received  of  the  company.     Cutler  v.  Rand,  8  Cush.  89. 

1  But  in  Humphrey  v.  Arabin,  Lloyd  &  Goold's  Cases,  (temp.  Plunkett,)  318,  it  was 
held,  that,  if  an  insured  creditor  was  paid  the  whole  debt  by  insurers  on  the  life  of  the 
debtor,  the  executor  or  administrator  of  the  creditor  could  not  require  him  to  abate  his 
claim  pro  tanto,  or  credit  the  estate  with  it.  We  should  say  so  too ;  but  we  should  be 
disposed  to  add,  as  in  the  text,  that  the  whole  claim  passed  over  by  subrogation  to  the 
insurers.     Recent  decisions,  however,  leave  this  in  some  doubt. 

■^  See  Henson  v.  Blackwell,  4  Hare,  434.  It  was  held,  in  Humphrey  v.  Arabin, 
Lloyd  and  Goold's  Cas.  temp.  Plunkett,  318,  that,  where  there  was  nothing  to  raise  the 
relation  of  trustee  and  cestui  que  trust  between  the  creditor  and  debtor  in  respect  to  the 
policy,  the  debtor  cannot  avail  himself  of  the  payment  of  the  sum  insured  in  a  policy. 


en.  XX.]  LIFE  IXSURANCE.  553 

SECTION   V. 
OF   THE   ASSIGNMENT   OF   A    LIFE   POLICY. 

Life-policies  arc  assignable  at  law,  and  are  very  frequently 
assigned  in  practice.'  A  large  proportion  of  the  policies  which 
are  effected,  are  made  for  the  purpose  of  assignment ;  that  is,  for 
the  purpose  of  enabling  the  insured  to  give  this  additional  secur- 
ity to  his  creditor.  If  the  rules  of  the  company  or  the  terms  of 
the  policy  refer  to  an  assignment  of  it,  they  are  binding  on  the 
parties.  On  the  one  hand,  an  assignment  would  operate  as  a 
discharge  of  the  insurers,  to  which  a  rule  or  expressed  provision 
gave  this  effect.^  And,  on  the  other,  if  the  agreement  were  that 
the  policy  should  continue  in  favor  of  the  assignee,  even  after  an 
act  which  discharged  it  as  to  the  insured  himself, —  as,  for 
example,  his  suicide,  —  the  insurers  would  be  bound  by  it.^ 

It  is  an  important  question,  what  constitutes  an  assign- 
ment. The  general  answer  must  be,  any  act  distinctly  importing 
an  assignment.  And,  therefore,  a  delivery  and  deposit  of  the 
policy,  for  the  purpose  of  assignment,  will  operate  as  such,  with- 
out a  formal  written  assignment.  So  will  any  transaction  which 
gives  to  a  creditor  of  the  insured  a  right  to  payment  out  of  the 


insurance 


It  seems,  however,  that  delivery  is  necessary.     And  where  an 

1  Ashley  v.  Ashley,  3  Simon,  Ch.  149  ;  Godsall  v.  Webb,  2  Keene,  Ch.  99  ;  Barber 
V.  Butcher,  8  Q.  B.  863  ;  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Maryland,  341,  But  sec  ante, 
p.  549,  n.  1. 

2  Where,  by  the  terms  of  a  life  insurance  policy,  the  company  agreed  with  "  the 
assured,  his  executors,  administrators,"  to  pay  the  amount  to  his  "legal  representa- 
tives," after  due  notice  and  proof  of  death,  and  at  the  foot  of  the  policy  were  these 
words,  '-N.  B.  If  assigned,  notice  to  be  given  to  the  company,"  it  was  held  that  the 
provision  to  pay  to  the  "  legal  representative,"  was  designed  to  apply  only  to  a  case 
where  the  party  died  without  having  previously  assigned,  and  is  not  to  be  construed  as 
in  any  sense  limiting  the  power  of  assignment;  and  further,  that  the  reasons  which 
require  the  assent  of  the  underwriters  as  indispensable  to  the  validity  of  assignments  of 
fire  policies,  do  not  apply  to  insurance  on  life.  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Mary- 
land, 341. 

'^  Cook  V.  Black,  1  Ilarc,  390.  And  such  a  provision  is  not  void  as  illegal  or  against 
public  policy.  Moore  v.  Woolsey,  28  Eng.  L.  &  Eq.  248,255.  But,  in  order  to  protect 
the  assignee  against  acts  of  the  assignor,  which  would  amount  to  a  forfeiture  if  ho  were 
the  holder  of  the  policy,  there  must  he  this  special  provision  in  favor  of  the  assignee. 
The  Amicable  Society  v.  BoUand,  4  Bligh,  N.  S.  194. 

■*  In  re  Stvan,  1  Phillips,  Ch.  105  ;  Cook  v.  Black,  1  Hare,  390;  Moore  v.  Woolsey, 
28  Eng.  L.  &  Eq.  248;  Wells  v.  Archer,  10  S.  &  R.  412;  Harrison  v.  McConkey, 
1  Maryland,  Ch.  34  ;  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Maryland,  341.  The  voluntary 
payment  of  premiums  on  a  policy  of  life  insurance,  gives  to  the  payer  no  interest  in 
the  policy.    Burridge  v.  How,  1  You.  &  Col.  Ch.  183. 

47 


554  ELEMENTS   OF  MERCANTILE   LAW.  [CIL  XX. 

assignment  was  indorsed  on  the  policy,  and  notice  given  to  the 
insurers,  but  the  policy  remained  in  the  possession  of  the  in- 
sured, it  was  held  that  there  was  no  assignment.^     Where,  how- 

1  Palmer  v.  Merrill,  6  Cash.  282.  In  this  case,  where  the  sum  insured  was  $1,000, 
a  mcmoninduin  was  indorsed  hy  tlie  life-assured  on  the  policy,  requesting  tiie  insurers 
to  pay  to  tlic  plaintiff,  his  creditor,  the  sum  of  S400,  in  case  of  loss  on  the  same,  and 
afterwards  the  assured,  when  payinj,^  tlie  annual  premium,  exhibited  the  policy  to  the 
insurers,  with  the  indorsement  and  request.  Tiie  ])olicy  remained  in  the  custody  of  the 
life-insured,  and  on  his  decease,  came  into  the  hands  of  his  administrator,  to  whom  the 
company,  notwithstanding  a  previous  demand  of  the  plaintiff,  paid  the  rfmount  insured. 
Tiie  estate  was  insolvent,  and  this  suit  Avas  brought  against  the  administrator,  to 
enforce  an  equitable  lien  on  the  sum  received  by  the  administrator  of  the  office.  The 
court  held  that,  to  sustain  the  plaintiff's  claim,  there  should  have  been  an  assignment 
of  the  entire  sum  due  from  the  insurers,  and  a  manual  tradition  of  the  policy  to  the 
assignee.  Shaiu,  C.  J. :  "  According  to  the  modern  decisions,  courts  of  law  recognize 
the  assignment  of  a  cAo.se  in  action,  so  far  as  to  vest  an  equitable  interest  in  the  assignee, 
and  authorize  Inm  to  bring  an  action  in  the  name  of  an  assignor,  and  recover  a  judg- 
ment for  his  own  benefit.  But,  in  order  to  constitute  such  an  assignment,  two  things 
must  concur ;  first,  tiie  party  holding  the  chose  in  action  must,  by  some  significant  act, 
express  his  intention  that  the  assignee  shall  liave  the  debt  or  right  in  question,  and, 
according  to  the  nature  and  circumstances  of  the  case,  deliver  to  the  assignee,  or  to 
some  person  for  his  use,  the  security,  if  there  be  one,  bond,  deed,  note,  or  written  agi'ce- 
ment,  upon  which  the  debt  or  chose  in  ctclion  arises ;  and,  secondly,  the  transfer  shall  be 
of  the  whole  and  entire  debt  or  obligation,  in  which  the  chose  in  action  .consists,  and,  as 
far  as  practicable,  place  the  assignee  in  the  condition  of  the  assignor,  so  as  to  enable 
the  assignee  to  recover  the  full  debt  due,  and  to  give  a  good  and  valid  discharge  to  the 
party  liable.  The  transfer  of  a  chose  in  action  bears  an  analogy,  in  some  respect,  to  the 
transfer  of  personal  property ;  there  can  be  no  actual  manual  tradition  of  a  chose  in 
action,  as  there  must  be  of  personal  property,  to  constitute  a  lien;  but  there  miffet  be 
,that  which  is  similar,  a  delivery  of  the  note,  certificate,  or  other  document,  if  there  is 
any,  which  constitutes  the  chose  in  action,  to  the  assignee,  with  full  power  to  exercise 
every  species  of  dominion  over  it,  and  a  renunciation  of  any  power  over  it,  on  the  part 
of  the  assignor.  The  intention  is,  as  far  as  the  nature  of  the  case  will  admit,  to  substi- 
tute the  assignee  in  place  of  the  assignor  as  owner.  It  appears  to  us  that  the  order  in- 
dorsed on  this  policy,  and  retained  by  the  assured,  fails  of  amounting  to  an  assignment 
in  both  these  particulars.  We  do  not  question  that  an  assignment  may  be  made  of  an 
entire  fund,  in  the  form  of  an  order  drawn  by  the  owner  on  the  holder  of  the  fund,  or 
party  indebted,  with  authority  to  receive  the  property  or  discharge  the  debt.  But  if  it 
be  for  a  part  only  of  the  fund  or  debt,  it  is  a  draft  or  bill  of  exchange,  which  does  not 
bind  the  drawee,  or  transfer  any  proprietary  or  equitable  interest  in  the  fund,  until  ac- 
cepted by  the  drawee.  It,  therefore,  creates  no  lien  upon  the  fund.  Upon  this  point, 
the  authorities  seem  decisive.  Welch  v.  Mandeville,  1  Wheat.  233,  S.  C.  5  id.  277; 
liobbius  V.  Bacon,  3  Greenl.  349;  Gibson  v.  Cooke,  20  Pick.  15.  It  seems  to  us  quite 
clear,  that  the  plaintiff"  acquired  no  such  interest  in  this  policy,  as  would  enable  liim  to 
maintain  an  action  against  tlie  insurers.  He  seems  himself  to  have  thought  so  too ; 
for,  although  he  demanded  the  amount  of  them,  which  they  refused  to  pay,  for  reasons 
which  seem  to  be  conclusive,  he  yet  declined  bringing  any  suit  against  them,  but  per- 
mitted them  to  pay  the  money  over  to  the  administrator.  If  the  plaintiff'  had  no  such 
legal  or  equitable  interest  in  the  debt  due  on  the  policy,  as  would  enable  him  to  main- 
tain an  action  or  suit  in  equity,  either  in  his  own  name  or  in  the  name  of  the  adminis- 
trator of  the  assignor,  for  his  own  benefit,  it  seems  difficult  to  perceive  on  what  ground 
he  had  any  equitable  lien  on  the  debt  due  by  the  policy ;  and  if  he  had  not,  then  the 
administrator  took  it  as  general  assets,  charged  with  no  trust  for  the  plaintilT.  It  ap- 
pears to  us  that  a  contrary  doctrine  would  tend  to  a  great  confusion  of  riglits.  A  man 
cannot,  by  his  own  act,  charge  a  personal  cliattel,  a  carriage  and  horses,  for  instance, 
wiiii  a  lien  in  favor  of  a  particular  creditor,  and  yet  retain  the  dominion  and  i)Ossession 
of  them  till  his  death;  a  fortiori,  when  he  retains  the  memorandum  or  instrument  of 
transfer  of  such  chattel  in  his  own  possession  and  under  his  own  control.  It  seems  tO' 
us  equally  impracticable  to  charge  a  debt  due  to  him,  by  an  order  or  memorandum, 
retained  in  his  own  possession,  purporting  to  give  to  a  particular  creditor  an  equitable 


en.  XX.]  LIFE  IXSURAXCE.  *         555 

ever,  the  assigniiu'iit  was  by  a  separate  deed,  which  was  duly 
executed  and  delivered,  this  is  an  assignment  of  the  policy,  with- 
out actual  delivery  of  it.^  And  a  mere  verbal  promise  to  assign, 
a  valuable  consideration  being  received  for  the  promise,  has  been 
held  good  as  against  the  insured ;  and,  perhaps,  after  proper 
notice,  against  his  assignee  in  bankruptcy.^ 

This  subject  of  assignment  is  frequently  regulated  by  the  by- 
laws of  the  insurers,  or  by  the  terms  of  the  policy.  Where  it  is 
not,  we  see  no  reason  for  saying  that  the  delictus  personarum 
does  not  apply  as  in  other  kinds  of  insurance;  and  consequently 
the  insurers  are  discharged  if  there  be  an  assignment  without 
their  knowledge  and  consent.  The  cases  however  do  not  settle 
this  question,  and  there  are  opinions  that  life  insurance  is  in  this 
respect  distinguished  from  other  insurance.^ 


SECTION  VI. 

OF   WAKrvAXXy,    KEPRESENTATION   AND   CONCEALMENT. 

The  general  principles  on  this  subject  are  the  same  w'hich  we 
have  already  stated  in  reference  to  other  modes  of  insurance.  In 
life  policies,  however,  the  questions  which  must  be  answered,  are 
so  minute  and  cover  so  much  ground,  that  no  difficulty  often 

lien,  by  the  assignment  of  such  chose  in  action,  without  a  transfer  or  delivery  of  the 
security  by  wliich  it  is  manifested.  Such  an  assignment  would  not  constitute  the 
debtor  himself  a  trustee  to  tlie  creditors ;  what  trust,  then,  devolves  on  the  adminis- 
trator ?  Were  the  law  otherwise,  an  administrator,  instead  of  succeeding  to  the  prop- 
erty and  rights  of  his  intestate,  to  be  administered  and  distributed  equally  amongst  all 
his  creditors,  might  be  obliged  to  dispose  of  it  in  very  unequal  proportions,  according 
to  such  supposed  declai-ation  of  trust.  These  considerations  apply  witli  peculiar  force 
to  a  policy  of  insurance  on  the  life  of  the  assured  himself,  on  which  no  money  can  be- 
come due  until  the  death  of  the  assured,  at  which  time  all  his  rights  devolve  on  his 
personal  representative.  If,  therefore,  it  is  intended  to  supersede  the  right  of  the  per- 
sonal representative,  it  must  be  done  in  the  mode  required  for  a  complete  assignment 
of  the  whole  contract."  It  is  added  in  a  note  to  the  case,  that,  it  having  been  suggested 
in  the  argument  that  other  facts  existed,  not  appearing  in  the  report,  showing  that  the 
assignments  had  been  delivered  to  the  respective  assignees,  at  tlie  time,  notice  thereof 
given  to  the  company,  and  assented  to  by  them,  expressly  or  by  implication,  a  new 
trial  was  granted,  on  which  the  plaintifi's  obtained  verdicts  and  judgments. 

1  Fortescue  v.  Barnett,  3  My.  &  Iveene,  36. 

2  Tibbits  V.  George,  5  Ad.  &  El.  107.  See  Williams  v.  Thorp,  2  Sim.  257;  Gibson 
V.  Overbury,  7  M.  &  W.  557.  It  is  held  in  Louisiana,  that  one  who  has  effected  insur- 
ance on  bis  life,  may  assign  the  policy,  or  a  part  of  it,  to  a  hand  Jide  creditor ;  but  such 
assignment  will  be  without  effect  as  to  third  persons,  creditors  of  the  insured,  where 
there  was  no  proof  of  notice  to  the  assurers  before  the  death  of  the  assured,  nor  of  the 
acceptance  of  the  assignment  by  the  transferrec  before  that  date,  and  the  policy  re- 
mained in  the  possession  of  the  assignor.     Succession  of  Risley,  1 1  Eobinson,  298. 

3  N.  Y.  Lift  Ins,  Co.  v.  Flack,  3  Maryland,  341 .  See  ante,  p"!  553,  n.  1 ;  Ellis  on  Life 
Ins.  152,  153. 


556     *         ELEMENTS  OF  MERCANTILE  LAW.        [CH,  XX. 

arises  except  in  relation  to  the  answers.  One  advisable  precau- 
tion is  for  the  answerer  to  discriminate  carefully  between  what 
he  knows  and  what  he  believes.  If  he  says  simply  "yes"  or 
"  no,"  or  gives  an  equivalent  answer,  this  is  in  most  cases,  at 
once  a  warranty,  and  avoids  the  policy  if  there  be  any  material 
mistake  in  the  reply.  But  if  the  answerer  adds  the  words  "  to 
the  best  of  my  knowledge  and  belief,"  he  warrants  only  the  fact 
of  his  belief,  or,  in  other  words,  nothing  but  his  own  entire 
honesty.^ 

The  cases  which  turn  upon  the  answers  to  the  questions,  are 
very  numerous  ;  but  they  necessarily  rest  upon  the  especial  facts 
of  each  case,  and  hardly  permit  that  general  rules  should  be 
drawn  from  them.  .  Some,  however,  may  be  stated. 

The  first  is,  that  perfect  good  faith  should  be  observed.  The 
want  of  it  taints  a  policy  at  once ;  and  the  presence  of  it  goes 
far  to  protect  one.  Thus  where  the  life-insured  was  beginning  to 
be  insane,  but  was  wholly  unconscious  of  it,  the  policy  was 
not  vitiated  by  the  concealment,  although  two  doctors  in  attend- 
ance upon  him  knew  how  the  case  stood.^ 

There  is  a  warranty,  or  statement,  usually  making  a  part  of 
nearly  all  life  policies;  it  is  that  the  life-insured  is  in  good  health. 
But  this  does  not  mean  perfect  health,  or  freedom  from  all  symp- 
toms or  seeds  of  disease.  It  means  reasonably  good  health  ;  and 
loose  as  this  definition,  or  rule,  may  be,  it  would  be  difficult  to 
give  any  other.^  And  if  a  jury  on  the  whole  are  satisfied  that 
the  constitution  of  one  warranted  to  be  "  in  good  health,"  is  rad- 
ically impaired,  and  the  life  made  unusually  precarious,  there  is 
a  breach  of  the  warranty,  although  no  specific  disease  is  shown 
which  m-ust  have  that  effect.^  On  the  other  hand,  this  warranty 
is  not  broken  by  the  presence  of  a  disease,  if  that  be  one  which 
does  not  usually  tend  to  shorten  life  —  as  dyspepsia  —  unless  it 
were  organic,  or  had  increased  to  that  extreme  degree,  as  to  be, 
of  itself,  dangerous.^ 

1  Stackpole  v.  Simon,  2  Park  on  Ins.  {8th  cd.)  932. 

2  Swete  V.  Fairlie,  6  C.  &  P.  1.  But  insanity,  if  known,  should  be  communicated,  or 
the  policy  will  be  avoided  by  the  concealment.  Lindenau  v.  Desborough,  8  B.  &  C. 
586  ;  S.  C.  3  C.  &  P.  353. 

3  Ross  V.  Bradshaw,  1  W.  Black,  312. 
*  Aveson  v.  Kinniard,  6  East,  188. 

^  Watson  V.  Main  waring,  4  Taunt.  763.  Chamhre,  J.:  "All  disorders  have  more  or 
less  a  tendency  to  shorten  life,  even  the  most  trifling  ;  as  for  instance,  (*rns  may  end 
iu  a  mortification ;  that  is  not  the  meaning  of  the  clause  ;  if  dyspepsia  were  a  disorder 


CH.  XX.]  LIFE   INSURANCE.  567 

Consumption  is  the  disease  which  is  most  feared  in  this  coun- 
try as  well  as  in  England.  And  the  questions  which  relate  to 
the  symptoms  of  it,  as  spitting  of  blood,  cough,  and  the  like,  are 
exceedingly  minute.  But  here  also  there"  must  be  a  reasonable 
construction  of  the  answers.  Thus,  if  spitting  of  blood  be  posi- 
tively denied,  there  is  no  falsification  in  fact,  though  literally 
speaking,  the  life-insured  may  have  spit  blood  many  times,  as 
when  a  tooth  was  drawn,  or  from  some  accident.  The  question 
usually  put  to  the  jury  is,  was  the  party  affected  by  any  of  these 
or  similar  symptoms,  in  such  wise  that  they  indicated  a  disorder 
tending  to  shorten  life.  And  any  symptom  of  this  kind,  however 
slight  —  as  a  drop  or  two  of  blood  having  ever  flowed  from  in- 
flamed or  congested  lungs  —  should  be  stated.' 

that  tended  to  shorten  life  within  this  exception,  the  lives  of  half  the  members  of  the 
profession  would  be  uninsurable."  In  this  case  the  jury  had  found  that  the  dyspepsia 
was  neither  organic  nor  excessive,  and  the  court  refused  to  set  aside  the  verdict  for  the 
plaintiff.  See  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Maryland,  356,  where  it  is  said,  '•  We  can- 
not see  how  a  person  can  be  sound  and  healthy  who  is  predisposed  to  dyspepsia  to  such 
a  degree  as  to  produce  bodily  intirmity."  Where  the  insured  was  troubled  with  spasms 
and  cramps  from  violent  tits' of  the  gout,  but  was  in  as  good  healtli  when  the  policy 
was  underwritten  as  he  had  been  for  a  long  time  before,  and  the  underwriters  had  been 
told  that  he  was  subject  to  the  gout,  Lord  Mansjidd  said :  "  The  imperfection  of  lan- 
guage is  such  that  we  have  not  words  for  every  different  idea ;  and  the  real  intention 
of  parties  must  be  found  out  by  the  subject-matter.  By  the  present  policy,  the  life  is 
warranted,  to  some  of  the  underwriters,  in  health,  to  others  in  good  health  ;  and  yet 
there  was  no  difference  intended  in  point  of  fact.  Such  a  warranty  can  never  mean 
that  a  man  had  not  the  seeds  of  disorder.  We  are  all  born  with  the  seeds  of  mortality 
in  us.  A  man,  subject  to  the  gout,  is  a  life  capable  of  being  insured,  if  he  has  no  sick- 
ness at  the  time   to  make  it  an  unequal  contract.'" 

1  In  Vose  I'.  Eagle  Life  and  Health  Ins.  Co.  6  Cushing,  42,  an  applicant  for  life  in- 
surance answered  an  interrogatory,  whether  he  had  ever  been  afflicted  with  a  pulmonary 
disease,  in  the  negative ;  and  in  answer  to  an  interrogatory,  whether  he  was  then  af- 
flicted with  any  disease  or  disorder  and  what,  stated,  that  he  could  not  say  whether  he 
was  afflicted  with  any  disease  or  disorder,  but  that  he  was  troubled  with  a  general  de- 
bility of  the  system :  and  if  was  proved  that  the  applicant  was  then  in  a  consumption, 
the  symptoms  of  which  had  begun  to  develop  tbemselves  five  months  before,  and 
were  known  to  him ;  but  were  not  disclosed  to  the  insurers,  although  sufficfent  to  in- 
duce a  reasonable  belief  on  the  part  of  the  applicant,  that  he  had  such  a  disease.  It 
was  held  that  whether  these  statements  amounted  to  a  warranty  or  not,  they  were  so 
materially  untrue  as  to  avoid  tlie  policy,  although  the  insured,  at  the  time  of  his  appli- 
cation, did  not  believe  tliat  lie  had  any  pulmonary  disease,  and  the  statement  made  by 
him  was  not  intentionally  false,  but' according  to  his  belief,  true.  According  to  the 
opinion  delivered  in  the  case,  the  proposal  or  declaration  when,  forming  a  part  of  the 
policy  lias  been  held  to  amount  to  a  condition  in  warranty  wliich  must  be  strictly  com- 
plied with  and  upon  the  truth  of  which  whether  a  misstatement  be  intentional^  or  not, 
the  whole  instruments  depends  ;  where  there  is  no  warranty,  an  untrue  allegation  of  a 
material  fact,  or  the  concealment  of  a  material  fact  when  a  general  question  is  put  by 
the  insurers  at  the  time  of  etlecting  the  policy,  which  would  elicit  it,  will  vitiate  the 
policy,  although  such  allegation  or  concealment  be  the  result  of  accident  or  negligence 
and  not  of  design  ;  where  the  agent  for  receiving  the  application  and  forwarding  it  to 
the  directors  of  the  company  at  their  place  of  business,  by  whom  the  contract  and  policy 
are  made  and  signed  on  the  basis  of  the  application,  had  reasonable  cause  to  believe 
that  the  party  was  laboring  under  a  pulmonaiy  disease,  this  does  not  cure  the  effect  of 
the  untrue  statement.     Geach  v.  Ingall,  14  M.  &  W.  95.    In  this  case  the  life-assured 

47* 


r)o8  ELEMENTS   OF  MERCANTILE   LAW.  [cil.  XX. 

The  iiisnrors  always  ask  who  is  the  physician  of  the  life-iu- 
snrcd,  tliat  they  may  make  inquiries  of  him  if  they  see  fit.     And 

stated  in  his  declaration,  that  he  was  at  tliat  time  in  good  health,  and  not  aftiicted  with 
any  disorder,  nor  addicted  to  any  hahit,  tindinj^  to  shorten  life;  that  he  had  not  any 
time  had  among  other  things  any  sjiitting  of  blood,  consumptive  symptoms,  asthma, 
cou'di,  or  other  affection  of  the  lungs.  One  of  the  terms  of  the  policy  was  that  it 
should  he  void  if  anything  stated  hy  tlic  assured  in  the  declaration  should  be  untrue. 
The  defendants'  witnesses  proved  that  about  four  years  before  the  policy  was  effected, 
tlie  assured  had  spit  blood,  and  had  subsequently  exhibited  other  symptoms  usual  in 
consumptive  suhjects;  and  it  appeared  that  he  died  of  consumption  in  the  year  1843. 
The  Lord  Chief  Justice  told  the  jury  that  it  was  for  them  to  say  whether  at  the  time  of 
his  making  the  statement  set  forth  in  the  declaration,  the  assured  had  such  a  spitting 
of  blood,  and  such  affection  of  the  lungs  and  inflammatory  cough,  and  such  a  disorder 
as  would  have  a  tendency  to  shorten  his  life.  This  was  held  a  misdirection,  for 
although  the  mere  fact  of  the  assured  having  spit  blood  would  not  vitiate  tlie  policy, 
the  assured  was  bound  to  have  stated  that  fact  to  the  insurance  company  in  order  that 
they  might  make  inquiry  whether  it  was  the  result  of  the  disease  called  spitting  of  blood. 
Aldcrson,  B.  :  "  Then  as  to  the  misdirection,  my  Lord  Denman  certainly  does  not  ap- 
pear to  have  sufficiently  called  the  attention  of  the  jury  to  the  distinction  between 
those  disorders,  respecting  the  existence  of  which,  at  the  time  of  executing  the  policy, 
the  assured  was  called  on  to  make  a  specific  declaration,  and  those  which  might  have 
formerly  existed.  By  '  spitting  of  blood  '  must,  no  doubt,  be  understood  a  spitting  of 
blood  as  a  symptom  tending  to  shorten  life ;  the  mere  fact  is  nothing.  A  man  cannot 
have  a  tooth  pulled  out  without  spitting  blood.  But,  on  the  other  hand,  if  a  person 
has  an  habitual  spitting  of  blood,  although  he  cannot  fix  the  particular  part  of  his 
frame  whence  it  proceeds,  still  as  this  shows  a  weakness  of  some  organ  which  contains 
blood,  he  ought  to  communicate  the  fact  to  the  insurance  company,  for  no  one  can 
doubt  that  it  would  most  materially  assist  them  in  deciding  whether  they  should  exe- 
cute the  policy  ;  and  good  faith  ought  to  be  kept  with  them.  So  if  he  had  had  spitting  of 
blood  only  once,  but  that  once  was  the  result  of  the  disease  called  spitting  of  blood,  he 
ought  to  state  it,  and  his  not  doing  so  would  probably  avoid  the  policy.  Again,  sup- 
pose this  man  had  an  inflammation  of  the  lungs,  wJiich  had  been  cured  by  bleeding, 
many  physicians  would  perhaps  say,  that  it  was  an  inflammation  of  the  lungs  of  so 
mitigated  a  nature  as  not  to  tend  to  shorten  life  ;  still  that  would  be  no  answer  to  the  case 
of  the  defendants,  for  it  is  clear  that  the  company  intended  that  the  fact  should  be 
mentioned.  As  to  the  word  '  cough,'  it  must  be  understood  as  a  cough  proceeding 
from  the  lungs,  or  no  one  could  ever  insure  his  life  at  all ;  and  indeed  it  is  so  expressed 
in  the  policy  — '  Cough  or  other  affection  of  the  lungs.'  Again,  it  is  obvious  that  the 
insurance  company  meant  to  guard  against  the  disease  of  dysentery.  Now,  a  man  may 
have  had  the  dysentery,  and  been  cured  of  it,  still  the  office  should  know  of  it;  and, 
indeed,  that  disorder  may  have  been  mentioned  by  name,  as  being  one  of  a  nature  likely 
to  return.  All  these  instances  show  that  it  was  iTot  intended  to  restrict  the  statement  of 
the  assured  to  disorders  having  a  tendency  to  shorten  life  at  the  moment  of  executing 
the  policy';  what  the  company  demanded  was,  a  security  against  the  existence  of  such 
diseases  in  the  frame.  There  must,  therefore,  be  a  new  trial."  Kolfe,  B. :  "I  have  no 
doubt,  that,  if  a  man  had  spit  blood  from  his  lungs,  no  matter  in  how  small  a  quantity,  or 
oven  had  spit  blood  from  an  ulcerated  sore  throat,  he  would  be  bound  to  state  it.  The 
fact  should  be  made  known  to  the  office,  in  order  that  their  medical  adviser  might  make 
inquiry  into  its  cause."  In  Anderson  v.  Fitzgerald,, 24  Eng.  Law  &  Eq.  1,  determined 
finally  by  the  House  of  .Lords,  the  assured  proposed  his  life  for  insurance,  and  signed  a 
"proposal,"  which  contained  his  answers  to  twenty-seven  questions,  the  twenty-first  and 
twenty-second  of  which  were  as  follows  :  "21.  Did  any  of  tlie  party's  near  relations  die 
of  consumption,  or  any  other  pulmonary  complaint  ?  Answer.  No.  22.  Has  the 
party's  life  been  accepted  or  refused  at  any  office,  &c.  Answer.  No."  The  proposal 
also  contained  the  following  agreement:  "I  hereby  agree  that  the  particulars  men- 
tioned n\  the  above  proposal,  shall  form  the  basis  of  the  contract  between  the  assured 
and  the  company ;  and  if  there  be  any  fraudulent  concealment  or  untrue  allegation 
contained  therein,  or  any  circumstance  material  to  this  insurance  shall  not  have  been 
fully  communicated  to  the  said  company,  or  there  shall  be  any  fraud  or  misstatement, 
all  money  which  shall  have  been  paid  on  account  of  this  insurance,  shall  become  for- 
feited and  the  policy  be  void."     The  policy  contained  a  warranty  on  the  part  of  the 


en.  XX.]  LIFE  INSURANCE.  559 

this  question  must  be  answered  fully  and  accurately.  It  is  not 
enough  to  give  the  name  of  the  usual  attendant ;  but  every  phy- 
sician really  consulted  should  be  named,  and  every  one  consulted 
as  a  physician,  although  he  is  an  irregular  practitioner,  or  quack.^ 
If  the  warranty  be  that  the  life-insured  is  a  person  of  sober 
and  temperate  habits,  it  has  been  held,  that  the  jury  are  not  to 
inquire  whether  his  habits  of  drinking  —  if  they  are  proved  — 
are  such  as  might  injure  his  health  ;  because  the  insurers  have  a 
right  to  say  that  they  will  insure  only  those  who  are  temperate.^ 
But  it  might  be  answered  that  although  the  insurers  have  this 
right,  and  there  may  be  good  reasons  why  this  should  be  the 
general  practice,  yet  unless  they  use  the  word  "  abstinence"  or 

assured  as  to  most  of  the  facts  replied  to  in  tlie  proposal,  but  those  as  to  questions  21 
and  22  were  omitted  therein.  It  then  provided  that  the  policy  should  be  null  and  void, 
and  all  moneys  paid  by  the  assured  forfeited,  upon  his  dying,  in  certain  enumerated 
modes,  or  if  any  thing  so  warranted  as  aforesaid  shall  not  be  true,  or  if  any  circum- 
stance material  to  this  insurance  shall  not  have  been  truly  stated,  or  shall  liave  been 
misrepresented  or  concealed  or  shall  not  have  been  fully  and  fairly  disclosed  and  com- 
municated to  tlie  said  company,  or  if  any  fraud  shall  have  been  practised  upon  the  said 
company,  or  any  false  statement  made  to  them  in  or  about  the  obtaining  or  effecting  of 
this  insurance.  The  answers  to  questions  21  and  22  were  proved  to  be  untrue.  It  was 
held  by  the  House  of  Lords,  reversing  the  decisions  of  the  Courts  of  Exchequer  and 
Exchequer  Chamber  in  Ireland,  that  the  judge  was  wrong  in  directing  the  jury,  that  if 
they  found  the  statements  botii  false  and  material,  they  should  find  the  verdict  for  the 
defendant ;  and  that  the  question  which  the  judge  ought  to  have  left  to  the  jury  were, 
first,  were  the  statements  false,  and  secondly,  were  they  made  in  obtaining  or  effecting 
the  policy.  The  ground  of  the  decision  was  that  the  insurers  had  stipulated  that  the 
policy  should  be  void  unless  the  assured  should  answer  certain  questions  correctl_y,  and 
thereby  excluded  the  question  of  materiality.  Lord  St.  Leonards,  in  opposition  to  Baron 
Parke  and  Lord  Brougham,  thought  the  word,  "false  statement,"  in  the  connection, 
meant  a  statement  untrue  within  the  knowledge  of  the  paity  making  it,  and  not  merely 
one  which  was  in  fact  untrue, —  but  on  the  ground  that  a  circumstance  material  to  the 
insurance  had  not  been  truly  stated,  concurred  in  the  motion.  See  Duckett  v.  Wil- 
liams, 2  Cr.  &  M.  348  ;  S.  C.  4  Tyrwh.  240.  In  this  case  it  was  agreed  in  the  declara- 
tion signed  by  the  assured  previous  to  effecting  the  policy  that  if  any  untrue  averment 
was  contained  therein  or  if  the  facts  required  to  be  set  forth  in  the  proposal  annexed 
were  not  truly  stated,  the  premiums  should  be  forfeited'  and  the  assurance  absolutely 
null  and  void.  The  statement  as  to  the  health  of  the  life,  was  untrue  in  point  of  fact 
but  not  to  the  knowledge  of  the  party  making  it.  It  was  held,  that  the  want  of  know- 
ledge was  immaterial,  and  the  premiums  were  forfeited.  It  being  provided  in  tlie  con- 
ditions of  insurance  that  any  untrue  or  fraudulent  allegation  made  in  effecting  the 
insurance  will  render  the  policy  void,  it  was  held  that  the  representation  by  the  insured 
that  he  was  a  farmer,  whereas  he  was  at  the  time  a  slave-taker  by  occupation,  rendered 
the  policy  void,  and  it  is  not  material  that  his  death  was  not  occasioned  by  his  business 
of  slave-taking.     Hartman  v.  Keystone  Insurance  Co.  21  Penn.  State,  466,  476. 

1  IMorrison  v.  Sluspratt,  4  Bing.  60 ;  Everett  v.  Desborough,  5  id.  503 ;  Lindenau  v. 
Desborough,  8  B.  &  C.  586  ;  Huckman  v.  Fernie,  3  M.  &  W.  505.  Wliere  A  insures 
the  life  of  a  third  person,  he  is  bound  by  the  misrepresentations  of  the  life-assured 
although  himself  ignorant  that  they  were  false.  Maynard  i'.  Rhodes,  5  Dow.  &  Ry.  266 ; 
S.  C.  1  C.  &  P.  360.  But  he  is  not  bound  by  the  concealment  of  facts  by  the  life- 
assured,  of  which  he  himself  is  ignorant,  which  are  not  called  for  by  a,  general  or 
particular  question,  unless  the  life-assured  is  his  general  agent  to  effect  the  policy. 
Huckman  v. 'Fernie,  3  M.  &  W.  5()5.  So  if  the  third  person  is  himself  unconscious  of 
concealing  facts.     Swete  v.  Fairlie,  6  C.  «&  P.  1. 

-Southcombe  v.  Merriman,  Car.  &  Marsh,  286. 


500  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XX. 

something  equivalent,  they  have  no  right  to  say  that  any  one  is 
not  "  tennpcrate,"  who  does  not  drink  enough  to  affect  his  health  ; 
for  certainly  all  "intemperance"  does  this. 

An  answer,  "  not  subject  to  fits,"  is  not  necessarily  falsified  by 
the  fact  that  the  life-insured  has  had  one  or  more  fits.  But  if 
the  question  had  been  "  have  you  ever  had  fits,"  then  any  fit  of 
any  kind,  and  however  long  before,  must  be  stated.^ 

In  general,  as  there  is  always  a  general  question  as  to  any 
facts  affecting  health  not  particularly  inquired  of,  a  concealment 
of  such  a  fact  goes  to  a  jury,  who  are  to  judge  whether  the  fact 
was  material,  and  whether  the  concealment  were  honest.-  As 
when  a  life-insured  was  a  prisoner  for  debt,  and  so  without  the 
benefit  of  air  and  recreation ;  ^  and  where  a  woman  whose  life 
was  insured,  had  become  the  mother  of  a  child  under  disgraceful 
circumstances,  these  facts  were  submitted  to  a  jury.* 

If  the  policy  and  the  papers  annexed  or  connected,  put, no  lim- 
its on  the  location  of  the  life-insured,  he  may  go  where  he  will. 
But  if,  when  applying  for  insurance,  he  intends  going  to  a  place 
of  peculiar  danger,  and  this  intention  is  wholly  withheld,  it  would 
be  a  fraudulent  concealment.^ 

If  facts  be  erroneously  but  honestly  misrepresented,  and  the  in- 
surers, when  making  the  policy,  knew  the  truth,  the  error  does 
not  effect  the  policy.^  Nor  does  the  non-statement  of  a  fact 
which  diminishes  the  risk;  or  concerning  which  there  is  an 
express  warranty." 

If  upon  a  proposal  for  a  life  insurance  and  an  agreement 
thereon,  a  policy  be  drawn  up  by  the  insurers,  and  presented  to 
the  insured  and  accepted  by  them,  which  differs  from  the  terms 
of  the  agreement,  and  varies  the  rights  of  the  parties  concerned, 
equity  will  interfere  and  deal  with  the  case  on  the  footing  of  this 
agreement  and  not  of  the  policy  ;  unless  it  seems,  from  the  evi- 
dence and  circumstances,  that  it  was  intended  by  the  insurers  to 

1  Chattock  r.  Shawc,  1  Mood.  &  Rob.  498. 

-  Liudenau  v.  Desbovough,  3  C.  &  P.  35.3  ;  S.  C.  8  B.  &  C.  586 ;  Morrison  v.  Mus- 
pratt,  4  Bing.  GO  j  Everett  v.  Desborough,  5  id.  503  ;  Dalglish  v.  Jarvic,  2  JIac.  & 
Gordon,  243. 

^  Hui;uenin  v.  Raj-ley,  6  Taunt.  186. 

"  Edwards  v.  Barron,  Ellis,  116. 

5  Lord  i\  Dall,  12  Mass.  119. 

•^  Carter  v.  Boelini,  3  Burr,  1910. 

''  Haywood  v.  Rodgers,  4  East,  590.  Anderson  r.  Fitzgerald,  24  Eng.  Law  &  Eq.  G, 
Parke,  B. 


en.  XX.]  LIFE   INSURANCE.  561 

vary  the  agreement,  and  propose  a  difl'ercnt  policy  to  the  insured, 
and  this  was  understood  by  the  insured,  and  the  policy  so  ac- 
cepted.^ 

SECTION :  VII. 

INSURANCE   AGAIXST   DISEASE   AND   AGAINST    DISHONESTY   OF   SERVANTS. 

Of  late  years  both  of  these  forms  of  insurance  have  come  into 
practice  ;  but  not  so  long  or  so  extensively  as  to  require  that  we 
should  speak  of  them  at  length.  In  general,  it  must  be  true,  the 
principles  already  stated  as  those  of  insurance  against  marine 
peril,  or  fire,  or  death,  must  apply  to  these  other  —  and  indeed  to 
all  other  —  forms  of  insurance,  excepting  so  far  as  they  may  be 
qualified  by  the  nature  of  the  contract. 

From  one  interesting  case  which  has  occurred  in  England,  it 
seems  that  when  an  application  was  made  for  insurance,  or 
guaranty,  against  the  fraud  or  misconduct  of  an  agent,  questions 
are  proposed,  as  we  should  expect,  which  are  calculated  to  call 
forth  all  the  various  facts  illustrative  of  the  character  of  the  agent ; 
and  all  which  could  assist  in  estirriating  the  probability  of  his 
fidelity  and  discretion.  But  a  declaration  of  the  applicant  as  to 
the  course  or  conduct  he  was  to  pursue,  was  distinguished  from 
a  warranty.  He  may  recover  on  the  policy,  although  he  changes 
his  course,  provided  the  declaration  was  honest  when  made,  and 
the  change  of  conduct  was  also  in  good  faith.  In  this  case  the 
application  Was  for  insurance  of  the  fidelity  of  the  secretary  of 
an  institution.  There  was  a  question  as  to  when,  and  how 
often  the  accounts  of  the  secretary  would  be  balanced  and 
closed  ;  and  the  applicant  answered  that  these  accounts  would 
be  examined  by  the  financial  committee  once  a  fortnight.  A 
loss  ensued  from  the  dishonesty  of  the  secretary ;  and  it  appeared 
to  have  been  made  possible  by  the  neglect  of  the  committee  or 
the  directors  to  examine  his  accounts  in  the  manner  stated  in 
the  policy.  But  the  insurers  were  held  on  the  ground  that  there 
was  .no  warranty .2  , 

1  Collctt  V.  Morrison,  12  Eng.Law  &  Eq.  171  ;  S.  C.  9  Have,  162. 
-  BeTiham  v.  United  Guarantee  and  Life  Insurance  Co.  14  Eng.  Law  &  Eq.  524  ;  S. 
C.  7  Exch.  744.     See,  also,  Bunyon  ou  Life  Insurance,  chapter  6. 


INDEX. 


A. 
ABANDONMENT, 

necessity  of,  463. 

right  of,  464. 

revocation  of,  467.  • 

(See  JMarine  Insukance.) 
ACCEPTANCE, 

of  a  tiling  sold,  75. 

of  a  bill  or  note,  103-105,  128-133. 

of  a  proposition,  17-20. 
ACCEPTOR, 

rights  and  duties  of,  lg8-131. 

(See  Negotiable  Paper.) 
ACCOMMODATION  BILLS  AND  NOTES, 

rights  and  liabilities  of  parties  to  it,  98. 

of,  when  given  by  bankrupt,  291. 
ACCOUNTS. 

(See  Limitations.) 

ADJUSTMENT. 

(See  General  Average,  Marine  and  Fire  Insurance.) 
ADmRALTY. 

(See  Shipping.) 

AGENCY,  134-163. 

Of  agency  in  general^  134,  135. 
what  is  and  who  may  be  an  agent,  134,  174. 

when  is  a  person  responsible  for  the  acts  of  another,  as  his  agent,  134. 
of  a  general  and  particular  agent,  135. 
when  they  transcend  their  authority,  135. 
How  autlwrity  may  he  given  to  an  agent,  136-14U. 

may  be  given  to  wife,  son,  or  servant  by  implication,  137, 
may  be  given  by  ratification  or  acquiescence,  137. 
what  acts  cannot  be  ratified,  138. 
when  ratification  must  take  place,  138. 


564  INDEX. 

AGEKCY,  continued. 

distinction  between  a  factor  and  broker,  138. 

of  a  cashier  of  a  bank,  139. 

of  a  general  agent  of  a  corporation,  140. 
Extent  and  duration  of  authoriti/,  140-144. 

notice  of  revocation  must  l)e  given,  140. 

when  agent  has  a  right  to  sell  on  credit,  141. 

consequence  of  blending  goods,  141. 

definition  of  a  general  authority  to  sell  or  transact  business,  141,  and  n. 
(6,)  142. 

when  an  agent's  act  is  a  fraud  of  the  principal,  143. 

when  withdrawal  of  authority  does  not  take  effect,  143. 

when  and  how  revocation  may  be  made,  143. 

of  a  collecting  agent,  144. 

when  a  bank  is  liable  as  an  agent,  144,  and  n.  (4.) 

when  can  the  power  of  an  agent  be  extended,  144. 
Of  the  execution  of  authorilij,  145,  146. 

with  what  strictness  agent  must  conform  to  the  authority  given,  145. 

when  power  given  to  two  can  be  executed  by  one,  146. 

•when  notice  to  one  of  a  number  of  agents  is  sufficient,  146. 

extent  of  an  agent's  or  broker's  power,  146. 
Liability  of  an  agent,  147,  148. 

liable  by  express  agreement,  147. 

liable  when  he  exceeds  or  in  any  way  departs  from  his  authority,  147. 

of  personal  liability,  147. 

when  should  be  sued  by  action  on  the  (^se,  147. 
nights  of  action  growing  out  of  agency,  148-151. 

principal  may  affirm  or  disaffirm  an  act  done  without  authority,  148. 

when  an  undisclosed  principal  may  sue  a  party  trading  with  his  agent, 
148. 

whether  knowledge  of  principal  is  knowledge  of  agent  and  vice  versa, 
149. 

of  a  notice  to  an  officer  or  member  of  a  corporation,  149,  and  n.  (6.) 

when  agent  may  be  sued  for  money  received  for  one  who  is  apparently 
his  principal,  150. 

when  principal  may  sue  third  party  for  an  injury,  151. 

when  and  for  what  principal  or  agent  may  sue  third  party,  151. 

power  of  an  agent  to  dispose  of  negotiable  paper,  151. 
How  a  jrrincipal  is  affected  hy  the  acts  of  his  agent,  152-154. 

when  principal  responsible  for  fraudulent  representations  of  his  agent, 
152. 

principal  can  take  no  advantage  of  agent's  wrongful  acts,  152. 

when  payment  made  to  an  agent  binds  the  principal,  152. 

payment  to  a  sub-agent  binds  whom,  153. 

agent  cannot  pay  his  own  debts  with  principal's  money  without  au- 
thority, 153,  and  n.  (4.) 

when  principal  liable  for  agent's  fraudulent  or  criminal  acts,  154. 


INDEX.  565 

AGENCY,  continued 

Mutual  rights  and  duties  of  principal  and  agent,  154-158. 
agent  is  liable  for  any  departure  from  liis  instructions,  15-1. 
instructions  determined  by  usages  and  customs,  154. 
of  principal's  right  to  accept  or  renounce  agent's  contracts,  155. 
when  agent  is  entitled  to  indemnity  from  bis  principal,  155. 
agent  cannot  appoint  a  sub-agent,  155,  and  n.  (7.) 
for  what  care  and  skill  an  agent  is  responsible,  whether  he  receives 

compensation  or  not,  156. 
rights  of  principal  when   his  agent   embezzles,  or  blends  his  goods. 

156. 
agent  employed  to  sell  cannot  buy,  157. 
duty  of  agent  to  keep  an  exact  account,  157. 
when  the  law  presumes  an  account  of  agent  settled,  157. 
what  interest  principal  may  charge  agent  for  money  kept,  158,  260. 
when  agent  liable  for  acts  done  after  revocation,  158. 
when  agent  liable  for  not  performing  what  he  agreed,  158. 
Of  factors  and  brokers,  158-163. 
of  a  del  credere  commission  or  commission  merchants,  158. 
how  far  a  factor  is  a  guarantor  of  the  payment  of  money  due  to  his 

principal,  159. 
when  factor  may  pledge  principal's  goods,  159. 
what  discretion  a  factor  has  in  the  performance  of  his  duties,  IQfi. 
liability  of  an  ordinary  factor  in  taking  a  note  for  goods  sold,  160. 
what,  if  principal  and  factor  have  a  claim  against  the  same  debt  of  a 

purchaser,  161. 
factor  can  use  his  own  name,  has  a  lien  on  goods,  &c.,  broker  has  not, 

161. 
broker  may  act  for  both  parties,  factor  for  one  only,  161. 
of  their  right  to  receive  payment,  161. 
when  they  can  receive  their  commissions,  162. 
of  principal's  right  to  revoke  the  authority  of  factor,  162. 
distinction  between  foreign  and  domestic  factor,  162. 
foreign  factor  is  a  principal  as  to  third  parties,  162. 
for  what  factors  are  liable,  163. 
AGREEMENT  AND  ASSENT, 

Of  the  legal  meaning  of  agreement,  14-16. 
must  be  a  meeting  of  minds  about  the  same  thing,  14,  and  note, 
construction  of  a  contract,  15. 

mistake  by  one  or  both  parties  may  avoid  the  contract,  15. 
mutual  mistakes  may  be  corrected,  16. 
but  not  mistakes  of  law,  16. 
fraud  annuls  all  contracts,  16. 
miat  is  an  assent,  17. 
must  be  mutually  obligatory  and  unconditional,  1 7. 
mere  voluntary  compliance  with  the  proposed  terms  of  a  contract,  make 
it  obligatory,  1 7. 

48 


566  '  INDEX. 

AGREEMENT  AND  ASSENT,  continued. 
Of  offers  giving  time,  18. 

continuing  offers,  18,  and  notes. 

may  be  -withdrawn  at  any  time  before  acceptance,  18. 
Of  a  largcdn  hy  correspondence,  19-21. 

how  such  an  offer  may  be  withdrawn,  19. 

when  the  letter  of  acceptance  completes  the  bargain,  20. 

may  be  withdrawn  by  any  legal  means,  21. 
Wliat  evidence  may  he  received  in  reference  to  a  uuitten  contract,  21-24. 

any  evidence  explanatory  of  a  written  contract  is  admissible,  21. 

parol  evidence,  admissible  to  explain,  but  not  to  vary  or  contradict  the 
terms  of  a  written  instrument,  21. 

why  the  law  prefers  written  to  oral  evidence,  21,  n.  (1.) 

definition  of  explanatory  evidence,  22,  and  notes. 

extrinsic  evidence  admissible  to  explain  or  even  to  contradict  a  written 
receipt,  23. 

evidence  is  not  admissible  to  rebut  a  legal  inference  from  written  con- 
tract, 23. 

but  it  is  admissible  to  supply  an  omission  not  inconsistent  with  what  is 
written,  23. 

of  the  interpretation  of  written  contracts  by  interested  third  parties,  24. 

rule  of  construction,  24. 

when  parties  are  remitted  to  their  original  rights  from  the  uncertainty 

of  a  written  instrument,  24. 

ALIENATION. 

(See  Fire  Insurance.) 

ALTERATION. 
ANNUITIES. 


ARREST,  450,  451. 
ASSENT, 

ASSIGNEE, 


(See  FiKE  Insurance.) 
(See  Bankruptcy,  289.) 

(See  Agreement.) 
(See  Bankruptcy,  296.) 


ASSIGNMENT, 

voluntary,  276,  307. 

with  preferences,  275,  276,  280. 

in  insolvency,  286. 

(See  Bankruptcy.) 
conflict  of  laws, 

(See  Bankruptcy.) 

preference  of  creditors, 

(See  Bankruptcy.) 
of  policy,  407,  531,  552-555. 
AVERAGE, 

particular,  483. 


INDEX..  567 


AVERAGE,  continued. 
general, 

(See  SiiipnxG  and  Marine  Insurance.) 


B. 

BANKRUPTCY  AND  INSOLVENCY. 

Of  the  Jiistory  of  the  Law  (f  Banknqitcy,  270-273. 

derivation  of  the  term,  270. 

arrest  of  debtors,  under  the  English  common  law,  270,  271. 

criminality  the  early  foundation  of  bankruptcy,  271. 

change  in  this  latter  respect,  271. 

provision  of  Constitution  of  United  States  and  laws  passed  under  it, 
271,  272. 

extent  of  relief  afforded  by  them,  272. 

state  laws  on  this  subject,  272,  273-275. ' 
Of  the  difference  helween  hanlcriq)lcy  and  insolvency,  273-278. 

English  statutes  of  bankruptcy  and  insolvency,  273,  274. 

American  statutes  on  these  subjects,  274,  275. 

preference  of  creditors  allowed  at  common  law,  275,  276-280. 

voluntary  assignments,  276-307. 

forbidden  by  statutes,  276,  277. 
The  tribunal  and  Jurisdiciion,  278-283. 

in  the  United  States,  the  District  Court,  278. 

in  the  States,  commissioners  of  insolvency,  278. 

right  to  jury,  in  disputed  cases,  278. 

manner  of  initiating  proceedings,  278,  279. 

examination  of  debtor,  279. 

debtor  excused  from  answering,  if  his  answer  could  expose  him  to  pun- 
ishment for  crime,  279. 

power  to  compel  answer,  280. 

preference  of  creditors  forbidden  by  insolvent  laws,  280. 

manner  of  enforcing  the  prohibition,  280,  281. 

assignments  in  contemplation  of  bankruptcy,  281,  and  n. 

time  prior  to  which  assignments  made  are  valid,  unless  fraud  in  assignee, 
281,  and  n.  (2.) 

day  on  which  petition  filed  to  be  excluded,  282. 

fraction  of  day  admitted,  282,  and  n. 

question  of  fraudulent  preference  one  of  mixed  law  and  fact,  282,  283. 

transaction  may  be  fraudulent,  though  money  paid,  283. 

right  to  stop  in  transitu,  283,  and  n. 
Who  may  be  insolvent,  283-287. 

provision  made  by  statute,  283,  and  n.  (3.) 

English  statutes  of  bankruptcy  confined  to  traders,  284. 

who  are  traders,  284,  n. 

insolvent  laws  not  so  confined,  285. 


568  INDEX. 

BANKPtUrTCY  AND  INSOLVENCY,  continued. 

in  England,  feme  sole,  unless  sole  trader  could  not  be  a  bankrupt,  285. 

here,  she  may  be  insolvent,  285,  and  n.  (3.) 

infant  cannot  be  bankrupt,  285; 

but  may  be  insolvent  on  his  own  petition,  285,  286. 

infant  like  other  debtor,  unless  his  debt  is  avoided,  286. 

lunatic,  while  insane,  could  incur  no  debt  but  for  necessaries,  286,  and  n. 

he  could  be  insolvent  for  that,  286. 

could  be  declared  insolvent  on  petition  of  guardian,  286. 

assignment  for  TDcnefit  of  creditors  where  there  is  a  bankrupt  law,  an 
act  of  bankruptcy,  286. 

this  is  so,  if  no  intention  to  defraud,  even  if  provided  that  effects  be  dis- 
tributed according  to  bankrupt  law,  286,  287. 

but  in  this  country,  this  is  so  only  when  statutes  expressly  or  impliedly 
supersede  assignments,  287,  and  n. 
Proof  of  debts,  287-294. 

in  general,  all  persons  having  claims  may  prove,  287. 

proof  made  by  oath  of  creditor,  287. 

if  further  proof  necessary,  by  admissible  evidence,  287,  n.  (2.) 

proof  may  be  by  agent  or  attorney,  287. 

in  case  of  corporation,  can  only  be  by  agent,  287. 

agent  of  corporation  should  be  specially  appointed,  287,  and  n. 

cestuis  que  trust  should  join  in  proof  with  trustees  in  proof,  287,  and  n. 
(4,)  288. 

but  not  if  cestui  que  trust  is  an  infant  or  lunatic,  288. 

if  creditor  bankrupt,  assignee  may  prove,  but  in  general  practice  credi- 
tor's oath  required,  288. 

same  rule  applies  when  assignor  not  a  bankrupt,  288. 

assignor  and  assignee  should  join,  288. 

if  bankrupt  is  a  trustee,  he  may  so  far  prove  against  his  own  estate,  288. 

in  such  case,  the  money  should  be  deposited  or  paid  into  court,  288, 
n.  (4.) 

debts  not  yet  payable  may  be  proved,  289,  and  n.  (1.) 

interest  on  claims,  how  cast,  289. 

interest  in  some  cases,  with  annual  rests,  289. 

persons  having  annuities  may  come  in  and  prove,  289. 

wife  in  some  instances  permitted  to  prove  against  her  husband,  289,  and 
n.  (4.) 

assignees  may  make  any  defence  which  bankrupt  could,  289,  290. 
may  make  some  which  he  could  not,  290. 

claim  for  damages  for  tort  may  be  rejected,  290. 

but  if  judgment  has  been  previously  recovered,  it  may  be  proved,  290, 
and  n.  (2.) 

statute  provisions  for  claims  for  goods  or  chattels  may  be  fully  obtained, 
290. 

contingent  claim  may  be  proved,  290,  291. 

but  not  to  be  paid  unless  the  contingency  happen,  291,  and  n.  (1.) 


INDEX.  569 

BANKRUPTCY  AND  INSOLVENCY,  continued. 

accommodation  paper,  pjiven  by  bankrupt,  cannot  be  paid,  291. 
accommodation  paper  will  not  pass  to  assignees  as  part  of  bankrupt  in 

estate,  291,  and  n.  (2.) 
exchanged  notes  governed  by  tlie  same  principle,  291,  292. 
but  if  either  note  transferred,  principle  would  cease  to  apply,  292. 
at  common  law,  surety  has  no  claim  against  principal  till  payment,  292. 
in  insolvency,  the  surety  may  prove  for  the  amount  for  which  he  is 

surety,  292. 
no  dividend  paid  him  except  on  the  sura  he  actully  pays,  292,  and  n.  (2.) 
right  of  surety  in  proving,  limited,  293. 
can  prove  only  when  debt  exists,  though  it  be  not  payable,  293,  and 

n.(l.) 
surety  cannot  compel  creditor  to  come  in  and  prove,  69,  294. 
pays  the  debts  and  is  subrogated  to  the  creditor's  rights,  294. 
if  the  creditor  refuse  payment,  and  to  prove  his  debt,  this  would  be 

negligence  or  fraud,  and  the  surety  would  be  discharged,  294. 
Creditors  with  security,  294,  295. 
creditor  may  prove  balance,  after  deducting  value  of  security,  294. 
this  value  ascertained  by  selling  or  appraisement,  294. 
if  he  has  liens,  must  make  them  available,  by  reducing  his  debt  or  by 

surrendering  them  to  assignees,  294,  and  n.  (3.)     • 
provision  of  United  States  Act  of  1841,  with  relation  to  liens,  294. 
diversity  of  state  laws  on  the  subject,  294,  295. 
action  commenced  a  lien  in  some,  295,  and  n.  (1.) 
no  lien  till  property  attached  in  othci'S,  295,  and  n.  (2.) 
lien  by  judgment,  295,  and  n.  (3.) 
conflict  of  laws  on  matter  of  lien,  295,  and  n.  (4.) 
Of  the  assignee,  296-302. 
usually  chosen  by  creditors,  296. 
a  majority  requisite,  296. 

if  creditors  fail  to  appoint,  commissioners  may,  296. 
assignees  must  signify  assent,  296. 

by  statute,  power  of  appointment  may  be  vested  in  court,  296,  n.  (I.) 
no  person  interested  in  bankrupt's  estate  should  be  appointed,  296, 

n.(l.) 
nor  who  has  an  interest  hostile  to  the  creditors,  296,  n.  (1.) 
new  choice  may  be  ordered  if  large  proportion  of  creditors  absent,  296, 

n.  (1.) 
court  may  remove  in  case  of  incompetency  or  fraud  in  appointment, 

296,  n.  (1.) 
go  if  assignee  remove  from  the  State,  296,  n.  (1.) 
assignee  to  act  as  trustee,  297,  298. 
his  duty  to  ascertain  the  regularity  of  proceedings,  298. 
to  take  possession  of  assets,  298. 
to  collect  outstanding  assets,  298. 
not  liable  for  loss  without  blamable  negligence,  298,  n.  (1.) 
48* 


570  INDEX. 

BANKllUPTCY  AND  INSOLVENCY,  continued. 

may  refuse  assets  which  ai'e  worthless,  298,  n.  (2,)  300, 

if  he  accepts  lien,  liable  for  covenants  in  it,  298,  n.  (2.) 

must  take  due  care  of  property  collected,  298,  299, 

cannot  buy  property  of  insolvent,  299. 

may  compound  debts,  299, 

should  deposit  moneys  In  bank,  299. 

may  redeem  mortgages,  299, 

may  transfer  notes  by  indorsement,  299,  n.  (4.) 

in  ordinary  duties  liable  for  ordinary  care,  299,  300, 

in  others  should  take  advice  of  court,  300. 

subject  to  same  equities  as  Insolvent,  300,  n.  (1.) 

may  sue  in  his  own  name  even  on  covenants,  300. 

all  the  assignees  should  join,  300,  301. 

assignees  of  joint  promisees  should  join,  301,  n.  (2.) 

whether  may  sue  in  his  own  name  on  policy,  407,  n.  (1.) 

if  assignee  dies,  action  survives  to  successor,  301. 

so  in  case  of  removal,  301,  n.  (3.) 

if  assignee  become  bankrupt,  301,  n,  (3.) 

if  cause  of  action  arise  before  bankruptcy,  must  declare  as  assignee,  if 

after,  need  not,  301,  n.  (4.) 
if  partner  insolvent,  assignee  should  join  with  remaining  partners,  301, 

302. 
Wliat  property  assirinee  takes,  302-307. 
property  held  in  right  of  another  does  not,  302,  and  n.  (2.) 
debt  collected  for  another,  if  distinguishable,  302. 

if  not  distinguishable,  302,  and  n,  (3.) 
if  factor  has  received  payment  for  goods,  302. 
property  exempt  from  operation  of  bankrupt  law,  303,  n.  (1.) 
wearing  apparel,  303,  and  n.  (2,  3.) 
gifts  by  bankrupt  to  his  children,  303, 
by  a  stranger,  303,  n.  (4.) 
must  be  assent  of  donee  to  complete  gift,  304., 
so  in  generaf  to  a  devise,  304. 
devise  of  real  property  to  bankrupt,  304,  n.  (2,) 
property  coming  to  bankrupt  after  decree,  304, 

after  petition  and  before  decree,  304,  n.  (4.) 
this  controlled  by  statute,  304,  305. 
insolvency  of  partner  dissolves  partnership,  305, 
assignee  takes  his  interest,  305,  n.  (1.) 

this  ascertained  by  allowing  partners  to  retain  on  appraisement,  305. 
will  not  bind  partners  if  without  their  knowledge,  805, 
assignee  a  tenant  In  common,  305. 
property  falling  to  wife,  after  petition,  305. 

reasonable  provision  to  be  made  for  her  support,  305,  306,  and  n.  (1.) 
money  In  the  hands  of  an  attorney,  306. 
possibihty  of  estate  if  coupled  with  interest,  306, 


INDEX.  571 

BANKRUPTCY  AND  INSOLVENCY,  continued. 
but  not  naked  possibility,  30G,  n.  (3.) 

insolvency  revokes  attorney's  lien,  not  coupled  with  interest,  307. 
Of  the  discharge  of  the  insolvent,  307-309. 
various  provisions  of  statutes,  307,  308,  and  n.  (1.) 
discharge  avoided  if  money  paid  creditors  to  secure  it,  308. 

if  bond  or  note  given,  308,  and  n.  (2.) 
discharge  does  not  affect  claims  or  co-sureties,  309. 
nor  liability  of  insolvent  for  torts,  309, 
nor  fiduciary,  309. 

nor  for  any  debts  not  provable,  309,  u.  (1.) 
Of  foreign  hanh-uptcy  or  insolvency,  309-316. 
conflict  of  opinion  on  this  subject,  309. 
English  rule,  310. 
continental  rule  the  same,  310. 
on  what  jn-inciples  based,  310,  and  n. 
early  inclination  of  American  authority,  311. 
present  American  doctrine,  311,  n.  .(2,)  312. 

exception  to  this  doctrine,  313,  and  n.  C2.) 
transfer  of  real  estate,  313,  and  n.  (2.) 
principle  of  the  English  rule,  313. 
limitation  of  the  application  of  this  rule,  314. 
States  of  the  Union  foreign  to  each  other,  314. 
effect  of  discharge  on  debts  contracted  in  other  countries,  314,  n.  (1,) 
315. 
claim  in  national  constitution,  315. 
distinction  between  right  and  remedy,  315,  316,  n.  (1.) 
.    partial  exemptions  may  be  made  by  a  State,  316,  n.  (2.) 

whether  discharge  can  affect  creditors  in  another  State  who  do  not 

come  into  the  assignment,  316,  n.  (3,  4.) 
discharge  by  insolvent  law  of  date  when  the  contract  was  made,  and  of 

which  debtor  was  citizen,  316,  and  n.  (5.) 
discharge  granted  in  State  when  contract  made  between  citizens  of  that 
State,  and  action  brought  in  another,  316,  n.  (6.) 
BANKS, 

liability  of,  as  agents,  144. 
BARRATRY, 

(See  Marine  Insurance.) 

BILLS, 

(See  Negotiable  Paper.) 

BILLS  OF  LADING, 

(See  Stoppage  in  Transitu,  Shipping.) 
BOATMEN, 

when  liable  as  common  carriers,  202. 
BOTTOMRY  BOND, 

(See  Interest  and  Usury,  Shipping.) 


572  INDEX. 

BROKERS, 

(See  Agexcy.) 

C. 
CAPTURE, 

who  liable  for  delay  by,  3G5. 
definition  of,  450. 
CARGO, 

lien  of,  on  sbip,  344. 
CARRIAGE  OF  GOODS. 

Of  a  private  carrier,  196-198. 
definition  of,  196. 
liable  for  ordinary  care,  197. 
carrier  without  compensation  liable  for  what,  197. 
■whether  private  carrier  has  a  lien  or  not,  198. 
Of  the  common  carrier,  198-204. 
rights  and  responsibilities  of,  198. 
definition  of,  199. 
difference  between  the  liabilities  of  private  and  common  carriers,  199, 

andn.  (3,)  200,  n.  (1.) 
who  are  common  carriers,  200,  201,  and  n.  (1.) 
expressmen  are  included,  201. 
whether  freighting  vessels  are,  202. 
of  boatmen,  ferrymen,  and  steamboat  owners,  202, 
party  may  hold  two  ofiices  or  relations,  203. 
whether  a  party  is  a  common  carrier  or  warehouseman,  203. 
Of  the  ohligation  of  the  common  carrier  to  receive  and  carry  goods  or 

passengers,  204-211. 
of  the  extent  of  his  contract  with  the  people,  204. 
when  he  may  refuse  to  carry  goods,  204. 
of  his  right  to  charge,  205. 
when  and  how  he  must  receive  goods,  205. 
carrier  of  passengers  must  take  all  who  offer,  205,  and  n.  (7.) 
of  his  general  treatment  of  them,  206. 

bow  and  when  carrier  must  deliver  goods,  207,  and  n.  (8.)  • 

when  he  may  refuse  to  deliver  goods  to  consignee,  208. 
of  notice  to  consignee  of  the  delivery,  209. 
what  is  a  sufficient  delivery,  209. 

what  is  a  sufficient  delivery  and  notice  thereof  to  the  carrier,  210. 
whether  a  railroad  carrier  must  give  notice  of  the  arrival  of  goods  at  his 

depot,  210,  and  n.  (3.) 
of  carrier's  liability  when  a  third  party  demands  goods  under  his  care, 

211. 
when.he  may  deliver  goods  to  a  third  party  on  showing  title,  211. 
Of  the  lien  of  the  common  carrier,  212. 
definition  of  the  word  lien,  212. 


IXDEX.  573 

CARRIAGE  OF  GOODS,  cnnthutcd.      ■ 

carrier's  liability  while  detaining  goods  for  freight,  212. 

no  lien  on  goods  carried  for  one  not  their  owner,  212. 
Of  the  UablUly  of  the  common  carrier,  213-218. 

why  his  liability  is  so  great,  213. 

limitation  of  that  liability,  213, 

what  are  acts  of  God,  213,  215. 

liable  for  loss  by  fire  unless  caused  by  lightning,  214,  and  n.  (1) 

liable  for  loss  by  theft,  althouc:h  inevitable,  214,  and  n.  (4.) 

carriers  are  liable  for  acts  of  their  agents,  215,  21G,  and  n.  (3.) 

•when  carriers  liable  beyond  their  route,  217. 

difference  between  the  English  and  American  decisions,  217,  and  n.  (2.) 
Of  the  carrier  ofpassetigeis,  218-220. 

to  what  extent  carriers  of  passengers  are  liable,  218,  and  n.  (3.) 

of  the  carriage  of  slaves,  219. 
Of  a  notice  ly  the  carrier  respecting  Jus  liability,  220-225. 

common  carrier  may  limit  his  liability  by  special  agreement,  220,  and 
n.(2.) 

■whether  passenger  carriers  may  limit  their  liability,  221. 

■whether  a  mere  notice  limits  carrier's  liability,  222,  and  n.  (1.) 

whether  special  agreement  is  made  in  each  case,  how  determined,  222. 

how  far  carrier's  liability  may  be  limited  by  notice,  222,  223,  and  n.  (1.) 

whether  notice  came  to  knowledge  of  a  pai'ty,  how  determined,  223.  • 

Low  far  fraud  affects  carrier's  liability,  224. 

how  far  party  bound  by  carrier's  authorized  notice,  224. 

whether  a  common  carrier  can  bargain  away  his  liability,  224. 
Of  carrier's  liahility  for  goods  carried  hy  passengers,  225-229. 

how  much  baggage  a  passenger  may  carry,  225. 

purpose  of  this  rule,  226. 

for  what  baggage  of  passenger  is  carrier  liable,  226. 

when  passenger  or  wife  may  testify  as  to  amount  of  baggage  lost,  227. 

when  common  carrier  liable  for  injury  to  third  parties,  227. 

not  liable  for,  if  injured  are  negligent,  228,  and  n.  (2.) 

whether  railroad  is  responsible  for  fire,  how  determined,  223. 

of  common  carrier's  liability  in  case  of  collision,  229. 
CESTUI  QUE  TRUST, 

(See  Bankruptcy.) 

CHARTER-PARTY, 

(See  Shipping.) 

CHECKS  ON  BANKS, 

(See  Negotiable  Papep..) 
COLLISION, 

caused  by  master,  381,  382. 
(See  Shipping,  Carriage  of  Goods,  and  Marine  Instjr.a.nce.) 
COMMISSIONERS, 

(See  Bankruptcy.) 


574  INDEX. 

COMMON  CARRIER, 

(See  Cakijiage  of  Goods.) 
COMPANIES, 

(lifTerence  between  mutual  and  stock,  489,  490. 
CONCEALMENT, 

(See  Insurance.) 

CONSIDERATION, 

Of  the  need  of  a  consideration,  25,  26. 

in  the  civil  and  common  law,  25,  and  n.  (1.) 

sjiecialties  generally  form  an  exception  to  this  rule,  25,  and  n.  (2.) 

negotiable  paper  forms  another  exception,  26,  96. 

meaning  of  the  word  "consideration,"  26. 

the  operation  of  this  rule,  26. 
Wliat  is  a  sufficient  consideration,  27-34. 

any  thing  that  suspends  or  terminates  litigation,  27. 

must  not  be  of  a  wholly  unfounded  claim,  28. 

of  discontinuance  of  criminal  proceedings,  28. 

may  consist  of  money,  goods,  work,  or  service,  29. 

of  a  part-performance  of  a  contract  for  service,  30. 

eflFect  of  a  material  departure  from  the  agreement  in  the  performance  of 
the  contract,  30,  31. 

may  be  a  promise  for  a  promise,  if  mutual,  32. 

when  mutuality  between  parties  not  necessary,  33. 

■when  an  agreement  to  refer  to  arbitration  is  mutual,  33. 

subscription,  when  a  consideration  for  such  promises,  33. 
Ofittegal  coiisideration,  34,  35. 

■when  a  contract  may  be  partially  enforced,  although  the  promise  and 
consideration  are  partially  illegal,  34,  54. 

a  penal  statute  makes  an  act  illegal,  though  unprohibited,  35. 
Of  imi-)0ssihle  considerations,  35,  36. 

the  impossibility  must  be  natural,  not  merely  personal  to  the  promisor, 
35,  36. 
Of  failure  of  consideration,  36,  37. 

whether  total  or  partial,  36. 

when  money  paid  for  such  consideration,  what  can  be  rqpovered,  or  de- 
ducted and  set  off,  36,  37. 
Of  the  rights  of  one  loho  is  a  stranger  to  the  consideration,  37,  38. 

distinction  between  the  ancient  and  modern  rule,  37,  38. 

when  strangers  to,  may  bring  an  action,  38. 
Of  the  consideration  arising  from  discharging  the  debt  of  another,  38-40. 

where  one  is  compelled  to  pay  the  debts  of  another,  he  is  subrogated  to 
his  rights,  not  so,  If  he  voluntarily  jiays  them,  38,  39. 
(See  Negotiable  Paper.) 
CONSIGNOR  AND  CONSIGNEE, 

of  power  to  insure,  512. 

rights  and  liabilities,  346,  352,  405,  n,  (3). 


INDEX.  575 


CONSTKUCTION, 

of  contracts,  15. 

(See  Limitations.) 
of  terms,  438,  450,  451,  456-4G1,  4G4. 
of  policies  against  fire,  494-507. 

(See  Fire  Ixsueaxce.) 
C02s^TIlABAND  OF  WAR, 

■what  property  deemed  such,  417,  and  n.  (2.) 
trade,  not  illegal  in  neutral  State,  418. 
risk  must  be  known  to  insurers,  418. 

(See  Makike  Insuraxce.) 
CONTRACTS, 

unactionable,  78. 

of  maune  insurance,  how  made,  403-408. 
(See  Sales.) 
CONTRIBUTION, 

(See  General  Average.) 
COOLIES, 

mutiny  of,  447,  n.  (3.) 
CORPORATIONS, 

bonds  of,  when  usurious,  266. 

of  a  general  agent  of,  140. 

notice  to  ofEcer  or  member  of,  149. 

CORRESPONDENCE, 

(See  Agreemext.) 


D. 

DAMAGES, 

(See  Baxkruptcy,  290.) 

DEL  CREDERE  COjSBIISSION, 

(See  Agency.) 
DELIVERY, 

(See  Statute  of  Frauds,  Sales,  Carriage  of  Goods.) 
DEMURRAGE, 

what  it  is,  and  when  and  how  recovered,  362-365. 
(See  SnippixG.) 
DESCRIPTION, 

of  property  insured,  437-440,  494. 
mistake  in,  437,  495. 
DETENTION,  450,  451. 
DE\^ATION, 

(See  Marine  Insuraxce.) 

DISABILITIES, 

(See  Limitatioxs.) 

DISCHARGE, 

of  insolvent,  294,  307,  314-316. 


576  INDEX. 

DISSOLUTION, 

of  partnership,  1G9-172. 
effect  of,  190-194. 

of  contract  of  affreightment,  how,  3G5-367. 
(See  SnippLNG.) 
DOUBLE  INSURANCE, 

(See  Fire  Ixsuraxce.) 


E. 

EMBAEGO, 

•Nvho  liable  for  delay  by,  365. 
EMBEZZLEMENT, 

by  master,  382. 
EVIDENCE,  • 

parol,  admissible  to  decide  priority  of  policies  of  insurance,  420,  n.  (5.) 
(See  Insuranck,  Agreement  and  Assent,  Carriage  of  Goods.) 
EXPRESSMEN, 

(See  Carriage  op  Goods.) 


F. 
FACTORS,  158-163,  169. 


(See  Agency.) 
(See  Consideration.) 


FAILURE, 

FERRYMEN, 

liability  of,  202. 
FIRE, 

(See  Marine  Insurance.) 
FIRE  INSURANCE, 

Of  the  usual  subject  and  form  of  this  insurance,  488-493. 
difference  between  this  and  marine  insurance,  488. 
"what  articles  are  insured  in  this  way,  488. 
how  and  by  whom  may  be  made,  489. 
of  stock  companies,  how  established,  489. 
prevalence  of  mutual  companies,  and  why,  489. 
liability  of  maker  of  a  premium  note  to  pay  it,  489,  and  n.  (1.) 
disadvantages  of  mutual  companies,  490. 
no  fund  except  premiums  and  notes,  490. 
security  by  lien,  land  connected  with  buildings  insured,  490. 
stock  companies  insure  for  full  value,  490. 
mutual,  generally  for  one  half  or  two  thirds,  490. 

usage  may  be  called  in  to  exi^lain,  but  not  to  contradict  terms  of  a  con- 
tract, 490. 
what  usages  can  be  admitted  to  explain  contracts,  491,  and  n.  (1.) 
when  agreement  to  cancel  policy  should  be  signed,  491. 


INDEX.  577 

FIRE  INSURANCE,  continued, 

when  a  fire  policy  is  executed,  4!»2. 
■whether  bargain  may  be  oral,  492,  n.  (1.) 
whether  may  be  made  by  correspondence,  402,  and  n.  (1.) 
effect  of  a  memorandum  and  of  ratification,  493. 
insured,  in  fire  policy  specifically  named,  493. 
Low  a  rule  to  pay  down  may  be  waived,  493. 
"Of  tlie  construction  o/poUcies  acjainst  fire,  494-507. 
what  description  of  property  sufficient,  494. 
intention  as  expressed  in  contract  must  govern,  494,  and  n.  (1.) 
meaning  of  "stock  in  trade,"  494. 
when  policy  void  for  uncertainty,  495,  note, 
mistake  of  factor  in  phraseology  may  be  corrected,  495. 
of  the  admission  of  a  memorandum,  495. 
Low  insurance  made,  49 G. 
of  petition  in  writing,  496. 

of  statements,  questions,  and  specific  answers,  496. 
these  papers  referred  to  form  part  of  contract,  496. 
general  reference  to  a  paper  not  sufficient,  496,  n.  (3.) 
when  application  Las  effect  of  warranty,  496,  n.  (3.) 
object  of  application,  when  part  of  policy,  497. 
when  conditions  or  condition  precedent,  497. 

when  facts  written  in  policy,  written  prevails  over  printed  matter,  497. 
of  scale  of  premiums,  498. 

wLen  innocent  false  statement  avoids  policy,  498,  and  n.  (2.) 
to  statement  of  hazardous  trades,  expressio  unius  exclusio  est  alterius  is 

applied,  498. 
cannot  vary  the  policy  as  to  what  is  more  hazardous,  498. 
whether  description  in  policy  amounts  to  a  warranty,  498,  n.  (1.) 
whether  insured  may  change  the  use  of  a  building,  498,  n.  (1,)  500,  and 

n.  (1.) 
Low  far  the  risk  of  insurers  may  be  changed,  500,  501,  and  n.  (1.) 
meaning  of  word  "  storing  "  or  "  keeping,"  501,  n.  (1,)  503. 
notice  of  any  introduction  of  fire  Leat,  501,  n.  (1.) 
meaning  of  alterations,  501,  n.  (1.) 
warranty  to  work  mill  by  day  not  broken  if  worked  by  night,  501, 

n.(l.) 
intention  decides  when  variance  between  policy  and  use  of  building. 

502. 
what  are  restrictions  in  policy  as  to  use  of  buildings,  503. 
what  is  insured  as  a  private  dwelling  may  be  used  as  a  boarding-house, 

503,  n.  (1.) 
wLether  leaving  a  house  vacant,  described  as  a  private  residence,  avoids 

a  policy,  504. 
livery  stable  more  hazardous  than  tavern  barn,  504. 
when  mere  alterations  avoid  policy,  504. 
when  risk  increased  is  often  the  only  question,  504. 
49 


578  INDEX. 

FIRE  INSURANCE,  continued, 

soldering  a  metallic  covering  increases  tlie  risk,  505. 

if  the  soldering  be  safely  completed,  this  does  not  discharge  the  insurers 
from  a  subsequent  loss,  505. 

if  during  the  increased  risk  a  loss  occur  from  an  independent  cause,  the 
insurers  are  not  discharged,  505. 

as  to  asking  consent  of  insurer  in  such  cases,  505. 

if  the  alteration  be  of  a  permanent  character  and  the  risk  be  increased, 
insurers  are  discharged  as  soon  as  the  alteration  is  made,  505. 

and  the  insurers  are  discharged  in  such  case,  Avhether  the  fire  be  caused 
by  the  improvement  or  by  an  independent  matter,  505. 

insured  may  keep  his  buildings  in  repair  without  increasing  the  risk,  506. 

if  the  fire  is  caused  by  means  of  the  repairs,  the  insurer  is  not  dis- 
charged, 506. 

rene^val  of  policy,  506,  507. 
Of  the  interest  of  the  insured,  507-514. 

any  legal  interest  in  the  property  insured  is  sufficient,  507. 

an  equitable  interest  is  sufficient,  507. 

expectant  interest  in  property  not  sufficient  to  support  an  insurance, 
507,  508. 

party  assigning  his  property  for  the  payment  of  his  debts,  has  an  insur- 
able interest  in  the  property,  508. 

mortgagor  has  an  insurable  interest  to  the  amount  of  the  ■whole  value  of 
the  property,  508. 

mortgagor  and  mortgagee  may  both  insure  the  same  property,  509. 

mortgagee  has  an  interest  only  to  the  extent  of  his  debt,  509. 

whether  mortgagee  can  hold  both  the  amount  received  from  the  in- 
surers and  also  recover  the  debt  from  the  debtor,  509,  and  n.  (4.) 

debtor  may  compel  mortgagee  to  enforce  his  claim  against  the  insurers, 
and  thereby  discharge  the  debt,  510,  and  n.  (1.) 

if  mortgagor  is  bound  to  keep  premises  insured,  mortgagee  has  a  lien 
on  proceeds  of  the  policy,  510. 

tenant,  by  the  courtesy,  may  insure  the  property,  511. 

one  holding  by  disseizin,  if  he  have  a  freehold  interest,  may  effect  in- 
surance on  the  property,  511. 

insurance  by  tenant  for  years,  or  from  year  to  year,  511. 

"where  the  insurers  have  a  lien  for  amount  of  premium  note  on  property 
insured,  incumbrances  must  be  stated,  and  the  title  of  tlie  insured 
fully  set  forth,  511,  and  n.  (4.) 

insurance  by  trustee,  agent,  and  consignor,  512. 

consignor  is  not  bound  to  insure,  512. 

consignee  may  insure  his  own  interest  in  the  property  or  that  of  his 
consignor,  512. 

by  virtue  of  his  implied  authority,  consignee  may  insure  the  whole  value 
of  goods  in  his  possession  against  fire,  512,  and  n.  (4.) 

commission  merchant  may  insure  in  his  own  name  all  the  goods  of  his 
various  consignors,  513. 


ixDEX.  579 

FIEE  DJSURANCE,  continued, 

consignee  nnay  insure  against  fire  his  interest  in  goods  before  they  are 
received,  513. 

bailee  having  a  legal  interest  in  the  property  bailed,  may  insure  it 
against  fire,  513. 

ownership  of  the  property  must  be  set  forth,  513. 

there  must  be  an  authority  to  effect  the  insurance,  514. 

tenant  in  common  cannot  insure  for  his  co-tenant,  514. 

ship-master  cannot,  as  such,  insure  owner's  interest,  514. 
Of  reinsurance,  514-516. 

reinsurance  in  fire  policies  is  lawful,  514. 

what  is  reinsurance,  514. 

party  effecting  reinsurance  is  bound  to  communicate  all  his  information 
concerning  the  party  originally  insured,  514,  515. 

person  efiecting  reinsurance  in  case  of  loss,  recovers  all  he  is  liable  to 
pay,  515. 

if  the  insurer  effect  reinsurance  and  then  become  insolvent,  the  party 
origlnally'insured  has  no  lien  on  the  policy  of  reinsurance,  515. 

usage  in  case  of  reinsurance,  515,  516. 
Of  double  insurance,  516-519. 

difference  between  double  insurance  and  reinsurance,  516. 

double  insurance  not  allowed,  516. 

effect  of  double  insurance,  how  obviated,  516. 

usually  provided  in  policies  that  notice  of  prior  insurance  must  be  given, 
516,517. 

equity  will  not  relieve  a  party  who  has  not  given  sufficient  notice,  517. 

potice  of  prior  Insurance  may  be  given  to  an  agent  who  is  authorized  to 
receive  applications,  517,  and  n.  (3.) 

of  contribution  between  insurers  effecting  insurance  on  the  same  in- 
terest, where  the  insurance  is  to  be  void  if  notice  of  prior  insurance 
is  not  entered  on  the  policy,  518. 

•what  is  double  insurance,  518. 
Of  icarranty  and  representation,  519-526. 

warranty  is  a  part  of  the  contract,  519. 

operates  as  a  condition  precedent,  519. 

warranty  may  be  affirmative  or  promissory,  519. 

an  affirmation  may  also  be  a  continuing  warranty,  519,  and  n.  (2.) 

what  amounts  to  warranty,  520. 
^        word  warranty  need  not  be  used,  521. 

effect  of  indorsement  in  respect  to  warranty,  521. 

a  statement  in  policy  may  be  merely  a  license  and  no  part  of  a  war- 
ranty, 521. 

representation  differs  from  warranty  in  not  being  a  part  of  warranty, 
521. 

representation  may  be  an  inducement  to  the  contract,  and  if  fraudulent, 
make  it  void,  521. 

effect  of  an  immaterial  false  statement,  521. 


580  INDEX. 

FIRE  INSURANCE,  contmued, 

how  to  determine  materiality  of  statement,  521. 

difference  between  written  and  oral  representation,  522. 

■when  representations  have  the  effect  of  warranties,  522. 

in  marine  pohcies,  an  innocent  misrepresentation  avoids  them,  522. 

in  fire  policies  only  fraudulent  representation,  522. 

why  this  difference,  522. 

•whether  materiality  of  statement  question  of  fact  or  law,  522. 

effect  of  suppressing  truth  or  not  stating  all  insured  knows  to  increase 
risk,  523,  and  n.  (1.) 

difference  between  fire  and  marine  policy  as  to  concealment,  523. 
*  of  the  duty  of  insui^ers  against  fire  to  examine  proj)erty,  523. 

what  common  matters  insurers  presumed  to  know,  524. 

when  fact  of  many  incendiaries  should  be  stated,  524. 

how  questions  should  be  answered,  524. 

effect  of  any  kind  of  concealment,  524. 

when  concealment  of  incumbrance  or  defect  of  title  will  avoid  policy, 
525. 

whether  change  could  be  made  in  position  of  movables  insured,  525. 

of  insurance  of  goods  in  transitu,  525. 
Of  the  7'islc  incurred  hy  the  insurers,  526-529. 

property  at  time  of  insurance  must  be  in  usual  safety,  526. 

insurers  not  Hable  for  loss  by  heat,  ellect  of  which  is  not  ignition  or  com- 
bustion, 526. 

liable  for  damage  by  water  used  to  extinguish  fire,  526. 

when  liable  for  damage  by  removing  goods  from  danger  of  fire,  526. 

liable  for  injury  by  blowing  up  buildings  to  arrest  fire,  526. 

whether  liable  for  any  useless  damage,  526. 

not  liable  for  damage  by  lightning  unless  ignition,  527. 

explosion  by  gunpowder  is,  but  by  steam  is  not  loss  by  fire,  527. 

whether  liable  when  negligence  of  insured  is  the  cause  of  loss  by  fire, 
527. 

only  negligence  that  is  fraud  discharges  insurers,  527,  and  n.  (4.) 

fire  caused  by  insanity  of  insured  no  defence,  527. 

liable  for  destruction  of  what  apparatus  for  using  fire,  528. 

whether  liable  for  damage  occasioned  by  excessive  heat,  528. 

whether  liable  for  damage  by  heated  lime,  528. 

whether  liable  for  loss  of  mill  by  fermentation  of  cotton,  528. 

whether  "  military  or  usurped  power  "  does  not  cover  a  common  mob, 
528. 

"  riot "  does  not  include  loss  by  fire  caused  by  a  tumultuous  assemblage, 
528. 
Of  valuation,  529,  530. 

not  usually  made  in  fire  policies,  and  why,  529. 

of  the  prohibitive  clause  in  charters  of  mutual  companies,  529. 

when  conclusive  against  insurers,  530. 

whether  valued  policies  may  be  made,  530. 


INDEX.  581 

FIRE  INSURANCE,  continued, 

of  renewing  valuation  after  loss,  530. 

amount  of  loss  determined  by  auction  sale,  530. 
Of  alienation,  530-535. 

policies  against  fire  not  transferable  witliout  consent,  530. 

insured  must  have  an  interest  in  property  insured,  531. 

transfer  of  pi'operty  destroys  claim,  531. 

of  assignment  of  policy,  531. 

when  assignee  of  property  has  claim  on  insured,  531. 

difference  between  marine  and  fire  jiolicies  as  to  assignees,  531. 

•when  policy  forbids  assignment  of  insured  intei'est,  531. 

■what  amounts  to  an  alienation,  532: 

■whether  conveyance  and  lease  back  is,  532. 

■whether  mortgage  and  assignment  of  policy  is,  532.      » 

contract  to  convey  Is  not,  532. 

nor  conditional  sale,  532, 

nor  mortgage  until  foreclosure,  532. 

nor  selling  and  Immediately  taking  back,  532. 

bankruptcy  is,  533. 

policy  only  void  so  far  as  aliened,  533. 

policies  not  negotiable,  533. 

indorsee  may  sue  on  express  promise,  534. 

right  of  transferree  when  originally  insured  burns  building,  534. 

does  not  avoid  premium  note,  534. 

whether  forfeiture  ■waived  by  receiving  payments  of  notes,  534. 

■what  should  be  done  on  transferring  property,  534. 

whether  insurers  subrogated  to  rights  of  insured  against  a  railroad  com- 
pany, 535. 
Of  notice  and  p7-oof,  535-537. 

when  production  of,  condition  precedent,  535. 

when  delay  in  production  of,  535. 

when  assignee  may  give  the  notice,  536. 

waiver  of,  what  amounts  to,  53G. 

what  delay  is  a  waiver,  536,  n.  (3.) 

whether  refusal  to  settle  is  a  waiver  of,  536. 

whether  preliminary  proofs  are  evidence  of  damage,  53G. 

whether  insurers  bound  by  examination  under  oath,  537. 
Of  adjustment  and  loss,  537-539. 

insurers  liable  for  what  consequences  of  loss,  as  profits,  537. 

whether  profits  are  directly  insurable,  537,  n.  (2.) 

difference  between  fire  and  marine  policy  in,  537. 

in  former,  whole  amount  lost  is  paid,  537. 

in  latter,  only  a  proportionate  part,  537. 

whether  insurers  liable  for  property  sacrificed  to  protect  insured  prop- 
erty, 538. 

no  return  of  premium  as  contract  is  entire,  538. 

when  entire  premium  may  be  returned,  538. 
49* 


582  INDEX. 

FIRE  INSURAjSTCE,  continued, 

partial  returns  only  made  in  marine  insurance,  538. 

of  insurer's  right  to  rebuild  or  repair,  538. 

Low  far  liability  exhausted  by  repairing,  538. 

no  deduction  "  one  third  new  for  old,"  but  damages  left  to  jury,  539. 

consequence  of  not  permitting  the  insurers  to  examine  the  loss,  539. 

when  money  paid  by  insurers  may  be  recovered  back,  539. 

when  fraud  avoids  the  policy,  539. 

no  equities  in  favor  of  third  parties,  539. 
FLOGGING, 

(See  Punishment.) 
FORGERY, 

of  bank  check,  92. 
FRAUD, 

(See  Sales,  Statute  of  Frauds,  and  Bankruptcy,  282,  283.) 
FREIGHT, 

dead,  358. 

pro  rata,  350,  351,  475. 

(See  Shipping,  Carriage  of  Goods.) 

insurance  of,  418,  419. 

(See  Marine  Insurance.)    * 

abandonment  of,  475. 
FREIGHTING  VESSELS, 

whether  liable  as  common  carriers,  202. 


G. 

GENERAL  AVERAGE, 

(See  Shipping,  Marine  Insurance.) 
GUARANTY, 

definition  of,  65. 
when  negotiable,  65. 
no  special  form  necessary,  Co. 

liability  of  guarantor  usually  measured  by  that  of  principal,  65. 
not  so  when  the  promise  of  a  wife  or  infant  is  guaranteed,  G5. 
construed  strictly,  65. 
of  guarantor's  right  to  securities,  66. 
when  must  be  supported  by  consideration,  66. 
when  consideration  of  original  debt  sufficient,  66. 
definition  of  consideration,  66. 

when  promise  of,  is  original  and  not  within  the  Statute  of  Frauds,  GO). 
acceptance  of,  and  notice  thereof  must  be  given,  66. 
what  change,  renewal,  or  extension  of  the  principal's  liability  will  dis- 
charge guarantor,  67,  and  n.  (3.) 
when,  of  a  partnership  is  extinguished,  68,  and  n.  (2.) 
when  revocable,  68. 


INDEX.  583 

GUARANTY,  continued, 

what  indulgence  creditor  may  give  debtor  without  discharging  guaran- 
tor, G9,  294. 

why  creditor  cannot  be  forced  to  proceed  against  debtor,  69. 

when  gross  negligence  of  creditor  discharges  guarantor,  G9,  and 
n.(4.) 

he  is  discharged  when  creditor  suspends  his  right  of  action,  70. 

when  non-notice  no  defence,  70,  and  n.  (1.) 

extent  of  an  official  guarantor's  liability,  70. 


ILLEGALITY, 

(See  CoxsiDERATiox,  Sales,  Negotiable  Paper,  Insukaxce.) 
INDORSEMENT, 

of  bills  and  notes,  120-128. 

(See  Negotiable  Paper.) 
of  policies,  407. 
of  bills  of  lading,  63,  346. 
by  assignee,  299,  n.  (4.) 
effect  of,  in  respect  to  warranty,  521. 
INDORSER, 

rights  and  duties  of,  120-1 2S. 

(See  Negotiable  Paper,  Law  of  Place.) 
INFANTS, 

(See  Parties.) 
INSOLVENCY, 

(See  Bankruptcy.) 
INSURANCE, 

(See  Marine,  Eire,  Life.) 
INSURERS, 

liable  for  what,  441-445. 
INTEREST, 

of  insured,  408-412,  507-514,  548-552. 
(See  Insurance.) 
INTEREST  AND  USURY,. 

Wliat  interest  is,  and  when  it  is  due,  2^1-253. 
meaning  of,  251. 

on  what  two  grounds  Interest  may  be  demanded,  251. 
when  interest  is  allowed,  252. 
when  not  until  money  is  payable,  252. 
Of  usury,  253-262. 

when  debt  forfeited,  253. 

rules  of  each  State  regulating  Interest,  253,  and  n.  (4.) 

what  is  a  usurious  bargain,  254. 

by  intention,  not  by  mere  mistake,  255. 


584  ixDEX. 

INTEREST  AND  USURY,  continued, 

nothing  beyond  a  usurious  contract  is  efFccted  by  usury,  25S,  anel  n.  (1.) 

agreement  to  pay  a  penalty  not  usurious,  256. 

usurious  interest  taken  is  not  conclusive,  256. 

usurious  contracts  always  void,  25  7. 

a  usurious  note  in  an  innocent  indorsee's  liands,  257. 

when  new  securities  are  usurious,  257,  and  n.  (5.) 

when  usurious  debt  merged  in  judgment,  258. 

when  a  mortgage  to  secure  a  usurious  debt  may  be  enforced,  258. 

of  devices  to  conceal  usury,  259. 

by  selling  goods  at  a  high  price,  259. 

by  discounting  notes,  259,  and  n.  (3.) 

whether  contract  usurious,  how  determined,  260. 

borrowing  stock  at  too  high  a  valuation,  260. 

when  return  of  stock  is  optional,  261. 

of  two  contracts  to  pay  legal  interest  for  same  debt,  261. 

when  a  gift  is  really  Illegal  interest,  262. 

contract  not  usurious  where  made,  good  everywhere,  262. 
Of  a  charge  for  risk  or  for  service,  262-2G4. 

for  what  risks  charges  may  be  made,  262. 

loan  on  bottomry,  262. 

purchase  of  an  annuity,  263, 

for  services,  brokerage,  or  rates  of  exchange,  263. 

effect  of  the  intention  of  the  parties  on  a  contract,  263. 

loaning  money  to  partners  for  large  profits,  263. 

when  money  put  into  a  partnership  is,  and  when  not  usurious,  264. 

whether  discounting  by  banks  is  usurious,  264,  and  n.  (4.) 
Of  the  sale  of  notes,  265-268. 

owner's  right  to  sell  a  note,  265. 

one  cannot  sell  his  own  note,  265. 

when  sale  of  a  note  is  not  usurious,  265. 

sale  of  corporation  bonds  for  less  than  face  Is  usurious,  266. 

whether  maker  can  defend  against  a  londfide  purchaser,  266. 

burden  of  proof  changes  when  maker  shows  the  seller  to  be  his  agent, 
266. 

whether  a  person  may  sell  his  own  credit,  267. 

seller  with  Indorsement  Is  entitled  to  full  amount,  267. 

of  indorsing  for  premium,  268. 
Of  compound  interest,  268,  269. 

contract  for  compound  Interest  not  usurious,  nor  enforceable,  268. 

recognized  In  case  of  trustees  not  accounting,  158,  269. 

where  money  is  paid  by  instalments,  what  mode  of  adjusting,  269. 


J. 

JETTISON, 

(See  General  Average.) 


INDEX.  585 


L. 
LAW   OF  PLACE,  317-324. 

What  is  embraced  idlltln  the  law  of  place^  317. 
if  parties  not  at  home,  when  contract  mado  or  action  brought  in  foreign 

tribunal,  317. 
rights  affected  by,  317. 
law  of  place  of  contract,  317. 

of  domicile  of  a  party,  317. 

where  the  thing  is  situated  to  which  contract  refers,  317. 
of  the  tribunal  before  which  case  comes,  317. 
importance  of  this  law,  317. 
Of  the  general  principles  of  law  of  place,  317-319. 
enumeration  of  their  principles,  317,  318. 
distinction  between  law  of  real  and  personal  property,  318. 
place  of  contract  governs  in  case  of  personal,  318,  n.  (5.) 
law  of  place  where  situated  governs  in  case  of  real  property,  318,  319, 
n.  (1.) 
Of  ils  effect  on  capacity  of  persons  to  contract,  319,  320. 
determined  by  law  of  domicile  as  general  rule,  319. 
and  qualification  of  this  rule,  319,  n.  (2.) 
Of  the  place  of  the  contract,  320-323. 
when  contract  made,  320. 
■where  made,  if  this  is  one  place,  320. 
when  contract  made  by  letter,  320,  n.  (2.) 
qualification  of  this  rule,  321. 
in  some  cases,  both  rules  apply,  321. 
note  made  in  one  place  payable  in  another,  321,  n.  (3.) 
law  of  former  prevails  as  to  j^rocess  and  remedy,  322,  n.  (1.) 
arrest,  limitation  and  prescription,  so  governed,  323. 
Of  domicile,  323,  324. 
in  general  his  residence,  323. 
how  changed,  323,  n.  (2.) 
what  evidence  of  intent,  323,  324. 

what  determines  the  question  of  change,  324,  and  n.  (3.) 
LEX  DOMICILU, 

(See  Law  of  Place.) 
LEX  LOCI,  317-324. 

(See  Law  of  Place,  Negotiable  Paper.) 
LEX  LOCI  CONTRACTUS, 

(See  Law  of  Place.) 
LEX  LOCI  REI  SITiE, 

(See  Law  of  Place.) 
LIEN, 

is  an  insurable  interest,  413. 

rank  of,  by  bottomry  bond,  342,  343. 

on  ships  does  not  depend  upon  possession,  344,  and  n.  (4.) 


586  INDEX. 

LIEN,  continued, 

on  cargo  for  freiglit,  laow  waived,  347,  348. 

"svhetlier  lost  by  want  of  possession,  359. 

extent  of,  360,  381. 

of  seamen,  388,  389. 

of  material  men,  400-402. 

paid  by  insured,  471. 
(See  Shipping,  Carriage  of  Goods,  Factors,  Bankruptcy,  294,  295.)  j 
LIFE  INSURANCE,  540-561. 

Of  the  purpose  and  method  of  life  insurance,  540. 

of  the  parties  who  insured,  and  whose  life  is  insured,  540. 

how  to  get  insured,  540. 

of  questions  put  to  the  insured  and  to  the  life-insured,  540. 

of  questions  to  the  party's  physicians,  540. 

when  the  contract  of,  is  valid,  or  takes  effect,  540,  and  n.  (1.) 
Of  the  ])remiu?n,  541,  542. 

how  the  premium  is  paid,  whether  in  money  or  notes,  541. 

whether  quarterly  payments  must  be  paid  exactly  on  day  due,  541, 
n.  (1.) 

payment  in  notes  not  made  unless  losses  require,  542. 

why  overdue  premium  is  left  unpaid,  542. 
Of  the  restrictions  and  exceptions  in  life  policies,  542-548. 

where  the  life-insured  has  no  right  to  travel,  542,  and  n.  (2.) 

in  what  extra-hazardous  occupations  not  allowed  to  engage,  543. 

death  by  duelling  avoids  policy,  543. 

what  death  by  one's  own  hand  avoids  policy,  543,  544. 

whether  death  self-inflicted  by  an  insane  person  avoids  policy,  544. 

loss  of  life  by  accident  or  insanity  extending  to  unconsciousness,  comes 
not  within  the  provision,  544,  and  note. 

of  death  by  the  hand  of  justice,  545,  and  n.  (1.) 

payment  of  premium  waived  by  taking  note,  546. 

within  what  day  or  hour  premium  must  be  paid,  546. 

when  acceptance  of  overdue  premium  renews  policy,  546,  547. 

when  time  of  death  important,  547. 
.  which  of  two  persons  lived  longest,  how  determined,  54  7. 

after  what  time  law  presumes  a  person  dead,  548. 

death  a  mere  question  of  fact,  548. 
Of  the  interest  of  insured,  548-552. 

insured  must  have  an  interest  in  life-insured,  548. 

what  pecuniary  interest  is  sufficient,  549. 

an  existing  debt  if  founded  on  a  consideration,  549. 

when  insurers  discharged  after  death  of  debtor,  550. 

whether  insured  liable  after  the  debt  on  account  of  which  life  was  in- 
sured, is  paid,  550,  and  n.  (1.) 

whether  sui-ety  liable  after  insurers  have  paid  debt,  552. 

when  insurers  subrogated  to  rights  of  insured,  552. 


INDEX.  687 

LIFE  INSURANCE,  continued, 

Of  the  assignment  of  a  life  polici/,  552-555. 

policies  are  assignable,  552. 

question  of,  how  regulated  by  policy,  553. 

what  constitutes  an  assignment,  553. 

delivery  of  policy  necessary,  553,  and  n.  (4.) 

a  separate  deed,  executed  and  delivered,  sufficient,  554. 

•when  verbal  promise  to  assign,  good  against  insured  and  assignee,  555. 

•when  regulated  by  policy,  555. 
Of  loarrantij,  representation  and  concealment,  555-5G0. 

how  questions  should  be  answered,  555. 

perfect  good  faith  should  be  preserved,  556. 

when  concealment  of  disease  does  not  vitiate  policy,  556. 

meaning  of  expression  "good  health"  in  policies,  556. 

when  warranty  not  broken  by  not  mentioning  such  disease  as  dyspepsia, 
556,  and  n.  (5.) 

when  spitting  of  blood  indicates  consumption,  it  should  be  stated,  557, 
and  n.  (1.) 

what  untrue  answers  avoid  the  policy,  558,  note. 

every  physician  of  hfe-insured  must  be  stated,  558. 

whether  sober  and  temperate  habits  excludes  habits  of  drinking,  559. 

insurers  must  use  the  word  abstinence  to  exclude  tliose  using  ardent 
spirits,  559. 

diflference  between  "not  subject  to  fits"  and  "have  you  ever  had  fits," 
559. 

what  are  material  concealments,  560. 

withholding  intention  of  going  to  a  dangerous  place  is  a  fraud,  560. 

when  erroneous  statements  or  non-statements  do  not  affect  jDolicy,  560. 

equity  will  relieve  when  policy  differs  from  agreement,  560. 
Insurance  against  disease  and  against  dislionesty  of  servants,  561. 

novelty  of  this  insurance,  561. 

what  questions  asked  by  insurers  against  misconduct  of  agents,  561. 

how  declaration  of  applicant  differs  from  warranty,  561. 

when  may  change  his  course  of  conduct,  561. 
LIMITATIONS, 

Of  tie  Statute  of  Limitations,  230,  231. 

of  the  adoption  of  James  I.  statute  in  our  States,  230. 

Lord  Tenterdeu's  Act,  230. 
Construction  of  the  statute,  231-235. 

the  twofold  foundation  of  the  statute,  231. 

whether  a  statute  of  presumption  or  of  repose,  232.  , 

of  the  importance  of  this  statute,  233,  and  n.  (4.) 

effect  of  Lord  Tenterden's  Act,  234. 

of  prescription,  234. 
Of  the  7ieiv  2)romise,  235-238. 

what  new  promise  is  sufficient  to  take  the  case  out  of  the  statute,  180,  235. 

whether  oral  or  in  writing,  235. 


588  i^DEX. 

LIMITATIONS,  continued, 

•wlietbcr  a  mere  acknowledgment  is  sufficient,  235,  and  n.  (4.) 

■whether  a  new  promise  is  made  by  any  expression,  how  determined,  236. 

what  acknowledgment  will  amount  to  a  new  promise,  236. 

of  a  conditional  new  promise,  237. 

effect  of  acknowledgments  under  process  of  law,  237. 

effect  of  every  new  item  in  a  running  account,  23  7. 

when  account  debts  not  barred  by  statute,  238,  and  n.  (1.) 
Of  imrt-payment,  238-240. 

when  part-payment  has  the  effect  of  a  new  promise,  238. 

right  of  debtor  to  appropriate  his  payment,  239. 

how  creditor  cannot  appropriate  debtor's  payment,  239. 

payment  of  part  of  principal  or  interest  renews  the  debt,  239. 

evidence  of  part-payment  need  not  be  in  writing,  240. 
Of  the  jiromise  of  one  of  several  joint  debtors,  240,  241. 

of  the  limitation  of  the  effect  of  a  new  promise  to  him  who  makes  it,  241, 
and  n.  (1.) 

one  can  bind  the  rest  if  authorized,  241. 
To  ^L'liom  the  neio  promise  sJioidd  he  made,  242. 

whether  a  promise  to  a  third  party  is  sufficient,  242. 

what  parties  will  an  admission  by  the  maker  of  a  negotiable  note  to  the 
payee  affect,  242. 
Of  accounts  beticeen  merchants,  243,  244. 

what  is  an  "  account,"  243. 

who  are  merchants,  243. 

meaning  of  the  word  merchandise,  244. 

whether  any  item  of  an  account  must  have  accrued  within  six  years  to 
exempt  the  whole  from  the  statute,  244. 
Of  the  other  statutory  exceptions,  245-247. 

in  case  of  what  disabilities  does  the  statute  not  begin  to  run  until  after 
they  cease,  245. 

after  the  statute  begins  to  run  it  does  not  stop,  245. 

how,  when  there  are  several  disabilities,  245. 

meaning  of  the  expression  "beyond  the  seas,"  246. 

what  is  such  a  return  of  a  debtor  as  will  remove  the  disability,  246. 

where  by  statute,  an  absence  after  the  debt  accrues  is  no  part  of  the 
limited  period,  246. 

of  successive  and  of  temporary  absences,  246. 

the  disability  applies  to  a  foreign  debtor,  247. 

return  of  one  joint  creditor  revives  the  debt  against  all,  247. 

all  debtors  must  return  before  statute  begins  to  run,  247. 
When  the  period  of  limitations  begins,  247-250. 

when  an  action  could  have  been  commenced,  247,  249. 

where  credit  is  given,  when  credit  expires,  247,  248. 

when  the  statute  begins  to  run  against  interested  third  parties,  249,  250. 
That  the  statute  does  not  affect  collateral  security,  250. 

mortgage  may  be  good,  though  a  note  it  secui-es  is  not,  250. 


INDEX.  589 

LOSS, 

■  constructive,  total,  461,  470. 
of  freight,  474,  475. 
partial,  484-486. 

(See  Marine  Ixsurance,  General  Average.) 


M. 
MARINE  INSUEANCE. 

IIow  the  contract  is  made,  403-408. 

formerly  by  individuals,  now  usually  by  companies,  403. 

substance  of  contract,  403. 

consideration,  403. 

policy,  403. 

no  particular  instrument  essential,  403. 

need  not,  perhaps,  be  in  -writing,  403,  n.  (3.) 

obligation  of  insured  diflferent  from  that  of  insurer,  404,  n.  (2.) 

form  of  the  policy,  404. 

percentage,  -n-hen  insured  voluntarily,  defeats  the  contract,  404,  n.  2. 

execution  and  delivery,  404,  405. 

authority  to  effect  insurance,  405. 

master  has  not,  as  such,  nor  a  consignee,  nor  a  part-owner  for  other 

part-owners,  405,  n.  (3.) 
insurance  "  for  whom  it  may  concern,"  405. 
party  interested  may  sue  in  his  own  name,  405. 
insured  described  as  "agent"  generally,  405. 
insurance  in  blank,  406. 
open  or  running  policy,  406,  n.  (6,)  408. 
reference  to  separate  documents,  406. 
policies  subject  to  rules  of  evidence  'whicli  govern  in  specialties,  406, 

n.  (5.) 
alterations  and  mistakes,  406. 
subsequent  alteration  before  breach,  406,  n.  (7.) 
assignment  of  policy,  407. 

when  negotiable  by  indorsement  or  deliver}^  407. 
whether  assignee  may  sue  in  his  own  name,  407,  n.  (1.) 
assignee  of  bond  (fti  bill  of  lading  may  not,  407,  n.  (2.) 
transfer  of  property,  407. 
insolvency  or  death  of  insured,  408. 
construction  of  term  "alienate,"  408,  n.  (1.) 
claim  assignable  after  loss,  408. 
vendor  or  mortgagor  retaining  possession,  408. 
Of  the  interest  of  the  insured,  408-412. 
open  and  valued  policies,  408. 
wager  policies,  excessive  valuation,  409. 
valuation  applied  to  part  of  the  property,  409. 
of  freight,  410. 

50 


590  INDEX. 

MARINE  INSURANCE,  continued, 

valuation  of  profits,  410. 

where  part  only  of  the  goods  valued  are  on  board,  410,  n.  (2.) 

value,  how  determined  Avhen  the  policy  is  open,  411. 

insured  founds  his  claim  on  the  value  at  the  time  of  loss,  411. 

profits  not  susceptible  of  exa£t  valuation,  410,  n.  (9.) 

when  the  insurance  is  on  successive  voyages,  411,  412. 

standards  of  valuation,  —  invoice  price,  prime  cost,  market  value,  412, 
n.  (1.) 

deductions,  and  rate  of  exchange,  412. 
JVJiat  interests  may  he  insured^  412-419. 

mere  possibility  cannot,  412. 

nor  an  interest  in  a  contract  not  performed  or  capable  of  enforcement, 
412,  n.  (5.) 

contract  to  indemnify,  and  reinsurance,  412. 

how  regulated  in  England,  412,  n.  (7.) 

transfer  of  interest,  or  change  in  its  nature,  412. 

lien  is  insurable  interest,  413. 

factors,  bailees,  consignees,  carriers,  and  lenders  on  bottomry  may  in- 
sure, 413. 

expectation  of  profits,  loans,  advances,  413,  and  notes  (4,  5.) 

collateral  security,  and  subrogation,  413,  n.  (5.) 

recovery  of  insurance  by  mortgagee,  413. 

phrase  "lost  or  not  lost,"  414. 

interest  originally  valid,  defeated  only  by  actual  devestment  of  property, 
414. 

stoppage  in  transitu,  415,  and  n.  (2.)  . 

interest  originally  illegal,  415. 

policy  contrary  to  law,  415. 

mariners  or  mates  cannot  insure  their  wages,  415. 

master  may,  416. 

presumption  of  legality,  416. 

illegal  intention,  imexccuted;  smuggling  stores,  416. 

voyage  or  cargo  may  be  severable,  416. 

compliance  with  foreign  registry  laws,  416.  . 

assured  not  obliged  to  state  his  interest,  unless  required,  416,  n.  10.. 

contraband  of  war,  417.  • 

what  are  deemed  such,  417,  and  n.  (2.) 
trade,  not  illegal  in  neutral  State,  418. 
risk,  must  be  known  to  insurers,  418. 

condemnation  for  breach  of  blockade  justified  by  proof  of  what,  418, 
n.  (2.) 

insurance  of  freight,  what  it  covers,  418. 

when  the  risk  begins,  418. 
when  the  ship  sails  without  cargo,  418. 
advanced,  419. 
Of  prior  insurance,  419,  420. 


INDEX.  o91 

MARINE  INSURANCE,  continued, 

regulated  by  a  clause  in  the  policy,  419. 

priority  refers  to  time  of  making  insurance,  419. 

effect,  419. 

increase  of  value  after  first  insurance,  419. 

subsequent  policy  may  be  suspended,  420. 

ratable  deduction  of  valuation,  420. 

when  there  is  uo  clause  providing  for  prior  insurance,  insured  may 

elect,  420. 
insurers  contribute  between  themselves,  420. 
simultaneous  insurances,  420. 

parol  evidence  admissible  to  decide  priority,  420,  n.  (5.) 
Of  double  insurance  and  reinsurance,  420,  421. 
no  double  insurance,  unless  subject-matter  is  identical,  a»d  total  valua- 
tion exceeds  the  true  value,  420. 
reinsurance,  when  made,  421. 
OftJie  memorandum,  421,  422. 
origin  and  meaning  of  the  term,  421. 
cargo  arriving  in  specie,  but  valueless,  421,  n.  (5.) 
loss  at  intermediate  port,  421,  n.  (5.) 
articles  and  percentage  vary,  422. 
War7-anties,  express,  422-424. 
how  constituted,  422. 

collateral  description  may  not  be  warranty,  422,  n.  (4.) 
must  be  accurately  complied  with,  422,  423. 
breach  at  commencement  of  the  risk  avoids  the  policy,  423. 

after  the  risk  begins,  without  fault  of  insured,  423. 
usual  subjects,  —  ownership,  423. 

neutrality,  blockade,  423. 
when  there  is  a  trust  for  a  belligerent,  423. 
time  of  sailing,  424. 
"  in  such  a  harbor  or  port,"  or  "  where  the  ship  now  is," 

construction,  424. 
"  warranted  in  port,"  424. 
Of  implied  warranties,  4  24-4  29. 
seaworthiness  presumed  by  law,  424. 

if  broken  at  the  outset,  policy  does  not  attach,  425. 

subsequent  breach,  425. 

evidence  of  unseaworthiness,  425,  n.  (6.) 

policy  may  be  suspended  by  neglect,  425,  426. 

different  kinds  of  fitness,  426. 

usage  the  only  safe  test,  and  reason,  426. 

same  principle  applicable  where  a  ship  at  sea  is  injured,  427. 

whether  seaworthiness  is  a  condition  precedent,  427,  n.  (2.) 

ship  must  continue  seaworthy,  428. 

in  construction  of  a  time  policy,  427,  428. 

cases  reviewed,  428,  n.  (1.) 


592  INDEX. 

MARINE  INSURANCE,  contained, 

fair  statement  of.risk,  429. 

not  to  deviate,  429. 
Of  misrepresentation  and  concealment,  429-432. 

what  is  a  misrepresentation,  429. 
a  concealment,  430. 

effect,  430. 

inadvertence  or  inattention  no  defence,  430. 

statement  of  belief,  if  proved,  is  a  defence,  431. 

unless  it  would  reasonably  influence  insurers,  431,  n.  (4.) 

answer  to  direct  inquiry  is  material,  431. 

concealment  from  owner  by  master,  431. 

insured  generally  responsible  for  his  agent's  representations,  431. 

secoiffl  insurance  on  a  tainted  policy,  431. 

how  premium  may  be  evidence  of  concealment,  432,  and  n.  (1.) 
Wliat  things  should  be  communicated,  432-434. 

rumors,  the  certainty  of  which  is  not  known,  432. 

intelligence  known  to  clerks  of  insured,  432. 

foreign  laws  material  to  the  risk,  432. 

directions  sent  by  express,  may  indicate  emergency,  432. 

general  principle,  432,  433. 

insured  need  not  state  what  the  insurer  is  bound  to  know,  433. 
matters  of  general  knowledge,  433. 
facts  of  science,  as  geographical  facts,  &c.  433. 

either  party  may  be  put  upon  inquiry,  434. 

intention  to  deviate,  or  partial  damage,  434. 

false  statements  of  fact  and  of  opinion  different,  434. 

representation  construed  liberally,  434. 

substantial  compliance  suflicient,  434. 
Of  the  premium,  435-437. 

when  due,  435. 

if  policy  acknowledge  receipt,  this  may  be  no  bar  to  an  action  for  it,  435 

note  on  time  usually  given,  435, 

risk  must  be  actually  incurred,  435. 

when  to  be  returned,  435. 

passages  "  out  and  home,"  435. 

if  the  whole  risk  attaches  at  all,  there  is  no  return,  43G. 

ratable  return  of  premium,  436. 

insurance  by  agent,  not  authorized,  436. 

note  signed  by  agent  binds  the  principal ;  exception,  436. 

no  return  for  illegality,  if  parties  equally  in  fault,  437. 

Locus  poenitentia;,  437,  n.  (1.) 
percentage  on  returnable  policy  retained,  437. 
premium  set  off  against  loss,  437. 
Of  the  description  of  property  insured,  437-440. 
must  be  sufficient  to  identify,  437. 
mistake  does  not  always  vitiate,  437. 


INDEX.  593 

MARINE  INSURANCE,  continued, 

construction  of  terms  —  "  cargo,"  "  goods,"  "  merchandise,"  438. 
"  property,"  "  ship,"  "  vessel,"  438. 
includes  sextants  and  chronometers,  bank  bills, 
438. 
"  return  cargo,"  "  proceeds,"  "  returns,"  438.       • 
interest  of  the  insured  need  not  be  specified,  438. 
mortgagor,  mortgagee,  assignee,  &c.,  may  insure,  439. 
profits  must  be  specified,  or  included  in  the  valuation,  439. 
open  policy  on  the  ship  does  not  cover  freight,  439. 
freight  from  one  port  to  another  covers  intermediate  dues,  439. 
construction  of  terms,  "to,"  "at  and  from,"  439. 
■what  insured  under  title  of  freight,  440, 
specific  contract  to  carry,  439,  u.  12. 
Perils  covered  hy  ilie  lyoUcy,  440-443. 
enumerated  in  policy,  list  of,  440. 
meaning  of  phrase,  "all  other  perils,"  440. 
insurers  liable  only  for  extraordinary  risks,  440. 
what  are  such,  440,  n.  (3,)  et  seq. 
not  liable  for  -wear  and  tear,  441. 
nor  for  loss  fi'om  badness  of  material,  441. 
nor  for  leakage  or  breakage,  441,  n.  (6.) 
nor  for  loss  from  dampness,  441,  442. 

nor  for  acts  of  the  insured,  or  his  agents  acting  under  directions,  442. 
insurers  liable  for  loss  from  misconduct  of  master  and  crew,  442. 

negligence,  when  remote  cause  of  loss,  442,  n.  (2.) 
may  assume  risks  at  pleasure,  443. 
shipper's  remedy  against  ship-owners  does  not  discharge  the  insurers, 
443. 

if  enforced,  is  to  be  subrogated  to  insurer,  443. 
presumption  against  loss  from  negligence,  443. 
Of  the  perils  of  the  sea,  443-445. 
include  only  extraordinary  losses,  443,  444. 
not  destruction  by  worms,  444. 

nor  by  rats,  —  cases  considered,  444,  n.  (3.) 
cats  on  board,  444,  n.  (3.) 
nor  delays  in  harbor  by  being  frozen  in,  444. 
presumption  of  loss  by  perils  of  the  sea,  when  ship  is  not  heard  from, 

445. 
no  fixed  period  after  which  such  presumption  arises,  445,  n.  (2.) 
Of  collision,  445,  446. 
how  far  insurers  are  liable,  445. 
conflict  of  decisions  in  U.  S.  and  England,  446. 
Offre,  446,  447. 
must  be  extraordinary  peril,  or  insurers  are  not  held,  446. 
master  and  crew  may  burn  the  ship,  to  prevent  capture,  446. 
how  far  insurers  are  liable  for  consequences,  446. 
50* 


594  INDEX. 

MARINE  INSURANCE,  continued, 

goods  injured  by  water  thrown  to  extinguish  fire,  447,  n.  (1.) 
Of  piracy,  rohhery  and  theft,  447,  448.. 
violence  essential  to  piracy  and  robbery,  447. 
may  be  committed  by  crew,  447. 

phrase,  "assailing  thieves,"  447. 
mutiny,  —  case  of  coolies,  447,  n.  (3.) 
theft  after  shipwreck,  448. 
Of  barratry,  US-i50. 
construction  of  the  term  doubtful,  448. 

trading  with  an  enemy  may  be  barratry,  448,  n.  (5.) 
mere  negligence  may  be  barratrous,  448. 

sailing  against  directions  of  pilot,  449,  n.  (1.) 
master  cannot  commit  barratry,  if  part-owner,  449. 
nor  if  the  owner  consents,  449. 
may  as  against  charterer,  449. 
provided  against  in  policy,  when  insured  is  ship-owner,  449,  450. 

eSect  of  such  provision,  450. 
general  rule  as  to  liability,  450. 
Capture,  arrest  and  detention,  450,  451. 
construction  of  usual  provision,  450. 

•'  people,"  "  capture,"  "  seizure,"  "  detention,"  "  arrest," 
450,451. 
General  clause,  451. 
construction,  451. 

phrase,  "  against  all  risks,"  451. 
Prohibited  trade,  452,  453. 
distinguished  from  contraband  trade,  452. 
belongs  to  times  of  peace,  452. 
when  illegal  as  to  insurers,  452. 
usually  excepted  against,  452. 
■when  it  discharges  insurers,  452,  453. 
intermixture  of  risks  producing  loss,  453. 
Deviation,  454-458. 

what  it  is,  and  why  it  discharges  insurers,  454. 

may  be,  while  the  ship  is  in  port,  454. 
no  change  of  risk,  is  deviation,  unless  without  necessity,  454. 
necessity  determined  from  circumstances,  454. 
variation  of  course  to  avoid  ice,  or  capture,  454,  n.  (5.) 
if  only  temporary,  will  not  discharge  insurers,  454,  455. 
seldom  can  be  so,  455. 
length  of  time  is  not  essential,  455,  n.  (1.) 
is  an  unnecessary  departure  from  the  usual  course,  if  there  be  a  usage, 
455. 

if  no  usage,  mere  mistake  is  not,  455. 
insurers  entitled  to  the  exercise  of  the  master's  best  discretion,  455. 
unnecessary  protraction  of  voyage  is  deviation,  455. 


INDEX.  595 

MARINE  INSURANCE,  continued, 

liberty  policies,  455. 

construction  of  phrases,  —  "  enter,"  "  toucli,"  "  stay,"  "  remain,"  "  enter 
and  stop  at,"  450. 

delay  or  change  of  course  to  save  life  or  help  the  distressed,  is  not  devi- 
ation, 45G. 

medicines  proved  to  be  on  board,  but  insufficient,  456,  n.  (3.) 

otherwise,  if  only  to  save  property,  456. 

in  what  order  and  what  ports  ship  may  visit,  457. 

of  substitution  of  new  for  old  voyage,  457. 

of  intention  to  deviate,  457,  458. 
0/  the  termini  of  the  voyage  and  of  the  risJc,  458-461. 

•when  policy  void  for  indistinctness,  458. 

when  policy  takes  effect,  or  is  annulled  by  delay,  458. 

retrospective  force  of  "  lost  or  not  lost,"  458. 

insurance  may  be  valid,  though  extent  of  loss  not  known,  458. 

meaning  of  "  from  and  after,"  and  such  terms,  459. 

meaning  of  "  at,"  of  "  to,"  and  "  from,"  in  different  policies  for  same 
voyage,  459. 

when  risk  begins,  time  and  place  being  stated,  which  controls,  459. 

meaning  of  word  "  port,"  459. 

"at  and  from  "  cover  a  vessel  while  In  port,  460. 

"at  and  from"  don't  cover  goods  until  in  some  way  waterborne,  460. 

such  policy  covers  goods  on  lighters  or  boats,  460. 

"at "may  include  all  parts  of  an  Island,  460. 

meaning  of  "  to  a  port  and  a  market,"  460. 

meaning  of"  a  port  of  discharge,"  or  "  final  port  of  discharge,"  460. 

when  "  at  sea  "  means  not  In  port,  461. 

when  "  if  at  sea  "  means  if  not  at  home,  461. 

how  long  after  arrival  in  port  insurance  continues,  461. 

policy  covers  what  perils  and  for  what  time  in  port,  461. 
Of  total  loss  and  abandomnent,  462-478. 

meaning  of  "  constructive  "  and  "  total,"  462. 

of  a  constructive  total  loss,  463,  and  n.  (1.) 

whether  notice  of  abandonment  must  be  given,  463,  n.  (1.) 

effect  of  an  abandonment,  463. 

need  not  abandon,  but  claim  for  partial  loss,  463. 

when  an  abandonment  Is  operative,  463. 

1.  of  necessity  of  abandonment,  464. 
when  not  needed,  464. 

rights  of  insured  when  he  pays  loss,  464. 

whether  needed  when  ship  has  been  sold,  464,  and  n.  (4.) 

at  whose  risk  things  saved,  465. 

2.  of  right  of  abandonment,  465. 

whether  can  be  made  unless  half  property  is  lost,  465. 
when,  If  ship  arrives  at  destined  port,  465,  n.  (3.) 
meaning  of,  "  one  third  new  for  old,"  465. 


596  INDEX. 

• 

IMARINE  INSURANCE,  continued,  • 

■whether  repairs  must  amount  to  75  per  cent.,  4G6, 
what  is  included  in  the  estimation  of  the  loss,  466. 
■whether  premium,  salvage,  average   contribution,  "wages  for   making 

repairs,  loss  by  jettison,  4G6. 
■when  ship  sold  on  bottomry  bond  may  be  abandoned,  467. 
sale  by  necessity  may  be  regarded  a  total  loss,  467. 
of  a  separate  abandonment  of  separate  interests,  467. 
of  the  exercise  of  the  right  of  abandonment,  468. 
only  person  having  title  to  property  can  abandon,  468. 
ho^w  abandonment  made,  468. 

insurers  may  -waive  by  deficiency  in  form  of,  469.  . 

■R'hen  may  abandon,  469. 

abandonment  made  on  supposed  facts,  void,  469. 
once  rightfully  made,  it  is  conclusive,  469. 
no  right  of  instant  abandonment,  470. 
may  "when  voyage  broken  up  by  certain  perils,  470. 
effect  of  making  any  delay  to  abandon,  470. 
■what  is  a  reasonable  time  in  ■\vhich  to  abandon,  470,  n.  (5.) 
■whether  a  general  rumor  •will  authorize  an  abandonment,  471. 
insurers  by  payment  are  entitled  to  "what  is  saved,  and  all  rights,  claims 

or  interests  of  insured,  471. 
■whether  entitled  to  mortgagee's  claim,  471. 
liens  on  things  o'wed  must  be  paid  by  insured,  -when,  471. 
■what  expenses  in  saving  ship  the  insurers  are  liable  for,  472. 
■when  owner,  master,  trustees  and  agents  for  insui-ers,  472. 
owner  liable  for  bad  faith  of  master  as  to  abandoned  .property,  472. 
when  goods  are  totally  lost,  472. 
of  the  fifty  per  cent,  rule,  when  it  applies,  473. 
when  ship  is  lost,  duty  of  master  to  forward  goods,  473. 
goods  damaged  by  fault  of  master,  insurers  not  liable,  473. 
when  shippers  claim  against  ship-owner  passes  to  insurers,  473. 
of  loss,  when  several  shipments,  473. 
master  may  sell  or  hypothecate  goods,  when,  474. 
when  freight  lost,  474. 

when  freight  may  be  abandoned  with  ship,  474. 
when  owner  may  retain  cargo  until  ship  is  repaired,  474. 
when  insurers  only  liable  for  expense  of  transshipping,  475. 
rule  of  fifty  per  cent,  applies  to  freight,  475. 
pro  rata  freight  less  than  half  a  total  loss  by  construction,  475. 
so  if  part  cargo  lost  and  rest  transshipped,  475. 
freight  only  lost,  when  goods  cannot  be  delivered,  475. 
freight  earned  before  abandonment  goes  to  insurers  on  freight,  that 

after  to  insurers  on  ship,  475. 
French  law  reverse,  perhaps  English,  476,  n,  (1.) 
Of  revocation  of  abandonment,  4  76,  4/7. 
irrevocable  when  accepted,  476. 


INDEX.  597 

MARINE  INSURANCE,  continued, 

how  revocation  and  assent  may  be  made,  47G. 

subsequent  events  cannot  annul  abandonment,  476. 

only  appearances  carefully  considered  can  authorize  an  abandonment, 

477. 
Of  general  average,  477. 
the  rule  of,  477. 

how  far  loser  is  to  be  indemnified,  477, 
how  adjustment  made,  4  77. 

liability  of  insurers  when  property  insured  or  that  not  insured  contri- 
butes, 478. 
essentials  of  a  general  average  loss,  478. 
what  is  a  common  peril,  how  determined,  478. 
when  full  value  of  thing  lost  is  paid,  478. 
loss  must  be  voluntary  to  save  something,  479. 
when  property  saved  contributes,  479. 
of  jettison,  479. 

what  contribution  when  goods  jettisoned  are  recovered,  479. 
ship  and  cargo  contribute  for  goods  jettisoned  from  a  boat,  480. 
when  contribution  for  sacrifice  of  deck  goods,  480. 
loss  of  boat  gives  no  claim  for,  480. 

goods  estimated  by  their  value  at  time  of  their  sacrifice,  480. 
when  no  contribution  for  captured  propei'ty  jettisoned,  481. 
contribution  for  loss  coming  naturally  from  voluntary  sacrifice,  481. 
when  contribution  for  freight,  481. 

all  saved  must  contribute  for  loss  of  ship  purposely  stranded,  481. 
not  so  if  inevitably  stranded,  481. 

getting  oflT  stranded  ship  Is  a  case  of  general  average,  481. 
when  contribution  for  loss  during  landing  property,  481. 
contribution  for  all  expenses  for  repairs  to  cargo  or  goods,  482. 
expenses  in  recovering  captured  ship,  &c.  contributed  for,  though  ship 

not  saved,  482. 
actors  in  case  of  distress  are  agents  of  all  interested  in  property  in 

peril,  482. 
contribution  for  salvage,  482. 

insurers  liable  for  loss  of  funds  raised  by  bottomry,  &c.,  482. 
contributory  value  is  the  value  when  saved,  483. 
rule  to  determine  contributory  value  of  ship,  483. 
what  expenses  deducted  from  value  of  ship  when  she  arrives  in  port, 

483. 
what  deduction  to  be  made  from  freight  to  determine  its  contributory 

value,  483. 
custom  of  deducting  one  third  gross  freight  instead  of  various  charges, 

483. 
of  particular  average,  483. 
Of  partial  loss,  484-486. 
principal  questions  grow  out  of  rule  "  one  third  new  for  old,"  484. 


598  INDEX. 

MARINE  INSURANCE,  continued, 

the  third  deducted  from  what  expenses,  484. 

of  two  ways  of  making  deduction,  484. 

if  ship  is  only  insured  for  half  of  value,  insurers  only  liable  for  half  of 

partial  loss,  485. 
insurers  liable  only  for  damage  to  goods,  not  for  a  fall  in  market  price, 

485. 
insurers  not  liable  for  loss  from  inherent  defects,  485. 
when  such  to  be  deducted  from  partial  loss  by  sea  peril,  485,  486. 
Of  adjustment,  486,  487. 
of  professional  adjusters,  486. 
when  and  how  adjustment  should  be  made,  486. 
refusal  to  pay  is  a  waiver  of  adjustment,  486. 
refusal  to  pay  renders  adjustment  for  trial  unnecessary,  486. 
of  adjustment  of  loss  which  calls  for  repairs,  486. 
when  insurers  liable  for  more  than  total  loss,  486. 
how,  when  total  follows  partial  loss,  487. 
unpaid  premiums  deducted  from  sum  due  insured,  487. 
what  can  be  made  a  set-off  to  insured's  claim,  487. 
when  premium  note  is  merely  a  valid  contract  and  an  indorsee  must  sue 
in  name  of  insurers,  487. 
MARRIED  WOMAN, 

(See  Parties.) 
MATERIAL  MEN, 

fSee  Shipping.) 
MASTER, 

powers,  duties,  and  habilities  of,  375-385. 
(See  SuippixG.) 
MEMORANDUM, 

(See  IxsuRAxcE.) 
mSREPRESENTATION, 

(Sec  IXSURANCE.) 

MORTGAGE, 

security  for  note  is  good  though  debt  barred  by  statute,  250. 

when  good  in  case  of  usury,  258. 

of  ship  must  be  registered,  329. 
MORTGAGEE  OF  SHIP, 

liabilities  of,  338,  339. 

when  entitled  to  freight,  354. 
MORTGAGOR  AND  MORTGAGEE, 

interest  of,  may  be  insured,  408,  413. 

(See  Marine  and  Fire  Insuraxce.) 


N. 
NECESSARIES, 

who  can  only  contract  for,  6,  286. 


ii^DEX.  599 

NEGOTIABLE  PAPER, 

Of  ilie  imrpose  of,  and  parties  to  hills  and  notes,  84-80. 

origin  and  character  of  negotiable  paper,  84. 

definition  of  each  part  of  negotiable  bills,  84. 
"        "     ."       "     «         "  notes,  85. 

not  complete  until  delivery,  85,  and  n.  (2.) 
What  essential  to  a  hill  or  note,  86-96. 

1.  That  the  promise  he  ahsoMie  and  definite,  86-88. 

no  particular  form  of  words  necessary,  86. 

time  of  payment  must  not  be  uncertain,  86. 

the  amount  must  be  capable  of  being  made  deinite,  87. 

must  be  payable  in  money  only,  87. 

materials  of  which  a  bill  or  note  may  be  made,  87. 

what  form  it  may  be,  88. 

written  words  control  figures,  88. 

omission  of  the  words  "dollars,  &c."  may  be  supplied,  88. 

2.  The  payee  must  he  designated,  88,  89. 

latent  ambiguity  may  be  explained,  88. 
payable  to  nobody,  it  is  invalid,  88. 
of  a  note  payable  to  a  fictitious  payee,  89. 
of  a  blank  for  payee's  name,  89. 

3.  Of  amhiguous  and  irregular  instruments,  89,  90. 

distinction  between  a  promissory  note  and  a  bill  of  exchange,  89. 
when  the  instrument  may  be  either,  the  holder  may  elect,  89. 
what  instruments  are  similar  to  both,  90. 

4.  Of  blank  notes,  90. 

definition  of,  90. 

of  holder's  title,  90. 

can  be  bequeathed,  90. 

are  a  good  tender,  90. 

bills  of  a  bank  which  has  failed,  90. 

5.  Of  checks  on  hanks,  90-92. 

are  bills  of  exchange  somewhat  qualified,  91. 
should  be  presented  within  what  time,  91. 
when  drawing  a  check  is  a  fraud,  91. 
how  a  check  may  be  accepted,  91. 
to  whom  checks  are  usually  made  payable,  92. 
•  when  a  check  is  payment,  92. 

effect  of  drawer's  death  on  checks,  92. 
of  a  forged  bank  check,  92. 

6.  Of  accommodation  paper,  93. 

rights  and  liabilities  of  parties  to  it,  93. 

7.  Of  foreign  and  inland  bills,  93,  94. 

difierence  between  them,  93. 
how  and  when  protested,  94. 

8.  Of  the  law  ofjylace,  94-96. 

when  an  indorsement  is  void,  94, 


600  INDEX. 

NEGOTIABLE  PAPER,  continued, 

law  of  -what  place  governs,  95. 

questions  of  remedy  determined  by  law  of  place,  95,  and  n.  (7.) 
Of  consideration,  96. 

1.  Exception  to  the  common-law  rule,  in  the  ccise  of  nerjotiable  paper, 
25,  96,  97. 

when  and  between  what  parties  consideration  is  necessary,  97. 
when  consideration  must  fe  proved,  97. 

2.  Of  value  received,  98. 

force  and  meaning  of  this  expression,  98. 

3.  Wh9.t  the  consideration  may  he,  98,  99. 

of  a  moral  consideration,  98. 
what  are  illegal  considerations,  99. 
Of  the  rights  and  duties  of  the  maker,  99. 
of  obligation  to  pay,  99. 

to  what  parties  the  usual  defences  may  be  made,  99. 
Of  the  rights  and  duties  of  the  holder  of  negotiable  paper,  100-120. 

1.  What  a  holder  may  do  with  a  bill  or  note,  100,  101. 

whom  the  holder  may  sue,  100. 

whom  he  may  compel  to  indorse,  1 00. 

effect  of  a  holder  indorsing  to  a  pi-ior  indorser,  100. 

of  a  note  intrusted  to  a  collector,  101. 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper,  101-103. 

to  what  defences  is  the  holder  open,  101,  and  n.  (5.) 

when  note  on  demand  is  overdue,  102. 

when  a  check  is  dishonored,  103. 

sending  back  a  bill  or  note  destroys  title,  103. 

3.  Of  presentment  for  acceptance,  103-105. 

consequences  of  a  delay  to  present,  103. 

difference  between  notes  and  bills,  on  demand,  104. 

what  are  business  hours,  104. 

what  will  excuse  delay,  104. 

what  is  reasonable  in  presenting  and  accepting  a  bill,  104,  105. 

4.  Of  "presentment  for  demand  of  payment,  105-110. 

how  and  to  whom  demand  should  be  made,  105. 

whether  death  or  insolvency  ever  excuses  non-demand,  105,  106. 

what  will  excuse  non-presentment,  106. 

when  must  be  presented  in  case  of  holiday,  106.  t 

are  due  when,  107. 

when  notes  on  demand  should  be  presented,  107,  and  n.  (5.) 

when  should  a  check  be  presented,  108. 

should  be  demanded  at  what  place,  108,  and  n.  (4.) 

what  is  a  sufficient  demand  in  particular  cases,  109,  110. 

5.  Of  protest  and  notice,  110-120. 

how  protested  and  notice  given,  110,  111. 

according  to  laws  of  place  at  which  payable,  110,  111. 

how,  when  a  bill  is  lost,  111. 


nni 


IXDEX.  601 

NEGOTIABLE  PAPER,  conimued, 

eflect  of  notarial  seal,  111. 

■why  notice  is  to  be  given  to  all  antecedent  parties,  112. 

of  the  form  and  character  of  the  notice,  112. 

how  notice  should  be  sent  and  directed,  113,  11-1,  and  n.  (5.) 

how  when  the  parties  live  in  the  same  town,  114,  115,  and  n.  (1.) 

notice  must  be  proved,  115. 

notice  bj'  whom  made,  116. 

to  whom  notice  should  be  given^lG. 

of  joint  parties  only  one  need  be  notified,  117. 

when  a  transferrer  by  delivery  should  have  notice,  117. 

who  are  discharged  by  non-notice,  117. 

of  waiver  of  notice,  118. 

diflfereuce  between  waiver  of  notice  and  waiver  of  demand,  118. 

when  delay  in  notifying  is  excused,  119. 

when  non-notice  is  cured  by  a  subsequent  promise,  119. 
Of  the  rights  and  duties  of  an  indorse)',  120-128. 
who  may  indorse,  1 20. 

eiFect  of  an  indorsement,  120,  and  n.  (4.)  • 

when  indoi'ser  only  bound  as  guarantor,  121. 
what  verbal  corrections  in  a  note  may  be  made,  122. 
dilference  between  a  blank  and  full  indorsement,  122. 
how  a  blank  indorsement  may  be  filled  up,  122. 
land  fide  purchaser  of  a  stolen  note  has  a  good  title,  123,  and  n.  (4.) 
joint  payees  must  all  indorse,  124. 
effect  of  the  words  "  without  recourse,"  82,  124. 
of  a  conditional  indorsement,  124. 

the  acceptance  admits  the  signatures  of  what  parties,  124. 
of  striking  out  an  indorsement,  124. 
of  transfer  by  delivery,  125. 

of  indorsement  on  blank  paper,  or  before  or  after  acceptance,  126. 
when  does  a  note  cease  to  be  negotiable,  127. 
of  transferring  a  portion  of  a  negotiable  bill,  127. 
when  personal  representatives  may  transfer,  127. 
Of  the  rights  and  duties  of  the  acceptor,  128-131. 
how  and  upon  what  acceptance  may  be  made,  128. 
may  be  made  by  parol,  but  not  by  mere  detention,  129. 
efi'ect  of  an  acceptance,  129. 
of  a  banker's  liability  without  acceptance,  130. 
of  acceptance  by  joint  drawers,  130. 
of  acceptance  after  maturity,  130. 
where  cancelling  the  acceptance  is  effectual,  131. 
effect  of  receiving  a  greater  security  from  acceptor,  131. 
of  a  qualified  acceptance,  131. 
by  whom  a  bill  may  be  accepted,  131. 
Of  acceptance  for  honor,  131-133. 
it  must  be  distinctly  stated  whether  for  drawer  or  indorse*,  131. 

51 


602  INDEX. 

NEGOTIABLE  PAPER,  continued. 

character  and  eifect  of  an  acceptance,  supra  pi'otest,  132. 
NEW  PROMISE, 

(See  Limitations.) 
NOTICE, 

(See  Negotiable  Paper,  Carriage  of  Goods,  Insurance.) 


^^  P. 

PARTIES, 

who  may  be  parties  to  mercantile  contracts,  3,  4. 
from  what  causes  incapacity  to  contract  may  arise,  4. 
0/ infants,  4-9. 
incapacity  of,  to  contract,  4. 
who  are  infants,  4. 

contracts  of,  when  held  void,  4,  n.  (4.) 
when  voidable,  how  annulled  or  confirmed,  4,  5. 
of  ratification,  4,  n.  (5.) 
what  amounts  to,  4,  5,  and  notes. 

whether  a  sealed  instrument  may  be  ratified  by  parol,  4,  n.  (5.) 
when  and  to  whom  ratification  must  be  made,  5,  n.  (L) 
must  be  voluntary,  5. 
mere  silence  no  disaffirmance,  G. 

neglect  to  disaffirm,  with  other  facts,  may  be  equivalent  to,  6, 
what  act  of  ownership  is  a  confirmation,  6. 
contract  for  necessaries  valid,  6. 
why  the  law  makes  this  exception,  6. 
what  are,  and  what  are  not,  necessaries,  7. 
contracts  of,  for  necessaries  inquirable  into,  7, 
only  valid  for  their  true  value,  7. 
cannot  enter  into  contracts  of  trade,  7. 
cannot  avoid  a  contract  and  then  make  any  use  of  it,  8. 
liable  for  falsely  representing  himself  to  be  an  adult,  whereby  others  are 

induced  to  contract  with  him,  8,  9. 
disaffirmance  of  sale  requires  a  redelivery  of  purchase-money  received,  8. 
cannot  a^er  majority  demand  money,  paid  while  an  infant,  for  things 

which  he  has  disposed  of,  8. 
can  recover  on  quantum  meruit  for  service,  8. 
his  contracts  voidable  only  by  him  or  his  legal  representatives,  8. 
an  injured  party  can  make  the  same  defence  against  infants  as  any 

others,  9. 
Of  married  iconien,  9-13. 
marriage  passes  all  the  property  and  interests  of  the  feme  sole,  9,  10. 
how  he  may  reduce  her  cJioses  in  action  into  possession,  10. 
revival  of  her  rights  of  property  by  husband's  death,  10. 
liabilities  of  feme  sole  transferred  to  the  husband  by  marriage,  11. 
revival  of  such  liabilities  on  husband's  death,  11,  n.  (5.) 


INDEX.  cm 

PARTIES,  continued. 

modification  of  those  rights  and  liabilities  by  statutes,  11. 
of  the  agency  of  a  feme  covert,  12. 
of  her  rights  and  liabilities  as  a  sole  trader,  12,  13. 
PARTNERSHIP, 

What  constitutes  a  partnership,  164,  1G5. 
Avhat  joint  transactions  are  not  partnerships,  1G4. 
who  may  be  partners,  165. 
How  a  partnership  may  he  formed,  165-169. 

no  especial  form  or  manner  necessary,  165,  and  n.  (1.) 

begins  when,  165. 

how  partners  may  regulate  their  rights  and  liabilities,  165. 

when  special  agreements  valid  as  to  third  parties,  166. 

general  liabillly  of  each  partner,  166. 

when  special  provisions  waived  by  neglect,  166. 

when  partners  as  to  third  parties,  but  not  inter  se,  166. 

how  to  determine  this,  167. 

of  a  secret,  dormant,  and  nominal  partner,  167. 

test  of  membership  in  a  mercantile  firm,  167. 

whether  a  clerk  or  salesman  is  a  partner,  how  determined,  168,  and 

n.  (2.) 
factors  and  brokers  not  partners,  169. 
of  the  name  of  the  partnership,  169. 
Hoio  a  partnership  inay  he  dissolved,  169-172. 
by  a  special  agreement  to  that  effect,  169. 
by  either  partner  at  his  pleasure  by  assignment,  169. 
of  transferring  shares  in  a  partnership,  170. 
by  death,  insanity,  or  fraud  of  any  partner,  170,  171. 
when  equity  decrees  an  account,  171. 
by  an  execution  issued  against  copartner's  interest,  171. 
by  the  retirement  of  one  partner,  171. 
what  partners  must  give  notice  of  their  retirement,  172. 
Of  the  property  of  the  partnership,  172-174. 
may  be  real  as  well  as  personal  estate,  172. 

partnership  real  estate  treated  as  personal  property,  172,  and  u.  (4.) 
of  the  surplus  real  estate  after  adjustment,  1 73. 
I  of  improvements  made  with  partnership  funds,  174. 

when  a  purchaser  of  partnership  property  is  protected,  1 74. 
Of  the  authority  of  each  partner,  and  the  joint  liability  of  the  iKirlnership, 

174-180. 
how  far  is  one  partner  an  agent  for  the  partnership,  174. 
how  far  in  making  assignments.  Indorsing  notes,  &c.,  175,  and  n.  (1.) 
how  fraud  or  negligence  of  a  partner  affects  a  third  party,  175. 
one  cannot  bine?  the  firm  by  a  guaranty,  submission  to  arbitration?  &c., 

1  76,  and  n.  (1.) 
whether  one  partner  may  bind  the  rest  by  an  instrument  under  seal, 

176. 


604  INDEX. 

PARTNERSHIP,  continued. 

whether  a  majority  may  conclusively  bind  the  minority,  177. 

partners  must  act  as  such  to  bind  each  other,  177. 

when  the  name  of  the  firm  does  not  bind  all  the  firm,  177. 

when  persons  are,  and  when  not  jointly  liable  as  partners,  177,  178. 

effect  of  introducing  a  new  member,  178. 

wherein  notice  to  or  by  one  partner  binds  all,  1 78. 

when  borrowing  by  one  partner  creates  a  partnership  debt,  178,  and 
n.  (7.) 

of  the  liability  of  the  firm  when  a  fraudulent  party  deals  with  it,  180. 

when  the  criminal  or  wrongful  acts  of  a  partner  bind  the  firm,  180. 

whether  the  promise  of  an  ex-partner  will  take  a  case  out  of  the  Statute 
of  Limitations,  180. 
Remedies  of  partners  against  each  oilier,  181-184. 

when  one  partner  may  sue  another,  181,  182,  and  n.  (2.) 

of  the  jwwer  of  equity  to  settle  accounts,  181,  182,  and  n.  (1.) 

one  cannot  demand  specific  contribu^on  of  another,  183. 

when  one  firm  cannot  sue  another,  183. 

when  a  firm  cannot  sue  a  third  party,  184. 

of  good  faith  between  copartners,  184. 
Rights  of  the  Jinn  against  third  jtarties,  184,  185. 

when  a  firm  may  sue  a  third  party  on  a  private  agreement  with  one  of 
its  members,  184. 

when  a  new  firm  may  sue  a  guarantor,  185,  and  n.  (3.) 
Rights  of  creditors  in  respect  to  funds,  185-190. 

partnership  funds  are  first  liable  for  partnership  debts,  185. 

difference  between  the  claims  of  a  partnership  and  of  a  private  creditor, 
185,  and  n.  (4.) 

effect  of  a  private  creditor's  prior  attachment,  18G. 

whether  a  private  claim  is  preferred  to  a  partnership  claim  against  pri- 
vate propert}',  187,  and  n.  (2,)  188,  and  n.  (2.) 
•    how  much  of  partnership  property  can  be  attached  by  a  private  credi- 
tor, 188. 

how  the  sale  of  an  undivided  interest  of  a  copartner  should  be  made, 
189,  and  n.  (1.) 

of  the  practice  in  different  jurisdictions,  190. 
Of  the  effects  of  dissolution,  190-194. 

property  of  a  deceased  partner  is  kept  by  the  rest  at  their  risk,  190. 

after  dissolution  the  shareholders  are  tenants  in  common,  and  neither 
can  sign  for  the  rest  without  authority,  191. 

whether  equity  will  give  to  partnership  creditors  a  remedy  against  the 
representatives  of  the  deceased  partner,  192,  and  n.  (3.) 

whether  creditors  are  obliged  to  pay  the  member  winding  up  the  affairs 
ofthefirm,  193,  andn.  (3.) 
Of  limited  partnership,  194,  195. 

consists  of  general  and  special  partners,  195. 

liability  of  special  partners,  195. 


INDEX.  605 

PART-OWNERS, 

(Sec  SiiipriNG.) 
PART-PAYMENT, 

(See  LiMiTATioxs.) 
PASSENGER  CARRIER, 

obligations  of,  205,  n.  (7,)  218,  221,  225,  22G. 
PAYMENT, 

IIow pajjments  may  he  made,  80-82. 

by  a  bill,  bv  cancelling  or  in  ^\\y  specific  manner  agreed  upon,  80,  and 

.    "-^--^ 

if  not  by  agreement,  it  must  be  by  cash,  80. 

what  is  a  good  legal  tender,  81. 

of  an  informality  in  the  tender,  81. 

a  tender  with  ^ny  condition  is  not  good,  81. 

the  force  of  a  receipt,  81. 

the  effect  of  paying  the  money  into  court,  81. 

giving  a  negotiable  note  or  bill  is  not  an  absolute  payment,  82. 

a  bill  which  the  receiver  has  negotiated  without  recourse,  is  payment,  82, 

124. 
Of  aj)propriation  of  payment,  82,  83. 
to  which  debt  shall  a  payment  be  appropriated,  82. 
when  payor,  and  when  receiver  shall  appropriate,  83. 
if  neither  does  at  the  time  of  payment,  how  will  the  law  appropriate 

it,  83. 
PERILS, 

covered  by  policy,  440-443. 
of  the  sea, 443-445. 

(See  Iksuraxce.) 


PILOTS, 
PIRACY^ 
POLICY, 
PREMIUM, 


(See  Shipping.) 

(See  Marine  Insurance.) 

(See  Marine,  Fire,  and  Life  Insurance.) 

(See  Insurance.) 


PRESENTMENT, 

for  acceptance,  103-105. 

for  demand  of  payment,  105-110. 

(See  Negotiable  Paper.) 
PRINCIPAL, 

(See  Agency.) 
PRIVATE  CARRIER, 

(See  Carriage  of  Goods.) 
PROHIBITED  TRADE, 

(See  Marine  Insurance.) 
51* 


606 


INDEX. 


PROMISES, 

original  and  collateral, 

(See  Guaranty,  Statute  of  Frauds.) 
of  one  of  several  joint  debtors,  240,  241. 
PROMISSORY  NOTES, 

(See  Negotiarle  Paper.) 
PROOF, 

(See  Insurance.) 
PROTEST  AND  NOTICE,  110-120. 

(See  Negotiable  Paper.) 
PROVISIONS, 

(See  Seamen.) 
PUNISHMENT, 

(See  Seamen.)  ^ 


RAILROADS, 

liability  of,  228. 
RANSOM, 

(See  General  Average.) 
RATIFICATION, 

by  infant,  4,  n.  (5.) 
by  principal,  138. 
of  bargain  to  insure, 

(See  Infants  and  Agency.) 
REAL  PROPERTY, 

(See  Partnership.) 
REGISTRATION, 

(See  Shipping.) 
REINSURANCE, 

(See  Fire  Insurance.) 
REMEDIES, 

of  partners,  181-184. 
REPRESENTATION, 


RESPONDENTIA,  380. 

RESTRICTIONS, 

in  policies, 

RISK, 
ROBBERY, 


(See  Warranty.) 
(See  Shipping.) 

(See  Insurance.) 

-  (See  Insurance.) 

(See  Marine  Insurance.) 


INDEX.  607 


s. 

SALE, 

of  notes,  ■whether  usurious,  2G5-2G8. 

(See  Lntekest  and  Usury.) 
SALES, 

What  constitutes  a  sale,  41-43. 

distinction  between  a  sale  and  an  agreement  for  a  future  sale,  41. 
defiuition  of  a  sale,  41. 
essentials  of,  42. 

does  not  depend  upon  delivery  and  payment,  42,  and  n.  (1.) 
when  the  vendor  may  avoid  the  sale,  43. 

effect  of  giving  credit,  or  receiving  earnest  or  part-payment,  43. 
Of  the  rights  of  property  and  of  possession,  43-49. 
the  legal  meaning  of  the  word  property  as  distinguished  from  possession, 

43. 
■when  these  two  characteristics  of  ownership  are  separated,  44. 
"when  the  vendor  has  a  right  to  retain  the  goods  sold,  44. 
character  of  this  lien,  44. 

lost  by  an  intentional  and  absolute  delivery  of  the  goods,  45. 
"what  symbolical  or  constructive  deliveries  are  sufficient,  45,  and  n.  (4.) 
lien  may  be  preserved  by  express  agreement,  45. 
when  the  vendor  may  resell  the  goods  sold  to  the  vendee  as  his  trustee, 

AG. 
consequences  of  non-payment  and  of  non-delivery,  46. 
^  sale  can  be  made  only  by  an  owner,  and  not  by  a  mere  possessor  of 

goods,  47. 
what  exceptions  to  this  rule,  4  7. 
of  conditional  sales,  4  7. 
when  the  performance  of  the  condition  is  necessary  to  the  completion  of 

the  sale,  47,  48,  and  n.  (2.) 
when  the  sale  Is  complete,  49. 
of  a  contract  for  a  future  sale,  49. 
can  be  made  for  things  not  now  existing,  49. 
price  must  be  capable  of  being  ascertained,  49,  and  n.  (4.) 
Of  deliver?/  and  its  incidents,  50-54. 
what  is  a  sufficient  delivery,  50. 
physical  delivery  not  always  necessary,  50. 
delivery  by  indorsement  of  bill  of  lading,  50,  n.  (2.) 
responsibility  of  seller  before  delivery,  51. 

how  shall  the  seller  send  the  goods  to  the  buyer,  51,  and  n.  (3.) 
sale  Avithout  delivery  avoided  as  to  third  parties  by  fraud,  51,  52. 
when  the  property  passes  from  the  seller,  and  he  becomes  a  bailee,  52. 
a  mistake  in  description  of,  or  any  deficiency  in  goods,  52,  53. 
when  this  objection  is  waived,  53,  and  n.  (2.) 
whether  there  is  one  or  several  sales  when  several  things  are  bought  at 

the  same  time,  53,  54. 


G08  INDEX. 

SALES,  continued. 

of  the  right  of  redelivery,  and  when  exercised,  54. 
Of  contracts  void  for  illcgalitij  or  fraud,  54-5G. 

of  "contracts  partially  illegal,  54. 

of  the  validity  of  contracts  for  a  future  sale,  55,  and  n.  (3.) 

fraud  vitiates  every  contract,  55. 

an  Innocent  third  party  may  purchase  of  a  fraudulent  buyer  and  acquire 
a  good  title,  56. 

when  the  defrauded  party  must  annul  the  sale,  56. 

how  this  right  to  annul  may  be  waived,  56. 
Of  sales  with  warranty,  57-59. 

warranties,  gfeneral  and  particular,  express  and  implied,  57. 

what  expression  during  the  sale  constitutes  a  wari-anty,  57. 

vendee  may  return  articles  for  fraud  or  unfitness,  but  not  for  a  breach 
of  waiTanty,  58. 

warranty  of  title  when  implied,  58. 

warranty  of  fitness  when  Implied,  59,  and  n.  (2.) 
SALVAGE, 

contribution  for,  482. 
SEAMEN, 

(See  SnipPixG.) 
SEAWORTHINESS, 

(See  Seamkx.) 
SHIPPING,  325. 

Of  the  ownership  and  transfer  of  ships,  325-328. 

ships  are  personal  property,  325. 

how  ownership  and  transfer  of,  regulated,  325. 

of  the  statute  for  registration,  325. 

registration  not  required,  326. 

what  ship  may  be  I'egistered,  326. 

when  ship  is  forfeited  by  transfer  of,  to  an  alien,  326. 

fraudulent  registration  forfeits  the  ship,  327. 

of  exclusive  privileges  granted  to  registered  ship,  327. 

protection  of  national  papers  on  registration,  328. 
Of  the  transfer  of  property  in  a  ship,  328-333. 

of  the  necessity  of  a  bill  of  sale,  328. 

transferree  has  no  right  to  claim  new  register  from  oral  transfer,  328. 

of  the  validity  of  oral  translcrs,  328,  n.  (2.) 

dlfTerencc  between  English  and  American  Registry  Act,  329. 

no  bill  of  sale,  mortgage,  &c.,  valid  unless  recorded,  Act  1850,  329. 

effect  of  this  statute  on  oral  transfers,  330. 

how  State  statutes  for  recording  effected  by  this  statutif,  330,  and  n.  (1.) 

delivery  of  possession  is  necessary  and  how  done,  330. 

of  two   Innocent   purchasers    how  can   the   second   complete  his   title 
against  the  other  first,  331,  and  n.  (1.) 

meaning  of  the  word  ship  and  appurtenances,  &c.,  332,  and  n.  (1.) 

whether  boat  and  cables,  &c.,  are  Included,  332,  n.  (1.) 


IXDEX.  609 

SHIPPING,  continued, 

of  the  purchase  of  a  ship  by  instalments  as  it  is  made,  033. 

of  a  sale  by  decree  of  Admiralty,  333. 

of  Admiralty  jurisdiction  to  effect  a  sale,  333,  n.  (2.)  ^ 

Of  part-owners,  334-338. 

three  ways  of  becoming  such,  334. 

when  presumed  to  own  in  equal  shares,  334. 

not  necessarily  partners,  334. 

cannot  sell  the  share  of  another  without  authority,  334. 

after  death  his  share  goes  to  his  representatives,  334. 

majority  may  generally  manage  ship,  335. 

equity  will  prevent  any  injustice,  335,  and  n.  (2.) 

when  a  bond  is  given  to  dissentient  pai'tner,  335,  n.  (2.) 

one,  rest  being  absent,  may  manage  the  ship,  335. 

each  is  bound  for  all  the  repairs,  &c.,  33G. 

whether  a  discharge  after  paying  part  will' protect  him,  33G. 

whether  credit  is  given   to   ship-owners,  or  one  of  them,  and  conse- 
quently some  intentionally  discharged,  336. 

note  of  one  taken  as  payment  and  being  dishonored,  would  not  exon- 
orate  the  rest,  336. 

ship's  husband  is  generally  one  of  the  part-owners,  337. 

how  appointed,  337. 

his  duties,  337. 

what  limitation  to  his  managing  power,  337. 

may  bind  all  part-owners,  338. 

rights  of  third  parties  dealing  with  him,  338. 

all  liable  to  him  in  soUdo,  if  a  part-owner,  338. 

whether  one  part-owner  has  a  lien  on  shares  of  another,  for  balances, 
338,  and  n.  (3.) 
Of  the  liabilities  of  mortgagees,  338,  339. 

liability  of,  338. 

liability,  how  limited  when  in  possession,  339. 
OfiJie  contract  of  bottomry,  339-343. 

purpose  of,  339. 

essentials  of,  339. 

repayment  of  borrowed  money,  how  conditioned,  340. 

lender  may  charge  "  marine  interest  "  to  cover  his  risk,  340. 

when  interest  presumed  to  be  included  In  principal,  341. 

if  lender  takes  marine  interest  and  is  at  no  risk,  this  is  usurious,  341. 

when  lender  may  take  additional  security,  341,  and  n.  (3.) 

how  made  in  Europe,  341. 

in  America  frequently  made  by  owner  in  home  port,  342. 

when  contrivances  to  get  more  than  legal  Interest,  342. 

when  money  payable  on,  342. 

rank  of  the  lien  by  bottomry  bond,  342,  343. 

why  a  later  takes  precedence  of  a  former,  342. 

lien  by  bottomry  depends  in  no  degree  on  possession,  343. 


610  INDEX. 

SHIPPING,  continued. 

distinction  between  mortgages  and  bottomry  bonds,  343. 

Avhcther  bottomry  bonds  must  be  recorded,  343. 
Of  i'^cmploymcnt  of  a  sliip  hij  the  owner,  343-357. 

ship-owner  may  carry  his  own,  and  goods  of  others,  on  freight,  343, 
may  put  it  up  as  a  general  ship,  343. 

different  meaning  given  to  the  word  "  freight,"  343. 

common  meaning,  314. 

of  the  reciprocal  duties  and  obligation  of  ship  and  cargo,  344. 

the  ship  and  ship-owners'  liability,  344. 

lien  on  ship  not  dependent  on  possession,  344,  and  n.  (4.) 

may  be  lost  by  delay,  344. 

liability  of  shipper  and  the  lien  on  his  goods,  345,  and  n.  (1.) 

who  may  be  consignor  or  consignee,  345. 

meaning  of  consignment,  345. 

of  bill  of  lading,  345. 

what  it  should  contain,  345. 

by  whom  and  when  signed,  346. 

how  many  copies  and  how  used,  346. 

of  consignee's  right  to  indorse  or  assign,  346. 

in  whose  name  action  must  be  brought  to  recover  possession  of  goods, 
346. 

how  far  ship-owner  is  bound  as  to  quantity  and  quality  of  goods  by  the 
terms  of  bill  of  lading,  346. 

how  far  when  a  third  party  has  relied  on  Its  terms,  347. 

when  master  can  demand  freight,  347. 

how  his  lien  for  freight  may  be  waived,  347,  and  n.  (6.) 

■what  agreements  are  destructive  of  the  lien,  348. 

what  agreement  to  postpone  i)ayment  of  freight  will,  in  Admlraltj^, 
destroy  lien,  348. 

of  the  entirety  of  the  contract  of  atfrelghtment,  348. 

no  absolute  right  to  freight  unless  goods  are  delivered  per  agreement, 
348. 

when  the  right  and  obligation  of  ship-owner  begins,  348. 

of  the  right,  duty  of  transshipment,  349,  and  n.  (1.) 

when  can  claim  original  freight  and  no  more,  349. 

not  answerable  for  any  delay,  349. 

of  shipper's  right  to  reclaim  his  goods,  349,  and  n.  (3.) 

Avhen  pro  rata  freight  is  due,  350. 

of  the  respective  right  of  the  shipper  and  ship-owner  to  the  goods  dur- 
ing the  voyage,  350,  351,  and  n.  (1.) 

how  pro  rata  freight  determined,  351.  ^ 

of  the  purely  geographical  rule,  351. 

of  the  purely  commercial  rule,  352. 

of  the  customs  of  merchants,  352,  and  n.  (1.) 

liability  of  consignor  for  freight  under  the  usual  bill  of  lading,  352,  and 
n.  (2.) 


INDEX.  611 

SHIPriNG,  conlinued. 

whether  cousignee,  or  his  assigns  liable  for  iVcight,  353. 
Avhen  freight  paid  in  advance  can  be  recovered  back,  353. 
of  freight  paid  by  mistake,  35-1. 
of  tlie  right  of  a  ship's  purchaser  to  freight,  354. 
of  mortgagee's  right  to  freight,  354. 
lender  on  bottomry  bond  no  lien,  354. 
no  freight  earned  by  illegal  voyages,  354. 
■when  freight  due  though  goods  damaged,  354. 
goods  cannot  be  abandoned  for  freight,  354,  and  n.  (C.) 
freight  due  for  goods  -which  cannot  be  delivered,  355. 
■when  damage  to  goods  no  set-oif  to  freight,  355,  35G. 
of  rules  regulating  passage-money,  356. 
Of  charter-parties,  357-367. 
definition  of,  357. 

how  made  -when  o"v\'ner  retains  possession  of  ship,  357. 
when  bills  of  lading  need  not  be  given,  35  7. 
provisions  or  contents  of,  are  what,  357,  358. 
liability  of  charterer,  358. 
what  is  dead  freight,  358. 

evidence  of  fraud  in  the  charter-party  is  admitted,  358. 
whether  ship-owner's  lien  is  lost  by  want  of  possession,  359,  and  n.  (2.) 
no  lien  when  the  charter-party  is  merely  a  personal  contract,  359,  and 

extent  of  lien  of  ship-owner's  on  goods  of  sub-freighters,  360,  and  n.  (1.) 

when  a  voyage  is  double,  361. 

whether  any  freight  is  due  when  ship  is  lost  on  return  voya<Te,  361. 

of  "  lay  days  "  and  demurrage,  3G2. 

what  are  lay  days,  and  when  they  begin,  362. 

whether  Sundays  and  holidays  are  included,  362. 

when  and  how  demurrage  can  be  recovered,  362,  and  n.  (4.) 

though  all  is  lost  after  lay  days  begin,  freight  is  due,  363. 

when  charterer  pays  for  time  while  repairs  are  made,  363. 

for  what  causes  of  delay  the  charterer  is  not  responsible,  363,  364,  n.  (1.) 

when  obliged  to  pay  for  delay  by  seizure,  embargo,  or  capture,  365,  and 

n.  (1.) 
condemnation  of  ship  terminates  contract,  365. 
how  is  a  contract  dissolved  or  suspended,  365,  366. 
contracts  generally  enforced  unless  illegal  or  become  impossible,  36  7, 

and  n.  (1.)  ♦ 

Of  general  average,  367-375. 
meaning  of,  367. 

loss  for  which  contribution  is  made  must  be  voluntary,  367. 
when  ship  or  cargo  is  necessarily  sacrificed  to  save  the  other,  the  saved 

must  contribute,  368. 
whether  general  average  for  voluntary  stranding,  368,  and  n.  (1.) 
for  getting  a  stranded  ship  off",  all  things  saved  must  contribute,  369. 


612  INDEX. 

SHIPPING,  continued. 

wlien  and  Avhat  property  can  be  called  upon  to  contribute,  369. 

when  ransom  is  an  average  loss,  369. 

•when  cutting  away  bulwarks,  369. 

common  sea  or  war  risk,  ground  for  average,  370. 

what  goods  on  deck,  and  jettisoned,  non-contributed  for,  370,  371,  and 

when  contribution  for  repairs  by  all  things  saved,  371,  n.  (2.) 

when  all  expenses  caused  by  delay  for  repairs  contributed  for,  371. 

of  average  in  case  of  a  common  sea  peril,  372. 

of  expenses  during  capture  or  detention,  372,  and  n.  (2.) 

of  rules  or  usages  for  making  contribution,  372,  and  n.  (1.) 

when  masts,  &c.,  lost,  value  of  new,  minus  one  third,  contributed  for,  373, 

n.  (1.) 
only  that  amount  of  freight  earned  contributes,  373,  n.  (1.) 
one  third  deducted  from  gross  freight  for  seamen's  wages,  373,  n.  (1.) 
contributory  value  of  freight  in  case  of  transshipment,  373,  n.  (1.) 
contributory  value  of  cargo  for  goods  jettisoned  when  ship  returns  to 

port  of  dep'arture,  373,  n.  (1.) 
of  the  New  York  rule  of  contribution,  373. 
average  adjustment  at  a  foreign  port  is  of  what  force,  374. 
ports  of  different  States  foreign,  374. 

of  master's  right  to  retain  goods  until  average  contribution  is  paid,  374. 
how  far  one's  loss  made  up  by  average  contribution,  374. 
adjusting  now  a  particular  business,  375. 
French  adjuster  is  called  de2:)acheur,  375. 
Of  the  navigation  of  the  ship,  375-385. 

Of  the  poivers  and  duties  of  master,  375-385. 

command  supreme,  duty  coequal,  375,  and  n.  (1.) 

necessity,  mother  of  much  of  his  authority,  375. 

may  sell  or  pledge  by  bottomry-bond  the  ship,  375. 

may  charter  or  make  rejiairs,  375. 

authority  limited  if  owner  is  present  or  near,  375. 

owner's  liability  for  master's  contracts  in  home  port,  376,  379,  n. 

when  liable  in  a  foreign  port,  376. 

when  the  necessity  authorizes  master  to  sell  ship,  376,  and  n.  (3.) 

when  master  may  from  necessity  hypothecate  ship,  377. 

when  he  may  charter  ship,  378. 

when  necessity  gives  him  power  to  make  repairs,  378. 

of  necessity  which  demands  ready  mc^iey,  378. 

of  master's  right  to  substitute  another  for  himself,  379,  and  n.  (4.) 

when,  may  sell  cargo,  379,  380,  and  n.  (1.) 

of  the  respondentia  bond  and  marine  interest,  380. 

what  necessity  will  authorize  the  making  of  this  bond,  380. 

necessity  gives  no  power  the  scope  of  his  authority,  381. 

of  master's  lien  for  freight,  381. 

extent  of  this  lien,  381. 


INDEX.  G13 

SHIPPING,  continued. 

for  -what  torts  of  master  is  owner  liable,  381. 

his  acts  as  tnaslcr,  careless  collision,  &c.  381. 

not  for  personal  acts,  as  beating  a  man  on  shore,  382. 

when  owner  liable  for  master's  embezzlement,  382. 

owner  not  liable  for  conti'act  which  master  is  not  authorized  to  make, 
382,  n.  4. 

of  loss  by  collision  what  party  liable,  383. 

which  ship  shall  give  way  to  prevent  collision,  383. 

of  steam-ship's  duty  to  give  way,  384,  and  n.  (1.) 

duty  of  hanging  out  lights,  384. 

liability  of  owner  extends  not  beyond  ship  and  freight,  385, 
Of  the  seamen,  385-398. 

seamen  and  mates  equally  protected,  385. 

rights  and  duties  defined  and  protected  by  statute,  385. 

1.  Shipping  articles,  386-388. 

contents  of,  and  by  whom  signed,  38G. 

how  interpreted  and  when  enforced,  386,  387,  and  notes. 

oppressive  stipulations  how  treated,  387.  . 

distinction  between  admiralty  and  common-law  courts  in  construing 

these  articles,  387. 
when  conclusive  as  to  wages,  388. 

2.  Oficages,  388,  389. 

right  of,  to  demand  how  much  in  a  foreign  port,  388. 
of  lien  of,  on  a  ship  and  freight  for  wages,  388,  and  n.  (4,)  373,  n.  (1.) 
•when  lien  attaches  on  money  jiaid  for  a  wrongful  seizure,  388,  n.  (4.) 
when  seamen  must  assist  in  unloading,  388,  n.  (4.) 
when  may  file  libel  for  wages,  388,  n.  (4.) 
what  destroys  claim  for  wages,  389,  n.  (4.) 

lien  for,  when  freight  might  have  been  earned  though  not,  389,  n.  (1.) 
lien  for  what  wages  when  voyage  is  divisable,  389,  n.  (1.) 
it  matters  not  whether  vessel  goes  empty  or  not,  389,  n.  (1.) 
whether  c&pture  itself  does  not  dissolve  contract  of  wages,  389,  n.  (1.) 
of  wages  when  they  save  anything  from  wreck,  390,  n.  (2.) 
when  may  become  salvors  of  their  own  vessel,  391,  note, 
of  wages  when  freight  is  paid  in  advance,  391,  n. 
of  English  statute  whereby  wages  paid,  though  no  freight  earned, 
391,  n. 

3.  Of  provisions  and  subsistence,  390,391. 

kind  of,  and  quantity,  391,  n.  (1.) 

when  short  allowance  gives  double  wages,  39(5,  391. 

when  master  may  shorten  allowance  to  prevent  waste,  391. 

4.  When  seaworthiness  may  he  inquired  into,  391,  392. 

when  condition  of  ship  will  excuse  seamen  from  proceeding  on  the 
voyage,  392. 

5.  Of  the  care  of  seamen  in  sichiess,  392,  393. 

statute  requires  ship-owner  to  furnish  a  medicine  chest,  392. 

52 


(314  INDEX. 

SHIPPING,  continued. 

when  a  physician  may  be  procured,  and  at  whose  expense,  392,  n.  (1.) 
when  seaman  contracts  disease  against  master's  command,  392,  n.  (1.) 
marine  hospitals  free  of  charge,  how  suppoi'ted,  393. 
duty  imposed  on  ship-owner  by  law-merchant,  393. 

6.  Qf  master's  duty  to  bring  home  seamen^  393-396. 

must  account  for  their  absence,  394. 

penalty  for  discharging  a  seaman  abroad,  394. 

when  this  statute  does  not  apply,  394. 

in  case  of  repairs  or  capture,  seamen  are  not  at  liberty  to  leave  ship 

until  after  a  reasonable  time,  395. 
when  consuls  may  discharge,  395. 
when  may  claim  extra  wages,  395. 

obligation  of  American  ships  to  bring  home  seamen,  395. 
when  will  seaman's  conduct  warrant  his  discharge,  395,  n.  (3.) 
what  fine  for  discharging  seaman,  396. 
of  compensation  for  loss  of  time,  &c.,  396,  and  n.  (3.) 

7.  Punislanent  of,  liovo  far  alloicable,  396,  and  n.  (4,)  398. 

flogging  on  whale  ships  also  prohibited,  396,  n.  (4.) 
meaning  of  desertion,  396,  and  n.  (1.) 
forfeiture  of  wages,  how  waived,  397. 
forfeits  what  by  desertion  before  voyage  begins,  397. 
may  be  apprehended  by  warrant,  39  7. 
consequences  of  desertion  on  voyage,  397. 
what  and  how  long  absence  makes  the  deserter  liable,  397. 
Of  pilots,  398-400. 

States  make  their  pilotage  laws,  398. 
pilots  must  be  duly  appointed,  398. 

what  vessels  a  pilot  can  assist,  determined  by  commission,  398. 
when  pilotage  must  be  paid,  whether  service  accepted  or  not,  399. 
of  pilot's  authority,  when  begins,  when  may  be  dispossessed,  399. 
not  taking  pilots  makes  ship-owners  liable  to  shippers  for  damages,  399. 
of  ship-owner's  and  pilot's  liability  when  latter  is  negligent,  400. 
Of  material-men,  400-402. 
definition  of,  400. 

lien  of,  and  of  all  Avorking  about  the  ship,  400. 
only  have  a  lien  on  foreign  ships  by  admiralty  law,  400,  and  n.  (4.) 
have  a  lien  on  domestic  ships  in  some  ports  by  statute,  400. 
whether  lien  extends  to  reconstruction,  401,  and  n.  (2.) 
when  a  laborer,  employed  generally,  has  no  lien,  402. 
statute  liens  take  precedence,  402. 
in  what  courts  liens  may  be  enforced,  402,  and  n.  (2.) 
SHIPPING  ARTICLES,  386-388. 

(See  Skamex.)  ' 

SICKNESS, 

(See  Seamen.) 


INDEX.  615 

SLAVES, 

of  the  carriage  of,  219. 
SPECIAL  AGREEMENT, 

(See  Carriage  op  Goods.) 
SPECIALITIES, 

(See  Consideration.) 
STATUTE  OF  FRAUDS, 

0/  its  purpose  and  general  provisions,  71,  72. 
0/  the  promise  to  pay  the  debt  of  another,  72-74. 
promise  must  be  collateral,  72. 
how  to  determine  whether  a  promise  is  original  or  collateral,  73,  and 

n.(l-) 
original  promises  not  within  the  statute,  73. 
collateral  promises  not  always  within  the  statute,  74. 
how  to  distinguish  between  those  collateral  promises  which  are  and  those 

T/hich  are  not,  74. 
when  an  oral  promise  to  pay  the  debt  of  another  and  to  do  something 
else,  can  be  partially  enforced,  74. 
Of  an  agreement  not  to  be  performed  within  a  year,  74,  75. 
contracts  capable  of  complete  execution  within  a  year,  are  not  within 
the  statute,  75,  and  n.  (1.) 
Of  the  acceptance  of  a  thing  sold,  75,  76. 
what  will  amount  to  a  delivery  and  acceptance, '50,  62,  76. 
a  conditional  acceptance  does  not  take  the  case  out  of  the  statute,  54,  76- 
effect  of  giving  earnest  or  part-payment,  76. 
Of  the  form  and  subject-matter  of  the  agreement,  7  7-79. 
agreement  must  be  In  writing,  77. 

need  not  express  the  consideration,  77. 
may  be  on  several  pieces  of  paper,  77. 
signature  may  be  on  any  part  of  the  paper,  77.  ,        ' 

may  be  required  by  statute  to  be  placed  at  the  bottom  of  the 

paper,  77,  n.  (4.) 
may  be  only  printed  in  the  agreement,  7  7. 
what  stocks  are  "  goods  and  wares,"  &c.,  within  the  statute,  77. 
an  executory  contract  for  sale  is  within  the  statute,  78. 
distinction  between  a  contract  for  sale  and  an  agreement  to  pay  for 

labor,  78,  and  n.  (3.) 
this  part  of  the  statute  does  not  avoid  contracts,  but  only  renders  them 

unactionable,  78,  and  n.  (4.) 
the  limitation  of  the  statute,  79. 
STATUTE  OF  LIMITATIONS, 

(See  Limitations.) 
STEAMBOAT-OWNERS, 

liability  of,  202. 
STOCKS, 

are  "goods,  Avarcs,  and  merchandise,"  when,  77. 
partnership  property  Is,  when,  170. 
when  borrowing  of,  Is  usurious,  260. 


616  INDEX. 

STOPPAGE  IN  TRANSITU, 

definition  of,  60. 

betweefli  whom  this  right  exists,  60. 

right  of,  only  exists  upon  actual  insolvency,  60. 

made  by  whom,  61. 

what  notice  to  party  in  possession  will  be  sufficient,  61,  and  n.  (3.) 

goods  can  only  be  stopped  while  in  transitu,  61. 

when  transitu  ends,  or  possession  of  buyer  begins,  61,  and  n.  (4.) 

not  by  entry  in  custom-house,  without  payment  of  duties,  62. 
by  a  symbolical  or  constructive  delivery  of  the  goods  to  buyer, 

62. 
by  discharging  the  lien  of  the  carrier,  62. 
how,  when  the  buyer  hires  or  owns  the  carrying  ship,  62,  and 
n-(7.) 
when  right  of,  destroyed  by  an  indorsement  and  delivery  of  bill  of 

lading,  63. 
right  of,  is  a  lien  of  the  seller,  and  not  a  right  to  rescind  the  sale,  63. 
consequences  of  this  distinction,  63. 

when  the  buyer,  apprehending  bankruptcy,  may  return  the  goods,  64. 
when  this  right  of,  may  be  abridged,  64. 
STRANDING, 

(Sec  General  Average.) 
STRANGER, 

(See  Coksideratiox.) 
SUB-FREIGHTERS,  360. 

(See  SniPPixG.) 
SUBROGATION, 

of  surety,  38,  39,  294. 
of  insurers,  413,  n.  (5,)  443,  535. 
SURETY,      • 

(See  Guaranty.) 


TENDER, 

TERMINI, 

of  voyage, 

THEFT, 
TIME, 


T. 

(See  Payment.) 

(See  ]Marine  Insurance.) 

(See  Marine  Insurance.) 

(See  Agrekment.) 


TRANSFER, 

of  bills  and  notes, 

(See  Negotiable  Paper.)' 
of  ships,  325-333, 

(See  Shipping.) 


INDEX. 


617 


USURY, 


U. 


(See  Interest  anp  Usury.) 


VALUATION, 


(See  Insurance.) 


WAGES, 


W. 

(See  Seamen.) 


WAIVER, 

of  special  provisions  of  partnership,  16G. 
by  insurers,  469,  493. 
of  notice  and  proof  of  loss,  536. 
WARRANTY, 

(See  Sales.  Insurance.) 


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